Hillel Aron

LOS ANGELES (CN) — A Los Angeles court on Wednesday heard oral arguments in a challenge filed by the Apartment Association of Greater Los Angeles over a pair of ordinances passed by the Los Angeles City Council in February.

One of those laws raised the amount of rent money on which a tenant has to be behind before they can be evicted for non-payment of rent. The other forces landlords to pay a relocation fee to tenants who have decided to move out after a rent increase above a certain level.

In a tentative decision published before the hearing, Judge Mitchell Beckloff indicated that he would likely leave the relocation assistance ordinance in place but rescind the eviction threshold law.

After more than an hour of oral arguments, however, the judge appeared to be wavering and gave no indication as to what he might do.

For years, LA City Council has been under pressure from tenants rights groups and other progressive activists to adopt stronger rent controls and eviction protections. The city and county enacted a strict limit on evictions for non-payment of rent in 2020, as the economy shut down for the Covid pandemic. Those limits were lifted this year.

Perhaps in order to soften the blow to tenants, or maybe to assuage progressive activists, the city council passed a number of regulations to limit evictions and offer rental assistance to Angelenos struggling to get by.

The eviction threshold ordinance, which has received the most attention of the two laws, raises the threshold of unpaid rent the tenant must owe a landlord before being subject to a "just cause" eviction.

Before, that threshold was effectively a dollar. Now, it's one month of the fair-market rate as set by the United States Department of Housing and Urban Development.

This year, that amounts to $1,747 for a one-bedroom apartment, $2,222 for a two-bedroom unit and $2,888 for a three-bedroom. In other words, if a tenant owes $1,500, he or she can't be evicted — even if the monthly rent is less than $1,500.

"The reality of the situation is that people are evicted regularly for amounts that would be small to most of us in this room: $10 or $20," said Ellie Dupler, an attorney with Susman Godfrey LLP who is representing the intervenors in the case, Community Power Collective and Inner City Struggle. "That’s what this statute is changing."

"We haven’t eliminated a default in rent as a reason for eviction," Deputy City Attorney Elaine Zhong added. "We’re just refining what that means."

In their writ, filed in March, the Apartment Association, or AAGLA, argued that the ordinance was in conflict with state law, which says that the landlord may serve three-day notice to pay rent or leave “at any time within one year after the rent becomes due" — no matter how much is actually due.

"It has purpose and effect of pushing that deadline out in the future," said AAGLA lawyer Peter Howell. "I think that’s what the city is trying to accomplish here, pushing that time out, to give people additional time to pay their rent."

The judge jokingly referred to this as Howell's "wolf in sheep’s clothing theory." He spent much of the time questioning Howell about case law and legal theories.

At one point, Howell admitted that some of the relevant case law was inconsistent. Judge Beckloff suggested he was still on the fence about the fate of the ordinance, calling it a close call.

He suggested that he was a bit more decided on the relocation fee ordinance, which he said he was likely to leave in place in his tentative ruling.

In its writ, AAGLA argued that the ordinance was preempted by the Costa Hawkins Act of 1995, which allowed cities to enact rent stabilization laws, effectively limiting the amount a landlord can raise rent every year.

The Act exempted single family homes and "newer construction," which in Los Angeles means buildings built after October 1978. (The dividing line in San Francisco is 1979, and in many other cities it's 1995.) The reason for the exemption was so as not to disincentivize the construction of new housing.

Howell said LA's new relocation fee ordinance would do just that, acting almost as a de facto expansion of rent control into single family homes and newer construction, since the amount of rental assistance landlords would be required to pay — three times the fair market value of the unit plus $1,411, or about $8,000 for a one-bedroom apartment — is so high. The rule would only apply to large rent increases of either 10% or the consumer price index plus 5%, whichever is lower.

"If the ordinance effectively prevents you from raising rent, that’s just as good as a hard cap," said Howell. "The effect is to regulate rent."

Zhong defended the law. "These rent increases can cause self-evictions," she said. "In a housing shortage, tenants will not have option to move."

Dupler added that the actual purpose of the law was not to regulate rent but to "exercise the city’s power to regulate effects of displacement and making sure people don’t end up on the streets."

The judge took the matter under submission but did not issue a ruling on Wednesday.