LA Apartment Association Challenges City’s Rent Freeze

Current regulations have prevented rent increases on three-fourths of the city’s apartments for nearly 4 years

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The Apartment Association of Greater Los Angeles (AAGLA) has filed another lawsuit against the City of Los Angeles over its pandemic-driven regulations on multifamily rents and leases.

The latest court challenge filed in California superior court aims to overturn an ordinance that freezes rent and prohibits rate increases for the approximately 624,000 residential units in L.A. that are subject to the city’s Rent Stabilization Ordinance (RSO). The landlord group argues that the rent freeze, which was instituted in March 2020, violates the United States and California constitutions — as annual increases are mandated in the RSO — and deprives its members of due process.

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After the city ended its local COVID-19 state of emergency on Feb. 1 this year, it let the rent freeze continue until Feb. 1, 2024 — meaning it could be in effect almost four years. 

The L.A. city attorney’s office said it could not comment on pending litigation.

AAGLA said having rent frozen on 75 percent of the city’s rental stock for more than three years during a time of extreme inflation has been a tremendous financial strain on landlords. 

“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. 

Moreover, AAGLA Executive Director Daniel Yukelson 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,” he said. “All of this comes after three years of lacking rent collections due to the city’s imposed eviction moratorium.”

In March, AAGLA filed a lawsuit against the city seeking to prohibit its enforcement of two recently passed renter protection ordinances over evictions and rent payments. During December 2022, 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 latest cases are still pending. 

In March 2022, AAGLA and the Apartment Owners Association of California filed a joint lawsuit against L.A. County that stopped the enforcement of its residential eviction moratorium.

Gregory Cornfield can be reached at gcornfield@commercialobserver.com.