LA apartment owners on split court decision over relocation, evictions: Still not enough to justify investment
A California Appellate Court partially ruled in favor of the Apartment Association of Greater Los Angeles in its lawsuit against the City of Los Angeles, easing some financial burden on local multifamily property owners. However, the industry still faces significant challenges due to the city's regulatory environment.
The Apartment Association of Greater Los Angeles (AAGLA) partially won its lawsuit against the City of Los Angeles, challenging two ordinances enacted in March 2023: the Relocation Assistance Ordinance and the Eviction Threshold Ordinance. The California Appellate Court agreed with AAGLA that the relocation ordinance violated state law, but upheld the threshold ordinance. The relocation ordinance required landlords to provide relocation support for tenants displaced by lawful rent increases. AAGLA's CEO, Daniel Yukelson, said the partial win will give operators flexibility to create pricing that meets their ongoing operating costs. However, Yukelson emphasized that broader challenges caused by the city's regulatory environment remain, with many mom-and-pop landlords exiting the business due to increased regulations and risk. David Saghian, first vice president at multifamily investment brokerage Lyon Stahl, noted frustration among multifamily operators and investors due to the L.A. investment environment, citing the additional layer of regulations and unpredictability.
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