California Court of Appeal Holds That the City of Los Angeles Economic Displacement Ordinance Is Preempted by State Law

On April 15, 2026, the California Court of Appeal issued a decision in Apartment Association of Greater Los Angeles v. City of Los Angeles.

The case involved a challenge by the Apartment Association of Greater Los Angeles (“AAGLA”) to two Los Angeles ordinances adopted after the expiration of certain COVID-19 related tenant protections.

The first ordinance, the Eviction Threshold Ordinance (Ordinance No. 187763), limits certain evictions for nonpayment of rent unless the amount owed exceeds one month of fair market rent. (See Los Angeles Municipal Code sections 151.09(A) and 165.03(A).)

The second ordinance, the Relocation Assistance Ordinance (Ordinance No. 187764), required payment of relocation assistance to certain tenants in non-rent-controlled units who vacated after specified lawful rent increases. (See Los Angeles Municipal Code section 165.09.)

AAGLA challenged both ordinances on the ground they were preempted by state law. After the trial court rejected those claims, AAGLA appealed.

The Court of Appeal upheld the Eviction Threshold Ordinance, concluding it creates a substantive limitation or defense relating to eviction grounds rather than an improper procedural modification of California unlawful detainer law. The Court further held the ordinance falls within the City’s police power.

The Court of Appeal reached a different conclusion regarding the Relocation Assistance Ordinance. Relying in part on its recent decision in California Apartment Assn. v. City of Pasadena, the Court held the relocation assistance requirement was preempted by California’s Costa-Hawkins Rental Housing Act because it imposed a burden on landlords exercising state-law rights to increase rents for qualifying units.

Further appeals, City action, or legislative changes may still occur. Owners considering rent increases or related notices should confirm current legal requirements before moving forward.

Property owners and managers should also be aware that City forms, notices, and administrative guidance may be revised in response to this ruling. It is important to use the most current versions of required Los Angeles notices and disclosures.

A copy of the Court of Appeal decision is available from the Court of Appeal’s website here: https://www4.courts.ca.gov/opinions/nonpub/B336071.PDF

For further information, please contact us at (949) 748-3600.

The law firm of Wallace, Richardson, Sontag & Le, LLP represents landlords, property management companies, institutional and private lenders, employers and insurance companies throughout the State of California in real estate, business and employment litigation. The information provided herein is for general interest only and should not be relied upon or construed as legal advice.