LOS ANGELES--(BUSINESS WIRE)--The Apartment Association of Greater Los Angeles (AAGLA) announced today that it has filed a lawsuit against the City of Los Angeles (“City”) seeking to nullify and enjoin the City from enforcing an ordinance prohibiting rental housing providers from increasing rent (“Rent Freeze Ordinance”) as violative of the United States and California Constitutions on the grounds that it deprives the Association’s members of due process by effectively denying property owners from implementing annual rent increases mandated by the Rent Stabilization Ordinance. The lawsuit, which was filed in the Superior Court of the State of California, seeks to overturn the City’s Ordinance No. 186607, which is codified in Los Angeles Municipal Code § 151.32.
Cheryl Turner, President of the AAGLA Board of Directors and a Los Angeles based attorney stated: “This ordinance, which has frozen all rent increases for more than three years under a period of extreme inflationary pressures, has been a tremendous financial strain on the City’s rental housing providers. As a result, many housing providers in Los Angeles have been forced to exit the rental business, liquidate retirement savings to keep up with rapidly rising costs, or in extreme instances, are facing foreclosure proceedings.” Ms. Turner further added, “No other type of business or entity, not food suppliers, medical professionals, nor the government itself, have been burdened by what will ultimately be a four-year mandated ‘freeze’ on income from which housing providers will never be able to make-up.”
The City’s Rent Freeze Ordinance prohibits residential rental property owners from increasing rent on properties subject to the City’s Rent Stabilization Ordinance (“RSO”) for a period of one-year following the end of the declared “Local Emergency,” thus preventing property owners from implementing even modest increases ordinarily permitted under rental agreements and the City’s RSO. The City declared an end to the local emergency as of February 1, 2023 and, accordingly, the Rent Freeze Ordinance will continue until February 1, 2024, or approximately four years after the City’s local emergency declaration during March 2020.
AAGLA’s Executive Director, Daniel Yukelson, stated: “For more than three years, rental housing providers have been saddled with cost increases impacting virtually every line item of their profit and loss statement. Supply chain issues and labor shortages have caused the costs for all types of goods and services to increase and in many cases, costs have increased far more than the inflation rate. Insurance costs have skyrocketed due to the California fires and the loss of major insurers that have now stopped doing business here. All of this comes after three years of lacking rent collections due to the City’s imposed eviction moratorium.” Yukelson further added, “Even the City, the government entity which imposed the rent freeze, has ‘piled onto’ the financial strain of landlords by more than doubling fees associated with its systematic code enforcement inspection program, and imposing double digit increases for water and electric utilities, and waste hauling.”
Earlier this year, during March 2023, AAGLA filed a lawsuit against the City of Los Angeles seeking a writ of mandate and declaratory and injunctive relief to prohibit the City’s enforcement of two, recently passed, so-called renter protection ordinances. During December 2022, AAGLA and the Howard Jarvis Taxpayer Association filed a joint lawsuit against the City of Los Angeles seeking to overturn Measure ULA, a documentary transfer tax of 4% on real estate sales or transfers of more than $5 million, and 5.5% on real estate transactions valued above $10 million, which took effect on April 1, 2023. Both these latest cases are still pending.
During March 2022, AAGLA and the Apartment Owners Association of California (AOA) filed a joint lawsuit against Los Angeles County seeking, among other relief, an Injunction against the enforcement of the County of Los Angeles’s residential eviction moratorium in which matter a preliminary injunction was granted. During 2020, AAGLA had also filed a lawsuit against the City of Los Angeles on behalf of its members and the City’s housing providers making a constitutional challenge to the City’s moratoriums on evictions and on rent increases.
Founded in 1917, the Apartment Association of Greater Los Angeles seeks to promote the highest levels of professionalism within the multifamily rental housing industry. It provides a wide array of services and benefits that meet the needs of rental housing providers of all sizes, including educational seminars and member events, expert operational advice, and an extensive library of forms needed to successfully own and manage rental properties. The Association also serves as a powerful advocate and lobbyist for rental housing providers at the local, county, state, and federal levels of government. For more information, go to: www.aagla.org/legalfund.