Photo by Austin Laser on Unsplash
On Tuesday afternoon, the Los Angeles City Council voted unanimously to approve a motion requiring the disclosure of ownership for limited liability companies (LLCs) that purchase residential real estate.
The measure was put forth by councilmembers Mike Bonin and Marqueece Harris-Dawson, who represent the 11th and 8th districts, respectively. It will now be reviewed by City Attorney Michael Feuer, who will provide feedback on how the law could be implemented.
A similar piece of legislation was passed in New York state in 2019, mandating that LLCs identify all affiliated persons and their addresses on tax forms when transferring properties with one- to four-family dwelling units.
On Twitter, Bonin underscored the need to “curb [the] predatory forces that contribute to eviction, gentrification, and loss of affordable housing.” He cited the mass acquisition of foreclosed properties by LLCs in the wake of the 2008 housing crisis, noting that “we are seeing the same thing happening now.”
In addition to the disclosure requirements, the measure calls for 12-month minimum leases on rent-controlled apartments. This is an effort to combat shorter-term corporate rentals, which have sprung up in many LA neighborhoods, reducing the supply of rent-stabilized housing.
Companies and individuals often use LLCs to protect their identities, avoid personal liability or shield ties to investors. Bonin asserts that creating transparency in the city’s residential real estate market will help to “protect our neighborhoods and provide housing for hard-working Angelenos.”
