Tenants at the rent-controlled Beverly Grove apartments in Los Angeles are angry at their landlord, Matthew Jacobs, for evicting them to make way for a luxury residential development project. It is made all the more galling by who their landlord is.
Jacobs, a developer, is also board chairman at the California Housing Finance Agency (CalHFA), which provides financial assistance for poor and working-class first-time home buyers and participates in the rental market through loans to developers building multifamily housing. He was appointed to the board of directors by Governor Jerry Brown in 2012 and made chairman the next year.
“The head of a government agency tasked with keeping Californians affordably housed is doing mass evictions for profit,” Dean Preston, executive director of Tenants Together, said in a release (pdf) this week calling for Brown to remove Jacobs.
One of the soon-to-be-evicted tenants, Steven Luftman, told the Los Angeles Times that 60 people picketed Jacobs’ home last week. Jacobs has been a principal in BLDG Partners LLC since 2005.
Jacobs is using the controversial 1986 Ellis Act to kick out 17 tenants from four rent-regulated building, according to CityWatch, in a move that has become standard operating procedure for apartment-building flippers and developers. The Act was originally intended as a way to allow landlords to exit the rental business without undue hardship by making it easier to evict tenants.
But a study (pdf) by Tenants Together found that 60% of San Francisco Ellis evictions in 2013 were by landlords who had held their property for less than one year and 79% were by owners who had made their purchase within the last five years. Cumulative data gathered from 2009-13 was similar.
San Francisco, with its tech-driven real estate price explosion, has been in the eye of the storm over a big jump in Ellis evictions. But Los Angeles has its share. KPCC cited figures from the Los Angeles Housing and Community Investment Department that Ellis evictions increased 238% in 2014, to 725 from 308 the year before. The department recorded nearly 19,000 Ellis evictions between 2001 and 2014, with evictions rising every year since the height of the Great Recession in 2009.
The city has 638,000 partially-rent-controlled apartments that are coming under assault from multiple directions. In addition to Ellis rising evictions, the popularity of Airbnb is pulling additional rental units off the market as owners abandon longer-term leases for profitable short-term rentals that undercut the hotel industry.
Attempts to amend the Ellis Act specifically to protect only San Francisco tenants have repeatedly fallen short, most recently in April when legislation introduced by Mark Leno, D-San Francisco, failed to pass its first committee hurdle in the Senate. Leno said he wouldn’t bother trying again this year. The bill had already been watered down in response to realtor opposition, but met the same fate as last year’s Senate Bill 1439.
Leno wanted to require landlords to own their buildings for five years before using the Ellis Act to evict someone.