I recently wrote on the fact that at least seven members of the Los Angeles City Council are landlords, which may well have something to do with their reluctance to implement serious and effective protections for vulnerable tenants during the pandemic. And in the last few days tenants’ rights activists have organized two demonstrations at the home of Los Angeles Mayor Eric Garcetti to protest his failure to implement a blanket eviction ban and rent forgiveness during the pandemic.
So it didn’t really surprise me that much to learn that Garcetti is also a landlord. But I was surprised by the layered complexity of his real estate holdings, at least as compared to the fairly straightforward setups the Councilmembers have. It all starts, of course, with his Form 700, which lists three properties on Schedule B. One of these is a commercial building in the City of Beverly Hills but the other two are residential rentals in the City of Los Angeles.
First up we have 1299 Meadowbrook Avenue, which consists of three units, bought by Garcetti and his wife, Amy Wakeland, in 2016 as reported in the Los Angeles Times. On August 8, 2018 Garcetti and Wakeland formed the 1299 Meadowbrook LLC and then a few days later signed over the property to that entity as recorded in this grant deed. According to the Times article in 2016 the main house was listed at $5K per month and the two apartments at at least $2K each.
The next property listed is 1809 W. 37th Place, which is a duplex near Exposition and Western. This is listed as Amy Wakeland’s sole property, which is consistent with the grant deed, on which Garcetti’s name does not appear. She bought the property on July 10, 2018 and, I guess to be extra-safe, that same day Garcetti filed a transfer deed assigning his rights in the property to Wakeland.
And then things get really interesting! On Schedule A-1 of his Form 700, which covers “Stocks, Bonds, and Other Interests,” Garcetti lists a couple of limited partnerships, which are IPDR Associates and Del Rey Vista Associates. Later, on Schedule C, it turns out that IPDR owns a hotel at 435 Culver Blvd and Del Rey owns an apartment building at 11519 Culver. These two corporate entities were formed decades ago by zillionaire real estate developer Edward Zolla and are now owned by his widow, Susan Zolla.
Continue reading Eric Garcetti And His Wife Amy Wakeland Own Three Rental Properties Between Them — One Commercial In The City Of Beverly Hills — And Two Residential In The City Of Los Angeles — But Even More Interesting Than That Is Garcetti’s Shares In Two Real-Estate-Owning Limited Partnerships — Formed Decades Ago By Zillionaire Gil Garcetti Crony Edward Zolla — And Now Controlled By His Widow Susan Zolla — Both Of Whom Have Been Major Donors To Eric Garcetti’s Campaigns — And Apparently Also To His Personal Wealth By Allowing Him To Partner Up With Them In A Hotel And An Apartment Building
On Tuesday, March 17, 2020 the Los Angeles City Council considered an emergency ordinance to halt evictions and give renters 24 months to cover missed payments. Or at least that’s what the original motion, introduced by CD11 rep Mike Bonin, called for. During the debate, though, various other councilmembers, notably Paul Krekorian, Paul Koretz, and Herb Wesson, argued passionately against the harm that such an ordinance would do to the proverbial mom and pop landlords by giving these deadbeat tenants so damn long to settle up.
Two years is far long, they said. Mom and pops can’t afford to wait, they said. Will increase default rate, said they. They said all kinds of impassioned stuff in favor of reducing repayment time by a murderous 75%. But one of the things they didn’t say was that all three of these councilmembers are themselves landlords. It’s impossible to imagine that they weren’t thinking of their own interests while arguing to amend this motion. I wrote a piece on this a few days ago, the research for which also revealed that they weren’t the only three, by the way.
It turned out that Jose Huizar, Nury Martinez, and Curren Price are also landlords and also voted yes on the change to a 6 month grace period. My method of landlord discovery relied solely on Form 700s, which are annual financial disclosure forms required of elected officials in California. And rental income is a specific category which must be identified as such. For instance, consider the relevant section from Paul Krekorian’s most recent filing.
But it turned out that this method was flawed. Not flawed in the sense of producing false positives. The six that I identified are in fact landlords. Flawed, though, in the sense of producing false negatives based, as it is, on the disclosures being honest. And that’s how I missed the fact that CD4 representative David Ryu is also a landlord, although it’s certainly not obvious at all from his most recent Form 700. First, take a look at the relevant section:
He lists an assessor’s parcel number rather than an address. I didn’t previously look up the property, though, because he checked off the box indicating that he’d received no rental income. It turns out, though, that skipping this was a huge mistake on my part. I finally did look into the matter and it turns out that I had previously missed everything! Read on for the whole astonishingly sordid story of David Ryu and this property!
Continue reading David Ryu Certainly Seems To Be Yet Another Landlord On The Los Angeles City Council — And Apparently Perfectly Comfortable Voting On Various Tenants’ Rights Issues Without Recusing Himself Or Even Mentioning It — He And His Sister Esther Bought A Four Unit Apartment Building In 2018 — And Immediately Signed It Over To A Shady Entity Called Daejopia LLC — Controlled By Their Brother Joseph — Ryu Acknowledged On His Form 700 That He Owns The Building — Although He Lists It By Parcel Number Rather Than Address — But Denies Receiving Any Rental Income From It — Which Seems Really Highly Unlikely Given That It Appears To Be Fully Occupied — But Maybe He’ll Explain Himself If For Some Unknown Reason It Is True — Did I Mention That Kenneth Yoon — Who Sold The Building To David And Esther Ryu — Turned Around And Gave Ryu An $800 Contribution A Month After The Deal Closed? — And That The Ryus Only Needed To Borrow $460K On What Was Apparently A $840K Transaction?
Yesterday the Los Angeles City Council considered and passed a long list of motions intended to alleviate some of the devastating effects of the coronavirus pandemic on our City. One of the most essential of these was CD11 rep Mike Bonin’s motion to stop evictions and ban late rent fees until the end of the emergency declaration and then give renters 24 months to pay missed rent.
The meeting itself was interminable and the public is excluded from City Hall and had to sit out on the front patio under a tent. But fortunately a number of extremely hard-working reporters were on the case, and it’s due to the incomparable Sahra Sulaiman‘s live-tweeting of this episode that I’m able to tell the story I’m telling here.
Sulaiman reported that Paul Krekorian, our second fashiest councilmember, was all about 24 months to repay being far, far too long:
Can’t tell who (Krekorian?) suggests that we are shifting loss bc if we give tenants too much time to pay back, the grace pd may extend beyond their lease and therefore end up being uncollectable. And that we need to consider more options, like applying security deposit to rent.
Krekorian went on to say that:
He acknowledges some folks will never be able to pay it back and that some landlords can absorb that, but others cannot, and that may have other negative consequences.
Got it? Paul Krekorian acknowledges that some landlords can absorb the loss from tenants not paying back rent while other landlords cannot absorb the loss. This is his reason for wanting to cut the repayment period down from 24 months to 6 months.
Hey, did you know that California state law requires public officials like Paul Krekorian to file annual disclosures of their financial interests? Well, it does. They’re called “Form 700s” and here’s Paul Krekorian’s from 2018. And as expected, rental income is income and thus counts as a financial interest to be listed on the form.
Continue reading Yesterday The Los Angeles City Council Eviscerated A Reasonably Good Eviction Moratorium Motion — On The Insistence Of Paul Krekorian And Herb Wesson — Who Kept Talking Up The Needs Of The So-Called Mom And Pop Landlords — Who In Everyone’s Fantasies About Capitalism On A Human Scale Are Not Insatiable Villainous Psychopaths Like Non Mom And Pop Landlords Are — And Somehow Neither Krekorian Nor Wesson Thought It Was Worth Mentioning That They Themselves Are Mom And Pop Landlords — As Is Paul Koretz — And Nury Martinez — And Curren Price — And Jose Huizar — And Mike Bonin’s Husband — Although Bonin Voted Against Krekorian’s Eviscerating Motion — So At Least There’s That
This is just a short (very late, sorry) report on the progress of the Cedillo/Harris-Dawson motion (found in CF 17-0454) to extend the same protections against arbitrary evictions granted to tenants in buildings covered by the Rent Stabilization Ordinance to all tenants in the City. The motion was heard by the Housing Committee at its June 21 meeting. A report was approved (transcription after the break) and sent to the full Council, where it is on the calendar for June 28. The motion instructs HCIDLA to report back to the Council on the feasibility of preparing an ordinance. It looks like it’s headed for passage, and it looks like Cedillo is pushing it hard, but there’s a lot to be done before we have a law in place.
Anyway, I downloaded the audio of the meeting from the City and put it up on Archive.Org if you’re interested. This item starts at 1:28:58. It’s definitely worth a listen. Both Cedillo and Harris-Dawson are actually willing to argue with the opposing comment-makers, which is refreshing behavior from our Council, and they don’t seem willing to compromise about this ordinance, which bodes well for its success. In particular, Gil Cedillo repeatedly makes the point that it makes no sense at all to have one level of protection for poorer tenants in RSO buildings and another, weaker level for tenants in non-RSO buildings.
Meanwhile, it’s instructive to listen to the opposing public comments, if only to understand the class rage and the sense of entitlement of the property-owning classes in Los Angeles. They’re so used to getting their way that they don’t seem to even feel like their arguments have to make sense. Just for instance, listen to this comment by Valley landlord and former bandleader Horace Heidt, Jr. (transcription after the break). His argument seems to be that if they’re required to have reasons for evicting tenants, the construction of new units will halt completely. It’s not the worst comment, it’s not the meanest comment, but it’s unique in that he makes no attempt whatsoever to connect the two propositions. Why would this happen? Being a zillionaire, it seems, means never having to explain what the heck you’re talking about.
Continue reading Housing Committee Hears Cedillo/Harris-Dawson Just Cause Eviction Motion, Public Comments From Opposition Continue To Make No Damn Sense Whatsoever, Motion Scheduled For Full Council On June 28
This story is way off my beat, but it’s interesting and I haven’t seen it covered anywhere else, so I thought I’d write a short note about it. On April 19, Gil Cedillo and Marqueece Harris-Dawson initiated Council File 17-0454 with this motion, which instructs HCIDLA to recommend to the Council an ordinance which would prohibit landlords from evicting tenants in units NOT subject to the Rent Stabilization Ordinance without “just cause.”
Just cause would be defined as it is in the RSO, which at §151.09 gives a list of 14 allowable reasons for eviction. Laws like this are being adopted throughout the Bay Area, and the motion instructs HCIDLA to ask cities up there how they’re doing it.
This ordinance won’t solve everything, and of course there are some loopholes, most notably in paragraph 10, which essentially duplicates the much-abused, much-reviled Ellis Act, allowing evictions in case the owner is going to demolish the structure or remove it from the rental market. But nothing’s perfect, and a law like this would be far, far better than nothing. It will be interesting to see what kind of pushback the zillionaires apply. My guess is that it’s too politically harmful for them to come out explicitly against it, so they’ll support it and rely on loopholes and an always-sympathetic City government to be sure that it won’t actually apply to them at all.
Turn the page for the complete text of the motion.
Continue reading Gil Cedillo and Marqueece Harris-Dawson Introduce Measure To Prohibit Evictions Of Renters In Non-Stabilized Units Except For Just Cause As Defined In The RSO