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CES In The News
Los Angeles Daily Journal
Wednesday January 17, 2007
Trial Will Start on Plans for Venice Complex
By Max Follmer
Daily Journal Staff Writer

This Image Did Not Appear in the Original Version of this Article
A long-running fight over plans to redevelop a 52-building apartment complex in Venice enters a new phase today when a Malibu jury will be asked to determine whether the nation's largest rental-property owner acted in good faith when it invoked the Ellis Act to evict 13 households from the Lincoln Place apartments.

In December, Los Angeles County Superior Court Judge Patricia Collins ruled that the last remaining tenants at Lincoln Place - many of whom are elderly or disabled - were entitled to a jury trial in challenging their evictions.

"The question is, What is their intent? Are they invoking the Ellis Act in good faith, or is it a pretext for motives that violate the [Rent Stabilization Ordinance]?" said Amanda Seward, an attorney representing the group of tenants.

The Ellis Act allows landlords in California to take rental properties off the market if they say they are leaving the rental business.

The trial comes at a time when advocates say the Los Angeles area is hemorrhaging affordable housing. Los Angeles has a 2.7 percent vacancy rate, compared with 9.9 percent nationwide. Advocates say landlords are desperate to covert their apartments to pricey condos or to raise rents, especially in desirable beachside communities.

In nearby West Hollywood, a city born of the battles over rent control, supporters of affordable housing have fielded a slate of anti-development candidates to run in the upcoming municipal elections. They estimate that at least 203 units have been "Ellised," or removed from the rental market, since 2000 in the tiny, 2-square-mile city.

The law does not permit landlords to take individual apartments off the market, evict tenants in order to increase the sale price of a building, evict tenants in order to re-rent the units at a higher price or interfere with a city's power to regulate land use.

Supporters of the Lincoln Place tenants allege that Apartment Investment and Management Co., the Denver-based rental giant that owns the property, is using the Ellis Act to circumvent rent-control laws.

"You're talking about the largest apartment company in the country can come in and say, 'We don't like rent control. We want the rent up to market rate, and we want you out,'" Seward said.

She added that the company's use of the Ellis Act was disingenuous because only AIMCO-Venezia, a subsidiary that owns Lincoln Place, says it is getting out of the rental business. The larger company, which owns 65 properties in California, will continue to provide rental housing.

Patti Shwayder, a senior vice president at AIMCO, called the claim that the company is trying to maneuver around rent control "absolute hogwash."

"It's not based in fact at all," Shwayder said. "We are fully in compliance with the Rent Stabilization Ordinance and the Ellis Act, and we worked very hard to make sure that is the case."

AIMCO has spent hundreds of thousands of dollars relocating 600 former Lincoln Place tenants, Shwayder said.

She said she believes this was the only time AIMCO has invoked the Ellis Act to evict residents.

"What you have are 13 tenants who have been fighting redevelopment of this property long before AIMCO-Venezia came along," she said. "They are making a political statement."

Shwayder said the company has yet to finalize its plans for the site, although it had intended to "demolish all the buildings and put up something new."

To date, no proposal has been announced that indicates AIMCO intends to rent the units at a higher price.

Previous newspaper reports have said that the company would like to build luxury condominiums on the site.

Tenants and affordable-housing activists have battled with the company for years over plans to redevelop the complex, which AIMCO-Venezia purchased in 2001.

Previous owners applied for permission to demolish the complex in 1991 and build condominiums, a move that the City Council initially rejected. After appealing to the courts, the owners eventually won.

Since AIMCO-Venezia's acquisition of the property, tenants have met little success in their various legal efforts to thwart redevelopment by the new owners.

An August 2005 historic designation issued by the State Historic Resources Commission was seen by tenants as a way of saving their units. Supporters say the 1950s garden-apartment complex, designed by prominent black architect Ralph Vaughn, has historic value.

However, that designation also is being challenged, and Ken Bernstein of the Los Angeles Conservancy has said that "the dirty little secret of historic preservation is it does not provide ironclad protection."

Residents have resorted to street theater, at one point chanting and picketing outside City Attorney Rocky Delgadillo's Hancock Park neighborhood home on Thanksgiving Day 2005 and erecting a tent city outside the largely shuttered complex that same Christmas.

The city has declined to intervene in the case, saying its hands are tied by the Ellis Act.

Larry Gross, the executive director of the Coalition for Economic Survival
, a nonprofit organization that works to preserve affordable housing in Los Angeles, said that city officials use the Ellis Act as a cover, when nothing in the statute removes Los Angeles' ability to regulate land use.

If city officials were less inclined to approve condo conversion projects throughout Los Angeles, Gross said, then landlords would be less likely to leave the rental market.

"The city has the ability to determine what is built on the property afterwards," Gross said. "If the owner was denied the right to build or the owner was denied their tract map, it would provide a tremendous disincentive to get out of the rental business."

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