How much rental housing has been Ellis-ed?
California’s Ellis Act allows a landlord to leave the rental business and evict existing tenants in 120 days. West Hollywood tenants who are seniors (62+) or disabled get a full year.
The landlord also has to pay the tenants a relocation fee set by the City. The fee ranges from $6,180 for a typical tenant in a studio apartment to $20,600 for a low-income household. Later in this report, we look at what it might cost them to rent a replacement apartment in West Hollywood.
According to a recent report to the City Council, 764 rent-stabilized units have been “Ellis-ed” — removed from the rental market — since 1986. That’s 5% of rent-stabilized units. This is the key table taken directly from the City report:
What happened to the Ellis-ed units
The City broke the numbers down by subsequent use. About 37% of the units (and half of the properties/buildings) have stayed off the market. Either the owner occupied an existing unit or they combined two or more units into one single-family residence.
Another 37% of the Ellis-ed units were on properties where new construction has been planned and/or completed. We assume most of those units were demolished and replaced by new market-rate apartments or condominiums.
About 16% of the units were converted to a new use, such as a bed and breakfast or non-profit affordable housing. The remaining 10% of the Ellis-ed units were returned to the rental market.
Illustration of what happened to the Ellis-ed units
The chart below is an illustration of what happened to the Ellis-ed units, based on the City’s numbers and a series of assumptions. We start with the rent-stabilized units that were Ellis-ed on the left. Some were replaced by a larger number of newly constructed units. Most of the new units were probably market-rate, but some were inclusionary affordable-housing, set aside for low-income households.
Another set of units shifted from rentals to owner-occupied. Some units were combined into single-family residences in the process.
Among the units with a change of use, some became non-profit affordable-housing. Others stopped being housing altogether. A small group of units were returned to the rent-stabilized housing market.
The illustration shows that rent-stabilized units were lost, converted into or replaced by a larger total number of owner-occupied, market-rate, and low-income affordable-housing units.
Replacement rent for Ellis-ed tenants
For most Ellis-ed tenants, the biggest cost is probably not the move but the increased monthly rent of a replacement apartment. Depending on how long they’ve lived in their rent-stabilized unit, their current rent may be significantly below market. Even if they find another rent-stabilized apartment in West Hollywood, the move-in rent will be at the higher market rate.
Our replacement rent calculator gives a sense of how much more it may cost an Ellis-ed tenant to rent another apartment in West Hollywood.
The chart below summarizes the calculator’s results for replacing a two-bedroom unit. In general, the longer the tenant has lived there, the bigger the rent differential. A tenant who moved in before 1996 could be facing an 80% increase in their housing costs.