Judge rules against developer and in favor of LA on emergency eviction protections

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A judge has dismissed a federal lawsuit brought by a developer who said its real estate companies should have been compensated for losses they suffered as a result of emergency tenant protections passed in Los Angeles following the outbreak of COVID-19.

In his 15-page ruling, U.S. District Judge Dean Pregerson said the city’s ordinance, which barred landlords from evicting tenants unable to pay rent due to COVID-19, did not constitute a “decrease” of private property as defined by federal law . .

Pregerson said the eviction ordinance, which was approved in 2020 and remains in effect, is for a limited time only and does not involve permanent property seizures, for which the city would have to compensate landlords. The judge also ruled that the law “undeniably promotes the common good”.

“There is little doubt that, without the protection of the moratorium, a significant number of tenants with COVID-related loss of income would have been evicted, leading not only to the typical harms of mass displacement, but also to an exacerbation of the spread of COVID-19. , at everyone’s expense,” Pregerson wrote.

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GHP Management Corp., owned by real estate developer Geoffrey Palmer, filed a lawsuit against the city in August 2021, saying 12 apartment buildings it manages had lost more than $20 million in rental income due to the emergency tenant protections. At the time, GHP and other Palmer-owned companies said they expected their losses to triple by the time the moratorium is lifted.

Palmer is known in LA for developing a number of mock Italian complexes in and around downtown, including the Orsini, Piero, and Medici. Several have been built along highways, most notably around the 101-110 interchange

Lawyers for GHP and the other plaintiffs did not respond to questions from The Times.

In his ruling, Pregerson gave Palmer’s companies a chance to amend and refile their lawsuit with more details about their economic losses. Nevertheless, tenant advocacy groups including the Coalition for Economic Survival and Strategic Actions for Just Economy hailed the ruling as a major victory.

“We are grateful that the court saw this legal challenge for what it was: a false attempt to unravel the moratorium on emergency evictions and set a dangerous legal precedent that could undermine the protections of other tenants,” said Rachel Steinback, an attorney. for Neighborhood Legal Services of Los Angeles County, which helped represent tenant advocacy groups.

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A City Atty spokesperson. Mike Feuer said his boss is happy with the ruling but declined to comment further.

Councilors have met in recent months to discuss when the city’s COVID-19 tenant protection, considered one of the strongest in the country, should be lifted – and what should replace it. With only weeks left in the council’s legislative year, a decision on that may not be made until January, when five new councilors will have taken office.

After the moratorium has expired, tenants have one year to pay rent in arrears. The ordinance prohibits landlords from charging interest or arrears on that money.

The eviction protections were first put in place by Mayor Eric Garcetti as an emergency order in March 2020, and approved by the council as an ordinance weeks later.

In their lawsuit, GHP and the other companies argued that the moratorium arbitrarily shifted the financial burden caused by the pandemic from tenants to property owners. They also said the ordinance violated the inclusion clause enshrined in the 5th Amendment, which states that private property cannot be used for public use without “just compensation.”

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Pregerson said in his ruling that Palmer’s companies failed to demonstrate that their economic losses were significant enough to be considered a takeover under the law.

Tenant advocates say the city’s emergency tenant protections have staved off a wave of evictions and kept families from moving into overcrowded housing or homeless shelters, allowing the coronavirus to spread.

“Governments have a duty to protect vulnerable citizens in the midst of a global catastrophe,” said Ryan Kendall, a staff attorney at the Legal Aid Foundation of Los Angeles. “The Constitution does not leave tenants helpless in the face of an ongoing pandemic.”

GHP also has a separate lawsuit pending against Los Angeles County over emergency tenant protections. No ruling has yet been made in that case, said provincial spokesman Jesus Ruiz.

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