LA Landlords File Constitutional Challenge to Rent Freeze

Los Angeles landlords have lobbed a lawsuit against Los Angeles to contest the city’s pandemic-era regulations on apartment rents.

The Apartment Association of Greater Los Angeles has filed a constitutional challenge to a city ordinance that freezes rents and bars rate increases for 624,000 rent-controlled apartments, the Commercial Observer reported.

The landlord group argues the rent freeze passed in March 2020 violates the U.S. and California constitutions, as annual increases are mandated by the city’s Rent Stabilization Ordinance, and deprives property owners of due process.

Los Angeles ended its local COVID-19 state of emergency on Feb. 1, but allowed the rent freeze to continue until Feb. 1 of next year.

The extension means the rent freeze would last nearly four years. As a result, landlords have been under tremendous financial strain, with rents frozen for 75 percent of the city’s apartments during a period of rising inflation.

“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.” Cheryl Turner, president of the AAGLA board of directors and a Los Angeles-based attorney, said in a statement.

Daniel Yukelson, president of the apartment association, said the cost of some goods and services are rising faster than the rate of inflation.

“Insurance costs have skyrocketed due to the California fires and the loss of major insurers that have now stopped doing business here,” Yukelson said. “All of this comes after three years of lacking rent collections due to the city’s imposed eviction moratorium.”

The City Attorney’s Office said it doesn’t comment on pending litigation, which includes a number of lawsuits from the landlord group.

In March, AAGLA sued the city seeking to prohibit its enforcement of two recently passed renter protection ordinances over evictions and rent payments.

In December, AAGLA and the Howard Jarvis Taxpayer Association filed a joint lawsuit against the city to overturn Measure ULA, which added a transfer tax of 4 percent on real estate sales or transfers of more than $5 million, and 5.5 percent on transactions valued above $10 million.

Both of these cases are pending.

In March of last year, AAGLA and the Apartment Owners Association of California filed a joint lawsuit against Los Angeles County that stopped the enforcement of its residential eviction moratorium.

— Dana Bartholomew