City Council

(4)\n23-0840\nHOUSING AND HOMELESSNESS COMMITTEE REPORT relative to\nestablishing a process to assess and report on trends related to the\nconcentration of ownership and corporatization of the City’s housing\nstock that may negatively impact renters, limit small landlord\nownership opportunities, and limit first-time homebuyer opportunities.\nRecommendation for Council action:\nINSTRUCT the Los Angeles Housing Department (LAHD) to establish\nan ongoing process to assess and regularly report to Council on\ntrends related to size of ownership inventories, ownership\norganizational entity structures, and owner business models or\nbehaviors that may negatively impact renters, limit small landlord\nownership opportunities, and limit first-time homebuyer opportunities;\nand, INSTRUCT the LAHD to report to Council on the following\noptions contained in the LAHD report dated October 3, 2025,\nattached to Council file No. 23-0840, to expand the foundational\nanalysis of the report:\na. OPTION 1 - Explore the Potential Link between Rapid\nOwnership Growth, Owner Behavior, and Renter Displacement\nRisk: Identify the number of owners with rapidly increasing\ninventories beyond the largest included in this report and\nanalyze the extent to which their administrative records\ndemonstrate an increased risk of renter displacement under\ntheir ownership. LAHD data to be examined include, but are not\nlimited to Rent Stabilization Ordinance (RSO) complaints,\nTenant Anti-Harassment Ordinance (TAHO) complaints, code\ncomplaints, eviction filings, and tenant buy-out agreements.\nb. OPTION 2 - Property Flipping: Identify the number of actors in\nthe City whose primary business model is property flipping.\nExamine the most common renovations associated with\nflipping, how soon after purchase do the new owners typically\nflip the property, how much the flipped sales price increases\nover the acquisition price, whether existing tenants are likely to\nbe permanently displaced by renovations, and in which\nneighborhoods are most impacted by property flipping. Data to\nbe examined include First American sales data and Los Angeles\nDepartment of Building and Safety (LADBS) permit data.\nc. OPTION 3 - Acquisition of Properties from Distressed Small\nLandlords and Homeowners: Analyze the extent to which\ndistressed small landlords and homeowners who fall behind on\ntheir mortgage payments lose their properties to larger actors\nacquiring via short-sales or foreclosure. Data to be analyzed\ninclude but are not limited to the City’s Foreclosure Registry\nProgram, and First American sales and foreclosure data.\nd. OPTION 4 - Use of Organizational Entities by Small Landlords:\nTo better understand the extent to which organizational entity\nownership is associated with portfolio size, analyze the extent to\nwhich small landlords create organizational entities, such as\nlimited liability companies (LLCs) and trusts to hold their\nproperties (typically done via Quitclaim Deed transfers). Data to\nbe examined includes First American’s non-sale transfer data.\ne. OPTION 5 - Better Distinguish a Small Landlord from a “Large”\nLandlord: Before determining whether an owner is a “small”\nowner, expand the assessment of the size of a property owner’s\ninventory to include all of Los Angeles County, not just the City.\nA countywide understanding of an owner’s portfolio size will\ngive the City a better understanding of ownership size and how\nthey are changing. The distribution of housing ownership can\nthen be analyzed to identify the percentages of ownership at\ndifferent threshold levels, for example, how many landlords own\n10 or fewer units, 5 or fewer units, 2 or fewer units. Data to be\nexamined includes Rent Stabilization Ordinance (RSO) and\nJust Cause Ordinance (JCO) Registration Data, and Los\nAngeles County Assessor Data.\nFiscal Impact Statement: The LAHD reports that there is no impact to\nthe General Fund.