The Court of Appeal affirmed the trial court’s denial of a writ of mandate demanding the City of Los Angeles (“City”) prepare an EIR for the conversion of a former rental apartment building into a hotel. The Court held that as the building had not been a part of the rental housing market for years, there was no need for an EIR to assess the loss of affordable housing.
The owner of an 18-unit apartment building in Hollywood filed an application in 2009 to convert the apartment complex into a 39-unit condo project. Between 2009-2014 all previous residents of the 18-unit complex vacated and the owner abandoned his plans to convert the property. Further, the owner withdrew the building in 2013 from the rental market as allowed by the Ellis Act rental use in 2013 and thereafter proposed a boutique hotel (“Project”). By July 2015, the owner filed applications for a CUP, variance, and rear yard adjustment with the City to convert the property. After conducting an initial study, the City determined “the Project would cause either a less-than-significant impact or no impact.” As a result, the City adopted a mitigated negative declaration (“MND”) in December 2015. An unincorporated association, Hollywoodians Encouraging Rental Opportunities (“HERO”), filed suit against the City to set aside the project approvals.
HERO alleged: 1) the record supported a fair argument of substantial environmental impacts resulting from the project, 2) the initial study failed to examine cumulative impacts and therefore the Project approvals were not proper, 3) the City improperly bifurcated the MND from the Project approvals, and 4) the City improperly handled HERO member Shain’s appeal to the Los Angeles Area Planning Commission. The trial court denied the petition concluding that the City used the proper baseline because during 2015 when the MND was approved by the City, there were no adverse impacts on population or housing due to the lack of tenants. The trial court affirmed the City’s determination that the Project was not subject to the Ellis Act because of the owner’s withdrawal of the units from residential use, as articulated by the Ellis Act. On appeal, the appellate court agreed. The appellate court found the building was uninhabited when the Project commenced in 2015. The appellate court rejected HERO’s contention that the units may be later restored as rental units as purely speculative and that the Ellis Act allows property owners to exit the residential real estate market. The record supported the City’s determination that the property was removed from the residential housing market in 2013 when residents vacated. As such, the appellate court held that the City used an appropriate baseline and HERO lacked a fair argument to prove the project may have a significant environmental impact.
HERO further alleged the City failed to analyze cumulative impacts. The court disagreed, concluding that because there was no substantial evidence to show an adverse project impact the City was not required to evaluate cumulative impacts. The appellate court acknowledged that it was aware of the shortage of affordable housing in Los Angeles. However, the appellate court determined that the building vacancy as a result of the Ellis Act effectively precluded evaluation of the loss of housing as part of a CEQA evaluation.
William Abbott is an Attorney at Abbott & Kindermann, Inc. Kristen Kortick is a Law Clerk at Abbott & Kindermann, Inc. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.
The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., or the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.