Last year, Andre Dubois and his girlfriend were evicted, along with neighbors, from their rent-controlled apartments in Hollywood.
The property owner, Belmond Homes LP, wielded the power of the Ellis Act, a state law that allows such evictions to occur on the condition that the apartment units be taken off the market.
But months after moving out, Dubois and his girlfriend, who is battling cancer, said they were surprised to learn the units were being rented out on Airbnb.
The Los Angeles Housing and Community Investment Department opened up an investigation on the allegations of re-rentals and prepared to turn the case over to the city attorney. But then, last month, the same agency cleared the property owner to demolish the Hollywood apartments — even as its investigation continued.
The demolition unleashed complaints from community members that led to a stop-work order. But an attorney for the property owner said that order from the city wasn’t received until after the building was partially demolished.
The case of Belmond Homes highlighted an issue the city is focusing on more — alleged illegal short term rentals — but also provided an example of how bureaucratically complicated, and confusing, the process of dealing with these cases can be. Residents and the councilman representing the neighborhood both expressed bewilderment about the chain of events.
The housing department is now working with the city attorney to determine whether legal action can be taken against Belmond Homes for the alleged re-rental. The Department of Building and Safety is also preparing to turn over a case for violation of the stop-work order.
Councilman David Ryu, whose district includes Hollywood, introduced a motion aimed at preventing the housing department from issuing clearance for demolition while investigations are still going on.
“Developers should not be able to reap the benefits of the Ellis Act while simultaneously violating its other provisions,” Ryu said in his motion.
An attorney representing the property owner denies any wrongdoing.
Tenants who live next door to the demolished apartments and are facing eviction from Belmond Homes expressed concerns and joined others in protesting in the neighborhood last month.
“They shouldn’t be able to reap benefits for doing things illegally in this city. That’s rewarding illegal activity,” said Jianna Maarten, who is among those facing eviction. “I don’t think we should be a city that does that.”
Belmond Homes LP began evicting tenants last spring from the North Formosa Avenue apartments under the Ellis Act. The state law, passed in 1985, allows landlords to evict tenants if they intend to take the housing off the rental market or demolish the building to put up new apartments.
An Ellis Act application submitted March 8 stated that the apartments would be demolished for construction of new multi-family housing, according to Rushmore Cervantes, general manager of the city housing department. Belmond Homes fully complied with Ellis requirements, he said.
Then, in October, the department began receiving complaints that the units at the Formosa property were being rented out on Airbnb.
When department staff inspected the property in November, they found evidence of short-term rental use, Cervantes said. Staff issued a notice to comply to the owners for the violation of short-term rentals.
When staff did another inspection Jan. 9 and found the property still in violation, they began preparing the case for a referral to the city attorney, according to Cervantes.
That same month, former tenants filed a lawsuit against Airbnb for its role in renting the properties after the apartments were vacated. At the time, an Airbnb spokesman declined to comment on the lawsuit but said that the online platform has “long opposed landlords who remove housing from the market.”
“We deny any allegation of wrongdoing,” said Parham Hendifar, the attorney for Belmond Homes.
Illegal short term rentals, such as the ones alleged at the Formosa property, have been on the city attorney’s radar. The city attorney’s office filed criminal charges for the first time in a separate case last year.
At the time, City Atty. Mike Feuer said his office had made it a priority to investigate complaints about illegal short-term rentals.
Regarding the Formosa Avenue property, nothing has yet been referred to the city attorney’s office by the housing department, a city attorney’s office spokesman said.
Shortly after all rentals were ended at the Formosa Avenue units, construction fences went up outside the property, said Rich Koehler, who was also under an Ellis Act eviction. Koehler said neighbors were shocked when construction crews began demolition work on Jan. 20.
“We ran out, like, ‘What’s going on? You can’t do this, you guys have a case open against you,’” Koehler recalled.
Cervantes said his department’s clearance for demolition was given because the property owner had complied with the Ellis Act. But hours after giving the clearance, the department revoked it because of its own pending investigation, sowing more confusion.
“On the Ellis side, it had technically been achieved legally,” Cervantes said. “But that nuance of the Airbnb in the interim kind of added a wrinkle to it. That’s why we withheld it, just to be on the safe side.”
A stop-work order from the Department of Building and Safety was posted on Jan. 20 at 6 p.m., according to officials.
The next morning, residents and officials allege, construction crews continued demolition, despite a posted notice with a stop-work order and a statement of intent to revoke the permit.
Work ceased after the property owners learned of the intent to revoke the demolition permit, Hendifar said. The property owners have followed all procedures and are unfairly being portrayed as rule breakers, he said.
“There is a group of people who are ideologically opposed to the development. They are now being supported by some of the tenants in the neighboring building,” Hendifar said. “To push their narrative, they’re now spreading misinformation and untrue allegations regarding the demolitions.”
On Jan. 30, the housing department reinstated its Ellis clearance of the demolition permit, Cervantes said.
The remaining portions of the property were demolished the following day, Hendifar said.
Although the permit was issued once more, the Department of Building and Safety is “going to pursue the violation of the stop-work order,” said Jeff Napier, spokesman for the department.
A crowd of about two dozen gathered outside the demolished property on a recent weekday, carrying signs reading, “Stop breaking the rules mega developers” and “No more ruined neighborhoods.”
Many of them complained about residential management company, Wiseman Residential, which has a history of evicting tenants under the Ellis Act.
Dubois joined the crowd as they chanted, “Stop Wiseman, save Formosa.” The 54-year-old held a sign that read, “Wiseman abused the Ellis Act to evict my girlfriend who is dying of cancer.”
Hendifar said that developer Wiseman Residential is not involved with the Formosa property.
But Michael Cohanzad, senior vice president of development and business affairs for Wiseman, is listed as the agent of service for Belmond Homes. Belmond Homes’ listed address is the one for Wiseman Residential headquarters.
Over the last decade, Wiseman has evicted at least 237 tenants from rent-controlled properties in Los Angeles. The company purchased more than a dozen other properties where landlords had already used the state law to clear out apartments.
In an interview with The Times last month, a representative for Wiseman said the Formosa apartments were slated for demolition to make room for a new development.
“These buildings will be dirt in February,” Benjamin Cohan, president of Wiseman Residential, said at the time. Cohan was on-site with Hendifar on the recent weekday that community members gathered to protest.
When asked who would develop on the site, Hendifar said he was “not able to disclose confidential business information to the extent that they are not part of the public records.”
Times staff writers Ben Poston and Andrew Khouri contributed to this report.
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