The Beverly Hills City Council agrees that the goal of rent control is to allow residents to stay housed in Beverly Hills, but how to ensure this happens while also allowing landlords to remodel their properties is not so clear. At its Feb. 7 regular meeting, the Council considered changing a provision in its Rent Stabilization Ordinance (RSO) regarding evictions for building demolition or condo conversions in an effort to protect tenants. Ultimately, it decided not to do so due to confusion over the impacts of such a change.
In the meeting Council also decided to lift the city’s COVID emergency orders, while upholding the May 31 deadline for tenants to pay back rent accrued during the eviction moratorium and the 3.1% maximum allowable rent increase until June 30. And, as part of the winding down of COVID era rules, the city will soon resume enforcement of non-compliant signage in front of businesses and phase out curbside pick-up spaces.
The vast majority of the evening, however, focused on potentially altering the city’s RSO discussion prompted in part by complaints from tenants facing eviction in a rent control building slated for demolition and remodeling.
Currently, the landlord who owns three rent controlled buildings with 13 units on 149-159 South Maple Drive is planning on demolishing these properties and building a new six story luxury development with 29 units, including six affordable units. This project was approved by the Planning Commission in October 2022.
“I’ve raised children here, worked for the school district and after 50 plus years my commitment to this community is self-evident,” said longtime renter Linda Schneider in written public comment. “However, as I face almost certainly eviction, I am compelled to make you aware that there is a problem in the city.”
The landlord is able to evict rent controlled tenants on South Maple Drive under a provision in the city’s Rent Stabilization Ordinance that permits evictions when owners demolish their building or convert it into condos. Councilmember John Mirisch requested that Council consider eliminating this provision from its RSO.
“I don’t want anyone who feels Beverly Hills is their home to feel because they are evicted for redevelopment–something that in theory is supposed to provide us with more housing–that they’re going to lose their home and they’re going to be forced to leave the community,” said Mirisch in the Feb. 7 meeting.
However, after three hours of public comment and discussion, Councilmembers remained uncertain as whether such a policy change would increase or decrease the city’s rental housing stock.
Council then suggested that both staff and the Rent Stabilization Commission take a deeper look at the potential policy change as well as ways to help rent control tenants who are facing to find new units in the city.
“I definitely want to encourage more people to stay in the rental market in our city, and I think those who are tenants want that as well, so I don’t want to put a barrier to that,” said Mayor Lili Bosse, referring to potential negative outcomes of eliminating the provision. “And I really want to be clear about that and that’s still not clear.”
A great deal of the confusion stems from the fact that both the state rent control law, known as the Ellis Act, and the city’s RSO Ordinance apply to Beverly Hills. Each policy has different rules around evicting tenants for building demolitions or conversions.
If a landlord pursues evictions under the demolition/conversion provision of the city’s RSO, they must give residents 90 days’ notice and then demolish the property or convert it into condos.
If landlords pursue evictions under the Ellis Act, they provide tenants with 120 days of notice and one year of notice for senior or disabled tenants. They must then exit the rental business entirely, either by demolishing their building, converting it into condos or using it for a new purpose such as commercial leasing. And, if the landlord returns the building to the rental market there are certain penalties.
If the building returns to the rental market within five years, all previous tenants have the right to return at their previous rental rate adjusted for inflation. If the building returns to the rental market within 10 years, tenants have a right to return at market rate.
Given these penalties, it would seem that the Ellis Act provides stricter tenant protections and that eliminating the city’s demolition/conversion provision would help tenants.
However, the picture is not so simple, particularly in an instance where an aging building may require demolition.
“Some of our older apartments are charming, but a hundred years old is kind of pushing it and at some point, they have to be upgraded, perhaps they have to be torn down,” said Vice Mayor Julian Gold. “I think we have to be mindful of that.”
For reference, the three buildings being demolished for the new South Maple Drive development date back to the 1920/1930s, according to a Oct. 27, 2022 staff report.
In a scenario where renovations necessitate demolition, the penalties associated with Ellis Act evictions may discourage landlords from returning their property to the rental market.
However, under the city’s demolition provisions, a landlord can demolish and remodel a property and then return it to the rental market with no penalties.
“I would not be in favor of removing that section of our code,” said Gold. “It seems to me, that in the absence of more information, it does offer some protection about our ability to create new apartments when we tear down buildings.”
In addition to continuing to analyze how both policies may impact housing stock, Council expressed a desire to make them align closer.
“The demolition conversion provisions not syncing up with the Ellis Act makes no sense,” said Mirisch, who suggested increasing the required days of notice in the city’s provision to match the 120 days/one year required by the Ellis Act.
Council also wants to look at ways it can help rent control tenants facing eviction such as connection to free legal representation and assistance finding available units in the city.
“Our goal is to keep people here in our community and if people are going to be displaced from their homes, we want them to stay in our city,” said Bosse. “I really believe that we as a city can do a better job.”