LA Ordinance Adds Tenant Relocation Fee

February 10, 2023

Council members Nithya Raman and John Lee
Council members Nithya Raman and John Lee (Getty, Bernie Sanders, LA City Council)

A progressive bloc in the Los Angeles City Council is claiming a win with the 15-set body set to make landlords who want to hike rents by more than 10 percent pay relocation fees, but a look at the numbers raises the question of how big of a win for tenants.

The council’s proposal is expected to take effect next month with a signature by Mayor Karen Bass. It mandates that the relocation fee law will kick in only if landlords either raise the rent by 10 percent or more, or by 5 percentage points over the rate of inflation, whichever threshold is lower.

The standard will apply to a small percentage of the city’s apartments, because under different laws most apartments within the city limits are excluded from large rent increases anyway.
City officials have said the new ordinance will apply to 84,000 units in apartments that were built after 2008.

But where it does apply, landlords will have to pay tenants who move out three times the city-determined fair market monthly rate, plus a moving costs fee of around $1,400.

The city’s current fair market rate is $1,747 for a one-bedroom apartment and $2,222 for a two- bedroom apartment. So a landlord subject to the new law would have to pay a total of around $6,700 to a tenant who moves out of a one-bedroom apartment and around $8,100 to tenants who move out of a two-bedroom.

A landlord looking to hike rents by 20 percent at those rates would face a payback period of about 18 months on the relocation fees.

The relocation fee rules were written poorly, said Dan Yukelson, executive director for landlord group Apartment Association of Greater Los Angeles.

Yukelson knocked the new rule as being one-size fits all.

“There’s no differentiating between renters who are wealthy and renters who are low income in any of these rules,” he said. “

He also characterized the relocation fees as prohibitive.–Andrew Asch contributed to this report

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