LA will allow landlords to rent out unpermitted apartments—if they also provide affordable housing

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The Los Angeles City Council unanimously approved new rules on Wednesday that will allow landlords to rent out unpermitted apartments.

The new ordinance is key to “protecting low- and moderate-income Angelenos doing their best to get by, living in unapproved units [through] no fault of their own,” said Councilmember Jose Huizar.

Every year, Huizar said, city inspectors remove from the rental market 400 to 500 units never approved for occupancy (think, for example, of converted rec rooms or haphazardly partitioned micro apartments).

The new rules comes with strings attached. Landlords will be able to apply for permits for such units only if they agree to rent an equal number of units in the building at affordable prices for the next 55 years. Unpermitted units would also have to be brought into compliance with city safety codes.

The question is whether building owners will take advantage of the new rules. Critics of the ordinance argue that some landlords may be skittish about agreeing to the affordable housing stipulation, preferring instead to simply boot tenants from unpermitted units.

“No one is going to apply,” Apartment Association of Greater Los Angeles Boardmember Harold Greenberg told the Los Angeles Times last year.

Rick Coca, a spokesperson for Councilmember Huizar, tells Curbed that, at the very least, the city is giving landlords an option they haven’t had in the past. “Before, the tenant would just have to move out and nobody wins,” he says.

The new rules also only apply to dwellings that existed prior to December 10, 2015, with the burden on landlords to prove that the unpermitted unit was occupied prior to that date.

The cutoff is supposed to ensure that opportunistic landlords won’t establish new illegal units for the express purpose of taking advantage of the ordinance. But it also eliminates opportunities for creative additions to the city’s housing stock.

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