Apartment Ass'n of Los Angeles County, Inc. v. City of Los Angeles (173 Cal. App. 4th 13, 2009)

Opinion

KITCHING, J.

INTRODUCTION

Plaintiff and appellant Apartment Association of Los Angeles County, Inc., challenges the lawfulness of an ordinance enacted by defendant and respondent City of Los Angeles (City). The ordinance provides that if a landlord demolishes residential property subject to City’s rent control law, and builds new residential rental units on the same property within five years, the newly constructed units are also subject to the rent control law. The trial court sustained City’s demurrer to plaintiff’s complaint for declaratory relief without leave to amend and entered judgment in favor of City. Plaintiff appeals from the judgment.

This case requires us to interpret two statutory schemes. The first is the Ellis Act, Government Code section 7060 et seq. The Ellis Act permits owners of property subject to rent control to evict their tenants and go out of business if they comply with certain procedural requirements. It also includes recontrol provisions designed to thwart efforts by landlords to circumvent rent control by evicting tenants under the false pretense that they intend to go out of the rental business, and then re-leasing their property at market rental rates. One such provision, section 7060.2, subdivision (d), specifically authorizes City to enact the ordinance at issue in this case.

The second statutory scheme is the Costa-Hawkins Rental Housing Act, Civil Code section 1954.50 et seq. (Costa-Hawkins), which was enacted after the Ellis Act. A provision of Costa-Hawkins, Civil Code section 1954.52, subdivision (a), generally exempts newly constructed residential units from rent control. Specifically, it provides: “(a) Notwithstanding any other provision of law, an owner of residential real property may establish the initial and all subsequent rental rates for a dwelling or a unit about which any of the following is true: [