Court Rules in Support of Los Angeles Rent Ordinance

Tuesday, September 9, 2003 - 1:45AM

The 9th District U.S. Court of Appeals ruled yesterday in support of the City of Los Angeles’ Rent Stabilization Ordinance (LARSO) covering housing developments subsidized by the U.S. Department of Housing and Urban Development (HUD) whose owners have prepaid their HUD subsidized mortgage or opted out of their Section 8 contract. In the case (TOPA Equities, Ltd. v. City of Los Angeles, No. 02-56034; No. CV 00-10455-GHK, RNBx, C.D. California. April 8, 2002), TOPA Equities Ltd. purchased an apartment property, Morton Gardens, and prepaid the HUD Section 236 mortgage. As a result of the mortgage payoff, HUD no longer required TOPA to maintain the Section 236 program’s below-market rents. The City of Los Angeles, however, used its rent stabilization law to prevent the owner from raising the rents. TOPA filed suit against the city arguing that the Low Income Housing Preservation and Resident Homeownership Act (LIPPRHA) preempted it from the rent control law. However, in its decision yesterday, the court concluded that “LARSO is a generally applicable municipal rent control ordinance that safeguards tenants from excessive rent increases. It treats properties exiting federal housing programs neither better nor worse than properties that were never part of such programs. The 1990 LARSO amendments are not expressly preempted by LIHPRHA, nor are they preempted on conflict grounds.” Click here for a copy of the ruling.

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