LOS ANGELES, Ca. (CBS NEWS) – A Los Angeles landlord illegally evicted tenants from their rent-controlled apartments and listed them on Airbnb, a lawsuit filed this month alleges. The suit accuses real estate developer Wiseman Management of tearing down rent-controlled housing to build luxury developments, depriving “immigrant, low-income, disabled, and elderly apartment tenants of their legal rights in order to put money in its own pocket.”

Tearing down rent-controlled housing to build new developments is legal in Los Angeles. But the conversion of long-term affordable housing into hyper-profitable short-term rentals is a growing problem in cities from New York to San Francisco, where housing advocates often clash with home-sharing apps.

Los Angeles’ rent control law covers about three-quarters of the city’s 620,000 rental units, but it also includes a number of exceptions that many tenants don’t know about. One of those loopholes, known as the Ellis Act, allows a landlord to take an entire building off the market – in order to live in it themselves, tear it down or convert the property into condos – as long as they give tenants a 120-day window to move out and some relocation funds.

“I was devastated”


The eviction came as a surprise to Jianna Maarten, a filmmaker who had lived in a two-bedroom apartment on Hollywood’s North Formosa Boulevard for 10 years, sometimes with her 63-year-old mother, Joanne Maarten.

“It was my first real apartment in Los Angeles. My best friend lived two doors down. I knew everyone on the street,” recalled Jianna, who is her late 30s.

In early 2016, Wiseman acquired the Maartens’ building and two neighboring buildings. That March, the new owners told the tenants they had four months to leave.

“I didn’t know about no-fault evictions, I didn’t know [the Ellis Act] existed,” said Jianna. “I was devastated and it was hard to get help.”

While the other tenants left, Joanne Maarten, who has a disability, was legally able to delay her move-out date by a year. Over that time, workers installed keyless locks on other apartment doors, put in new Ikea furniture and listed the units on Airbnb, according to the lawsuits.

“It was entire families of people staying in these apartments,” Joanne recalled.