Ellis Act Reform Moves Forward  

Wednesday, April 25, 2018

SACRAMENTO – Today, a measure to protect California tenants by closing loopholes in the Ellis Act passed out of the Assembly Housing & Community Development Committee on a 5-2 vote.  AB 2364, introduced by Assemblymember Richard Bloom (D-Santa Monica) makes several critical changes to the Ellis Act to prevent landlords from evicting tenants and raising the prices on units under the guise of leaving the rental market.

“Every year, thousands of tenants are forced out of their homes by landlords who exploit loopholes in the Ellis Act,” said Assemblymember Bloom. “For many tenants already pushed to the edge of the housing market, the limited restrictions in the Act are the last remaining protection from homelessness.  For the Act to be truly effective, however, we must ensure that its provisions are not abused by scrupulous landlords.”

The Ellis Act gives rental property owners the right to exit the rental housing market, but also places conditions and restrictions on landlords who evict tenants under the Act. These conditions include a requirement to notify tenants 120 days prior to withdrawing a unit, with a longer 1 year notification requirement for tenants who are disabled or older than 62. The Act also restricts when owners can re-enter the market, what price they can re-rent units at when doing so, and requires that all units in a building be removed simultaneously.  As the housing crisis has driven up the market rate for rental units, landlords are increasingly subverting the Ellis Act and using it to evict tenants living in rent control units. These landlords often withdraw individual units from the rental market and return them in a piecemeal manner to avoid the Act’s restrictions and to evade rent control. In the Los Angeles area alone, over 20,000 rent-stabilized units have been removed from the rental market since 2001, with tens of thousands of tenants evicted in the process.

AB 2364 clarifies the Ellis Act by setting one withdrawal date for a property, by requiring the entire property to be deemed back on the market if one unit is returned, and by increasing the length of time for which a property owner can be penalized for re-entering the rental market. The measure also eliminates the cap on punitive damages and clarifies that these changes are only prospective.

“Tenants living in rent-restricted units live with the constant threat of displacement as the cost of housing rapidly rises around them. AB 2364 gives some additional protections to these tenants and ensures that the Ellis Act is not misused.”

AB 2364 is one of five housing bills that Assemblymember Bloom is authoring this year and now heads to the Assembly Appropriations Committee.   

Richard Bloom represents California’s 50th Assembly District, which comprises the communities of Agoura Hills, Bel Air, Beverly Hills, Brentwood, Hollywood, Malibu, Pacific Palisades, Santa Monica, Topanga, West Hollywood, and West Los Angeles.