People's Victory: US Court of Appeals Rules to Protect Section 8 Tenants

The Coalition for Economic Survival (CES) scored a major tenants' rights victory when the 9th Circuit US Court of Appeals ruled in BARRIENTOS v. 1801-1825 MORTON LLC, that Los Angeles' rent control law is not preempted by federal laws or regulations.

The
decision, which has a national impact, specially provides Section 8 tenants living
at Morton Gardens Apartments in Echo Park protection against their landlord's
attempt to evict them.

In its ruling, the US
Court of Appeals, 9th Circuit, stated that "a landlord subject to the Los
Angeles Rent Stabilization Ordinance ("LARSO") served notices of eviction upon
tenants whose rent is subsidized by the federal government, because it desired
to raise the rent on the apartment units. Though LARSO prohibits eviction for
that purpose, Morton asserts that a U.S. Department of Housing and Urban
Development (HUD) regulation permits the eviction of an assisted tenant during
the lease term for "good cause" grounds, which "may include [the] desire to
lease the unit at a higher rental." We must decide whether HUD's "good cause"
regulation preempts the operation of the City of Los Angeles's eviction control
ordinance. We hold that it does not. We affirm the district court's grant of
summary judgment in favor of the tenants, permanent injunctive relief, and
award of attorney's fees."

City of LA and HUD Lent Support

CES' Long Efforts to Stop Evictions & Preserve the Affordable Housing

For more than the
last 20 years, CES has been assisting these tenants' efforts to fight off
evictions. Morton Gardens was developed in 1971 as a low-income rental housing
project through a HUD subsidized mortgage-secured low interest loan program.

Morton
Garden apartments is a 66-unit building which is situated just over a hill from
Dodger Stadium in Echo Park.

In 1998
the prior owners prepaid the subsidized loan in advance of the original loan
maturity date, thus removing the federal rent restrictions. As a result,
tenants in residence received "enhanced" Section 8 rent subsidy
vouchers, which entitled them the right to remain in their units, paying the
same rent and requiring landlords to accept these vouchers as long as the
tenants decide to stay and Congress provides the funding. In addition, other
tenants holding regular Section 8 vouchers have since moved in.

In
2003, the City and the tenants had obtained an earlier ruling from the 9th
Circuit Court that upheld the application of the City's rent control law to the
units, rejecting the owner's claim that federal law "preempted" local
rent protections.

Eric Sussman, who along with other partners bought the building for $8 million in 2006,
is not just any landlord. He teaches real estate at one of the nation's
preeminent business schools, the UCLA Anderson School of Management. CES and
tenants have argued that he should have known when he bought Morton Gardens that Section 8
tenants lived there and it is unethical of him to try to evict them just to
increase rents.

The
Morton Garden case involves two related, but distinct, federal tenant-based
housing subsidies: "enhanced Section 8 vouchers" and regular Section
8 "housing choice vouchers."

The
landlord was challenging the Congressionally enacted right to remain for the enhanced
voucher holders, as well as the applicability of the city's just cause eviction
law, which protects Section 8 tenants living in rent controlled units. Tenant
attorneys citywide have been defending tenants against a wave of 90-day Section
8 termination notices, arguing that a Section 8 contract cannot be terminated
until there is a vacancy and there needs to be a "just cause" reason
under the rent control law to evict a tenant to secure a vacancy.

In 2007, tenants, outraged by eviction
notices they received, rode a school bus to UCLA to protest outside his class.
They held signs, chanted and then presented Sussman with a ceramic piggy bank,
an award as the "Greediest Landlord in L.A."