LA Housing Department proposes increasing residential hotel enforcement

By Robin Urevich, Capital & Main, with additional reporting by Gabriel Sandoval, ProPublica

This story was originally published by ProPublica. ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

Series: Checked Out:LA’s Lost Residential Hotels

A 2008 city law was intended to preserve Los Angeles’ residential hotels as safety net housing. But the city has failed to enforce the law, leaving some lower-income Angelenos with nowhere to go amid a homelessness crisis.

The Los Angeles Housing Department is proposing to significantly increase staff and double the frequency of inspections of residential hotels in an effort to stop some landlords from renting the low-cost housing to tourists in violation of city law.

The recommendations, detailed in a report to the mayor’s office last month, follow an investigation by Capital & Main and ProPublica that found some residential hotel owners had turned their buildings into boutique hotels and were advertising nightly rentals on travel websites.

Since taking office in December, Mayor Karen Bass has made a major push to tackle the city’s housing and homelessness crisis by providing shelter for people living on the streets and speeding up construction of new affordable housing.

The city has paid less attention to preserving some of its already existing low-cost housing in residential hotels. Some 300 such buildings — which typically consist of basic single rooms, sometimes with shared bathrooms — were protected under a 2008 city ordinance. The law requires landlords to keep the buildings for long-term tenants or replace the units by building new ones or paying into a city housing fund.

But until recently, the law has gone largely unenforced. In response to the news organizations’ findings that 21 residential hotels were marketing rooms to tourists, Bass’ office requested that the Housing Department investigate the hotels. The department has since sent warning letters to 17 of the hotels and fined 13 of them. Nearly all the hotels have appealed the city’s enforcement efforts, and some have sued the city in federal court.

The mayor’s office also asked the Housing Department to report on how the lack of enforcement occurred and to make recommendations to prevent it from happening in the future. In the report, Ann Sewill, the Housing Department’s general manager, and Anna Ortega, an assistant general manager, blamed short staffing. They said that the department has only one inspector to oversee all 300 residential hotels across the city’s 487 square miles, and that his priority had been the conditions of the buildings.

“With additional resources and support, LAHD can dramatically and successfully elevate its ability to stop rogue property owners from violating the Residential Hotel Ordinance and undermining the availability of the housing stock,” they wrote to Mercedes Márquez, the mayor’s chief of housing and homelessness solutions.

In addition to more frequent inspections, Housing Department managers said they’ve requested funding for five residential hotel inspectors and two support staff in next year’s budget. They plan to continuously monitor online advertising and use “stakeouts” to collect evidence of tourist activity at hotels. They also want the city attorney’s office to have more resources to investigate cases and defend against lawsuits.

LA Deputy Mayor of Housing Jenna Hornstock said the Housing Department has taken “comprehensive” and “meaningful steps” toward residential hotel enforcement. More funding for enforcement, she said, will involve “hard conversations about the resources that we have and how we can best allocate them.”

The department said it would soon complete an audit of all of the city’s residential hotels to determine whether they are placing tourist ads. If it finds such ads, the department said it can use the city attorney’s administrative citation enforcement system to quickly sanction violators. However, the $527 fines — designed to keep minor offenders out of court — are relatively light. Maximum penalties for noise complaints or drinking in public are nearly double that amount.

Deepika Sharma, a University of Southern California law professor who directs the school’s housing law and policy clinic, said the Housing Department’s proposed approach won’t have teeth unless the city uses its legal authority to sue hotel owners who routinely ignore citations.

“It takes important impact cases to make a difference,” Sharma said, because taking a repeat violator to court sends a message that deters others. But she said the city attorney’s office hasn’t routinely done that.

Past attempts to enforce the residential hotel law from 2016 to 2018 fizzled when housing inspectors issued citations but failed to follow up on them. Afterward, the hotels continued to offer their rooms for short-term rentals in violation of the department’s orders.

The 17 hotels that were recently cited are also appealing to the Housing Department to reconsider their residential hotel status altogether. Sewill and Ortega said the department will hear all appeals by Nov. 30.

Barbara Schultz, director of housing justice at the Legal Aid Foundation of Los Angeles, questioned whether such appeals are permitted. She pointed out that the ordinance specifies that owners have 60 days after they’re notified of their residential hotel status to challenge the designation. The Housing Department made those notifications between 2008 and 2014.

“I’m curious as to why they’re allowing appeals at this point,” she said. “That’s a lot of units that could potentially be lost.”

Meanwhile, the owners of 12 of the residential hotels have sued the city in federal court in Los Angeles, alleging the Housing Department has infringed on their constitutional protections against unreasonable searches and seizures and government taking of private property.

Frank Weiser, the attorney who represents the owners, said in a text message he would not comment on the cases, “given the pending litigation with the city.” Weiser has unsuccessfully challenged LA’s residential hotel law at least twice in the past.

Ivor Pine, a spokesperson for the city attorney’s office, said the lawsuits won’t have an effect on the city’s current enforcement of the residential hotel law. He declined to comment on the lawsuit’s allegations.

Hornstock said the mayor’s office is currently working on setting Housing Department priorities for the coming year, including whether it can meet the department’s request for a beefed-up enforcement budget.

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox. Republished with Creative Commons License (CC BY-NC-ND 3.0).

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