After years of frustration in their effort to curb Ellis Act abuse, Los Angeles leaders hope to approve restrictions to help close loopholes in what is now considered an outdated law.

The Los Angeles City Council’s Housing Committee on April 5 unanimously approved a recommendation to amend and modify the Rent Stabilization Ordinance (RSO) to strengthen enforcement of the Ellis Act and the preservation of RSO units. The Ellis Act establishes the right for landlords to withdraw existing housing from rent or lease. If they evict tenants using the Ellis Act, they are banned from re-entering them into the market for five years.

But since the economy has shifted, city lawmakers said the Ellis Act has outlived its purpose and is more often used to abuse the system.

Councilman Paul Koretz, 5th District, said the Ellis Act had “an arguable purpose when it was first implemented” when there were stronger rent-controls and some “mom-and-pop” landlords were losing money.

“Now, it’s just a tool for developers to buy properties, assert that they aren’t making money on them, and flip them and turn them into condos after demolishing them,” he said. “Ultimately, there’s no legitimate purpose for it. It’s virtually not used for its original purpose. It’s used exclusively as a way to destroy RSO properties, particularly historic properties, and replace them with high-market rate housing.”

Although it is a state law, the Ellis Act allows local jurisdictions to establish penalties and adopt regulations for withdrawing units, and for returning them to the market. If the ordinance is approved at the April 19 city council meeting, it would instruct department officials to develop a process to require the Housing and Community Investment Department to approve permits for any major construction, alteration, addition, or demolition of properties subject to the RSO. Under the proposal, the five-year period would restart for landlords who prematurely re-rent a unit. The amendments would clarify that the Ellis Act applies to all rental units, whether they are vacant or occupied, and that an owner who demolishes RSO units would be required to restart the Ellis Act process if there is re-rental of units. Owners will also be required to file annual property status reports for withdrawn rental units.

Additionally, owners seeking exemption from the RSO replacement provisions must guarantee units for at least 55 years that are affordable for low or very low income households at or below 80 percent of the area median income, or a number of affordable housing units equal to the number of RSO units withdrawn on a one-for-one basis.

Koretz said he is glad to see the amendments coming after the city recognized the need “to improve the way we handle Ellis cases.”

Committee members and attendees during public comment said they support regulations, but they said problems arise due to lack of enforcement of existing laws, and the proposed ordinance doesn’t go far enough to improve enforcement of Ellis Act abuse.

Steve Luftman was evicted from his home in the Beverly Grove neighborhood nearly two years ago when his landlord used the Ellis Act.

“It’s a crisis,” he said. “I think these reforms are good, but I think more has to be done, especially with enforcement. There are people living in my former unit now, which was supposed to be empty. … How can that be allowed?”

Gianna Martin, a representative for the Los Angeles Tenants Union who is currently fighting an Ellis Act eviction cited examples of units being removed from the market and reentered on short-term rental platforms like Airbnb, or for higher rent prices. She said the only remedy residents have is to file a lawsuit if they can afford it, whereas it’s all the “cost of doing business” for developers and landlords.

“We’re being pushed out of units and they’re demolished and we have no laws to keep them up while they’re being investigated,” she said.

The committee members said they understood the public testimony and agreed with them.

“There are other things we can and should look into that we can do here to figure out how to keep up with enforcement issues,” Koretz said. “We clearly don’t seem to be able to keep up with it.”

Committee Chairman Gil Cedillo said there is an apparent abuse of the Ellis Act and failure to impose consequences, “rather than a problem with a policy structure.”

“It’s a question of lack of compliance and lack of enforcement,” he said. “It just seems to me there’s a need to reconcile a need to build housing abundantly for all classes of people. At the same time, not allow the efforts to build while displacing existing tenants.”

Councilman Marqueece Harris-Dawson, 8th District, said there are no appropriate remedies for wrongfully evicted tenants other than through prosecution.

“This is a crime that we have that is almost never prosecuted in L.A.,” he said. “I think the onus is upon us to figure out what kind of city we want to live in and what kind of laws we’re going to enforce.”

The committee instructed city staff to continue to look at additional enforcement mechanisms, and ways in which the city can strengthen the ordinance, and eliminate any other “loopholes” that result in the loss of RSO units or denial of tenant protections.

Koretz said city officials also need to continue to work with state legislature to alter or repeal the Ellis Act.

“We’re losing a huge percentage of our affordable housing and at some point we’ll have none of it using this process,” he said.

The city council will consider the proposed changes on April 19. For information or to submit comments, call (213)473-9947.