Court Opinion

ID: 7803708
Source: CourtListenerOpinion
Date Created: 2022-08-25 23:01:33.875094+00
Date Added: 2024-06-11T16:29:42.314204
License: Public Domain

Filed 8/24/22
                CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                SECOND APPELLATE DISTRICT

                       DIVISION SEVEN

RICHARD S. HIRSCHFIELD,             B312960
as Trustee, etc.,
                                    (Los Angeles County
     Plaintiff, Cross-              Super. Ct. No. SC124349)
complainant and Appellant,

       v.

TANYA COHEN,

       Defendant;

SANTA MONICA RENT
CONTROL BOARD,

     Intervener, Cross-
defendant and Respondent.

     APPEAL from a judgment of the Superior Court of Los
Angeles County, Mark A. Young, Judge. Affirmed.
     Rosario Perry and Steven A. Coard for Plaintiff, Cross-
complainant and Appellant.
     Santa Monica Rent Control Board, Alison Regan and
Hakhamanesh M. Mortezaie, for Intervener, Cross-defendant and
Respondent.
                __________________________

       Richard Hirschfield appeals from a declaratory judgment
finding the property he owns at 746 Marine Street in Santa
Monica is subject to the City of Santa Monica’s (City) rent control
law. In 1994 Hirschfield, as trustee of the Richard S. Hirschfield
Trust, purchased four contiguous lots designated as 738 through
746 Marine Street in Santa Monica; the lots in turn contained
five rental units that were spread over the four parcels. In 2004
Hirschfield withdrew the five rental units from the residential
rental market under the Ellis Act (Gov. Code, § 7060 et seq.).1
Hirschfield demolished the existing structures and erected in
their place four single-family dwellings, each located on a
separate assessor parcel. In 2009 Hirschfield rented the dwelling
at 746 Marine Street (the property) to Tanya Cohen.
       Hirschfield filed a complaint for declaratory relief against
Cohen, and the Santa Monica Rent Control Board (Board) filed a
complaint in intervention against Hirschfield. In adjudicating
the claims of Hirschfield and the Board, the trial court found the
property was subject to rent control under section 7060.2,
subdivision (d), of the Ellis Act (section 7060.2(d)), which
authorizes local agencies to impose rent controls if
“accommodations are demolished, and new accommodations are
constructed on the same property, and offered for rent or lease

1    All further undesignated statutory references are to the
Government Code.

                                 2
within five years of the date the accommodations were
withdrawn from rent or lease, . . . notwithstanding any
exemption from the system of controls for newly constructed
accommodations.”
       Hirschfield contends that because there is a now a single-
family dwelling on the property, it is exempt from the City’s rent
control laws under the Costa-Hawkins Rental Housing Act (Civ.
Code, § 1954.52 et seq.; Costa-Hawkins Act), which proscribes the
imposition of rent controls on “a dwelling or a unit” that is
“alienable separate from the title to any other dwelling unit . . . .”
(Id., subd. (a)(3)(A).)
       We do not read the Costa-Hawkins Act so broadly to
supersede the Ellis Act. Section 7060.2(d) of the Ellis Act applies
to the single-family dwelling on Hirschfield’s property
notwithstanding the Costa-Hawkin Act’s exemption from local
rent control for separately alienable dwelling units, because the
house is an “accommodation” under section 7060.2(d) of the Ellis
Act; it was constructed on the same property as the five former
rent-controlled units; and it was offered for rent within five years
from when the five units were withdrawn from the rental market.
The legislative history of the Ellis Act makes clear the
Legislature intended to discourage landlords from evicting
tenants from rent-controlled accommodations under the false
pretense of leaving the rental business. This intent would be
defeated if a landlord could evade rent control by evicting tenants
and simply replacing one (or more) rent-controlled
accommodations with a single-family dwelling. We affirm.

                                  3
      FACTUAL AND PROCEDURAL BACKGROUND

A.    Redevelopment of the Property
      The material facts are undisputed. In 19942 Hirschfield
purchased four contiguous lots in the City designated 738
through 746 Marine Street. The four lots shared an assessor’s
parcel number and included three structures situated without
precise regard to the lot lines, including two single-family
dwellings and one three-unit multi-family dwelling. The five
units shared a single street address at 738 Marine Street (the
units were sub-designated A, B, C, D, and E) and were used as
rental units subject to the City’s rent control law.
      In 2004 Hirschfield decided to demolish the existing
structures and build four single-family detached houses, each one
on a separate lot, with the intention of selling three of the houses
and living in the fourth. On December 3, 2004 Hirschfield
recorded a “notice of intention to withdraw accommodations from
rent or lease” under the Ellis Act, section 7060.4, subdivision (a),
terminated the existing tenancies, and provided the tenants with
relocation assistance as provided by the City’s regulations
implementing the Ellis Act.3 In connection with the permitting

2     Although the trial court’s order states Hirschfield
purchased the property in 2004 (apparently based on a
typographical error in the complaint), the parties do not dispute
that Hirschfield purchased the property in 1994.
3     Section 7060.4, subdivision (a), of the Ellis Act authorizes a
public agency to require the owner of a rent-controlled
accommodation to notify the agency “of an intention to withdraw
those accommodations from rent or lease.” The City implements
the withdrawal provisions of the Ellis Act in Chapter 16 of the

                                 4
process for the new construction, in 2006 the City’s zoning
administrator issued findings and determinations for each lot
stating the new houses were exempt from rent control because
they were single-family dwellings. Each lot was also assigned a
separate assessor’s parcel number.
      In early 2009 Hirschfield completed construction of the four
single-family houses and moved into the house at 738 Marine
Street. On September 18, 2009 Hirschfield entered into a written
lease agreement with Cohen to lease the house at 746 Marine
Street for a one-year term at $4,900 per month. Hirschfield and
Cohen later renewed the lease annually, with the last lease
expiring at the end of 2012. Starting in January 2013, Cohen’s
tenancy continued as a month-to-month tenancy.

B.     The Rent Control Dispute
       In early 2013 Hirschfield notified Cohen of a rent increase
to $5,300 a month, which she did not dispute. In June 2013
Hirschfield notified Cohen of another rent increase to $5,800 per
month. Cohen complained to Hirschfield about the second
increase, stating the property was subject to rent control and the
increase exceeded the allowable adjustment. Hirschfield
responded that the house was exempt from rent control because
it was a single-family dwelling.
       On July 23, 2013 a staff attorney with the Board sent a
letter to Hirschfield stating all four of Hirschfield’s houses on
Marine Street were subject to rent control and must be registered

Santa Monica Rent Control Board Regulations pursuant to
authority delegated to the Board by the Santa Monica Rent
Control Charter Amendment (Santa Monica City Charter,
art. XVIII, § 1803, subd. (g)).

                                5
with the Board. Citing section 7060.2(d) and Board Regulation
1631,4 the letter stated, “The Board has received a copy of a lease
that shows that you rented one of those units, 746 Marine Street,
on September 19, 2009. Because you rented one of the new units
less than five years after the withdrawal of the demolished units,
all four parcels are again subject to the rent control law.”
Hirschfield’s attorney responded with a letter stating the new
units were exempt from rent control because they were single-
family dwellings.
       On October 17, 2013 Cohen filed an administrative
complaint with the Board alleging the property was subject to
rent control, and that Hirschfield failed to register her tenancy
and increased her rent illegally. However, later that year Cohen
and Hirschfield entered into a settlement agreement and mutual
release resolving her complaint, in which Hirschfield agreed to
pay Cohen for excess rent collected, and the parties agreed the
“current lawful rent” beginning in January 2014 was $5,058.54
per month.

4     Board Regulation 1631 is the local implementation of
section 7060.2(d) and provides in relevant part, “If the
accommodations are demolished, and new accommodations are
constructed on the same property, and offered for rent or lease
within five years of the date the accommodations were
withdrawn from rent or lease: [¶] (a) The newly constructed
accommodations shall be subject to the Rent Control Law [Santa
Monica City Charter, art. XVIII, § 1800 et seq.], notwithstanding
subsection 1801(c)(5) of said law [i.e., exempting new
construction]. This section shall apply to all units constructed on
the formerly withdrawn property, regardless of the number of
units withdrawn.”

                                 6
C.    The Declaratory Relief Action
      On June 18, 2015 Hirschfield filed a complaint against
Cohen alleging a single cause of action for declaratory relief,
seeking a judicial declaration that as a detached single-family
dwelling on its own separately alienable lot, the property was not
subject to rent control, and Hirschfield could increase Cohen’s
rent beyond the adjustments allowable under the City’s rent
control law. On August 4, 2015 the Board filed a complaint in
intervention against Hirschfield, seeking a judicial declaration
that the property was subject to rent control.5 Hirschfield filed a
cross-complaint against the Board seeking a declaration that all
four of the units on Marine Street were exempt from rent control
as single-family dwellings on separately alienable lots.
      On July 2, 2020 the trial court ordered briefing and set a
bench trial on the Board’s complaint in intervention and
Hirschfield’s cross-complaint. At the final pretrial conference,
the parties stipulated in lieu of a trial that the court could
“resolve the fully briefed legal issue as to whether [Hirschfield’s]

5
       On August 17, 2015 Cohen filed a cross-complaint against
Hirschfield, alleging Hirschfield violated Civil Code
section 1940.2 by using threats of force to try to evict her, and
that he violated Santa Monica Municipal Code section 4.56.020
by failing to provide required housing services, failing to perform
repairs and maintenance, verbally abusing her, threatening her
with physical harm, and otherwise interfering with her quiet
enjoyment of the property. Cohen’s cross-complaint is not at
issue in this appeal. Cohen also filed a special motion to strike
Hirschfield’s complaint (Code Civ. Proc., § 425.16), which the trial
court denied. We affirmed the denial of the motion in Hirschfield
v. Cohen (Mar. 27, 2018, B267706) (nonpub. opn.).

                                 7
property, which was rented by defendant Cohen, is subject to rent
control.”
       On October 14, 2020 the trial court issued a four-page
proposed order and statement of decision.6 The court described
the stipulated legal question before it as follows: “Does
California’s Ellis Act, Government Code section 7060.2(d), which
places ‘new construction’ back under rent control if the newly
constructed unit is re-rented within five years of the date of
withdrawal of the original rent-controlled apartments, also apply
to dwellings that are alienable separate from the title of any
other dwelling unit pursuant to Civil Code
Section 1954.52(a)(3)(A)[?]” The court answered in the
affirmative, reasoning that Apartment Assn. of Los Angeles
County Inc. v. City of Los Angeles, (2009) 173 Cal.App.4th
13 (Apartment Association) was “compellingly on point.”
       In Apartment Association, Division Three of this district
examined the interplay between section 7060.2(d) and Civil Code
section 1954.52, subdivision (a)(1), of the Costa-Hawkins Act.
The latter section exempts from rent control a dwelling that has a
certificate of occupancy issued after February 1, 1995. Division
Three considered the legislative history and public policy behind
the two laws and concluded the statutes could be harmonized by
construing section 7060.2(d) as an exception to Civil Code
section 1954.52, subdivision (a)(1)’s exemption for new
construction. (Apartment Association, supra, 173 Cal.App.4th at
pp. 25-26.) The court explained the purpose of the Ellis Act was
to allow cities to “promulgate ordinances that discourage

6     The record does not reflect that a hearing was held prior to
issuance of the proposed order and statement of decision.

                                8
landlords from evicting their tenants under the false pretense of
going out of business pursuant to the Ellis Act,” a purpose that
would be frustrated if the Costa-Hawkins Act superseded
section 7060.2(d). (Apartment Association, at p. 27.)
       Here, the trial court reasoned that the analysis in
Apartment Association applied equally to the interplay between
section 7060.2(d) and the exemption for separately alienable
dwelling units in Civil Code section 1954.52,
subdivision (a)(3)(A): “To adopt [Hirschfield’s] argument, the
[c]ourt would take a position inconsistent with that taken by the
Court of Appeal in Apartment Association, and impose a
needlessly restrictive view of the Ellis Act. [Hirschfield’s]
position would thwart the Ellis Act’s prime objective—preventing
evictions based upon false pretenses. The Court does not believe
that position is warranted.” The trial court concluded, “[I]f a
landlord demolishes a residential rental unit and builds new
residential rental units on the same property, even if these new
units are separately alienable from the title to any other dwelling
unit, and rents these new units within five years, then these new
rental units are also subject to rent control law as set forth in
Gov. Code § 7060.2(d). Under the agreed upon facts of this case,
746 Marine Street would be subject to Santa Monica’s rent
control law.”
       On November 4, 2020, after receiving the parties’ objections
to the proposed statement of decision, the trial court issued a
modified and final statement of decision substantially adopting
the proposed statement of decision.7 On February 26, 2021 the

7    On our own motion we augment the record to include the
November 4, 2020 final statement of decision. (Cal. Rules of
Court, rule 8.155(a)(1)(A).)

                                9
court entered a judgment incorporating the statement of decision,
holding the decision “disposes of the entirety of the action for
declaratory relief in which the Board had intervened, and in
which the Board had been sued as a defendant,” and the court
entered judgment for the Board against Hirschfield.8 Hirschfield
timely appealed.9

8      On January 13, 2022 the Board requested we augment the
record to include the trial court’s February 26, 2021 minute order
(entered on the date of the judgment), which explained that the
judgment resolved Hirschfield’s claim for declaratory relief as to
all four units. We granted the Board’s motion. As stated in the
February 26 order, Hirschfield argued the trial court’s statement
of decision failed to resolve the entirety of his cross-complaint
because he sought a declaration that all four of his Marine Street
properties were exempt from rent control. The trial court
rejected this argument, finding the court’s conclusion that
separately alienable rental units are subject to recontrol under
section 7060.2(d) “resolved the parties’ controversy,” and “[i]f
necessary, the parties may apply the facts to the Court’s ruling
with respect to the remaining three parcels.” Hirschfield does not
contend on appeal that the judgment did not fully resolve his
cross-complaint for declaratory relief.
9     On January 18, 2022, Cohen filed an application to join the
Board’s respondent’s brief as a real party in interest. After
inviting Cohen to submit authority supporting her application, on
January 24, 2022 we denied the application because Cohen’s
claims against Hirschfield remained pending and Cohen was not
a party to the judgment; therefore, Hirschfield properly omitted
Cohen as a respondent in this appeal.

                               10
                           DISCUSSION

A.     Standard of Review
       A trial court’s decision to grant or deny declaratory relief is
typically reviewed for abuse of discretion. (Meyer v. Sprint
Spectrum L.P. (2009) 45 Cal.4th 634, 647; accord, Hott v. College
of Sequoias Community College Dist. (2016) 3 Cal.App.5th 84, 96
[“‘[w]hether a determination is proper in an action for declaratory
relief is a matter within the trial court’s discretion and the court’s
decision to grant or deny relief will not be disturbed on appeal
unless it is clearly shown its discretion was abused’”].) However,
“[i]n a declaratory relief action where . . . the decisive underlying
facts are undisputed, our review of the propriety of the trial
court’s decision presents a question of law which we review de
novo.” (Hott, at p. 95; accord, Dolan-King v. Rancho Santa Fe
Assn. (2000) 81 Cal.App.4th 965, 974.) Moreover, the
interpretation of state statutes entails resolution of a pure
question of law, which we also review de novo. (California
Building Industry Assn. v. State Water Resources Control Bd.
(2018) 4 Cal.5th 1032, 1041 [“We review questions of statutory
construction de novo.”]; accord, Wang v. City of Sacramento Police
Dept. (2021) 68 Cal.App.5th 372, 378; see Carson Citizens for
Reform v. Kawagoe (2009) 178 Cal.App.4th 357, 366 [review of
declaratory relief is generally for abuse of discretion, but where
issue is one of statutory interpretation on undisputed facts, de
novo review is appropriate].)
       Here, the parties agree the material facts are undisputed,
and the appeal presents a question of statutory interpretation we
review de novo.

                                 11
B.    Principles of Statutory Interpretation
      When interpreting a statute, “our core task . . . is to
determine and give effect to the Legislature’s underlying purpose
in enacting the statutes at issue.” (McHugh v. Protective Life Ins.
Co. (2021) 12 Cal.5th 213, 227 (McHugh); accord Jarman v. HCR
ManorCare, Inc. (2020) 10 Cal.5th 375, 381 (Jarman).) “We first
consider the words of the statutes, as statutory language is
generally the most reliable indicator of legislation’s intended
purpose. [Citation.] We consider the ordinary meaning of the
relevant terms, related provisions, terms used in other parts of
the statute, and the structure of the statutory scheme.”
(McHugh, at p. 227; accord, Jarman, at p. 381 [“‘We do not
examine that language in isolation, but in the context of the
statutory framework as a whole in order to determine its scope
and purpose and to harmonize the various parts of the
enactment.’”].) “It is a basic canon of statutory construction that
statutes in pari materia should be construed together so that all
parts of the statutory scheme are given effect.” (Lexin v. Superior
Court (2010) 47 Cal.4th 1050, 1090-1091; accord, Law Finance
Group, LLC v. Key (2021) 67 Cal.App.5th 307, 317.)
      “We have long recognized the principle that even though a
statute may appear to be unambiguous on its face, when it is
considered in light of closely related statutes a legislative purpose
may emerge that is inconsistent with, and controlling over, the
language read without reference to the entire scheme of the law.”
(Droeger v. Friedman, Sloan & Ross (1991) 54 Cal.3d 26, 50.) “‘If
two seemingly inconsistent statutes conflict, the court’s role is to
harmonize the law. [Citations.] We presume that the
Legislature, when enacting a statute, was aware of existing
related laws and intended to maintain a consistent body of

                                 12
rules.’” (Apartment Association, supra, 173 Cal.App.4th at p. 21;
accord, Moore v. Superior Court of Riverside County (2020)
58 Cal.App.5th 561, 574.)
       “‘If the language is clear, courts must generally follow its
plain meaning unless a literal interpretation would result in
absurd consequences the Legislature did not intend.’” (Jarman,
supra, 10 Cal.5th at p. 381.) However, “[i]f the relevant statutory
language is ambiguous, we look to appropriate extrinsic sources,
including the legislative history, for further insights.” (McHugh,
supra, 12 Cal.5th at p. 227; accord, Mendoza v. Fonseca McElroy
Grinding Co., Inc. (2021) 11 Cal.5th 1118, 1125 [“‘If the statutory
language permits more than one reasonable interpretation,
courts may consider other aids, such as the statute’s purpose,
legislative history, and public policy.’”].)

C.     Relevant Statutory Provisions
               1.     The Ellis Act
       The Ellis Act, enacted in 1985, provides, “No public
entity . . . shall, by statute, ordinance, or regulation, or by
administrative action implementing any statute, ordinance or
regulation, compel the owner of any residential real property to
offer, or to continue to offer, accommodations in the property for
rent or lease . . . .”10 (§ 7060, subd. (a).) Section 7060.7 makes

10    “Accommodations” are defined in the Ellis Act as
“residential rental units in any detached physical structure
containing four or more residential rental units” (§ 7060,
subd. (b)(1)(A)) or, “[w]ith respect to a detached physical
structure containing three or fewer residential rental units, the
residential rental units in that structure and in any other

                                13
clear the Legislature’s intent that a landlord has an absolute
right “to go out of business.” However, the Act affirms public
entities’ authority to regulate a landlord’s withdrawal from the
rental housing market. Among other things, public entities may
impose notice requirements and withdrawal procedures
(§ 7060.4); they retain the power to make and enforce laws and
regulations “to mitigate any adverse impact on persons displaced
by reason of the withdrawal” (§ 7060.1, subd. (c)); and they may
“grant or deny any entitlement to the use of real property,
including, but not limited to, planning, zoning, and subdivision
map approvals” (id., subd. (b)). Section 7060.7 further provides
the Ellis Act is not intended to “[i]nterfere with local
governmental authority over land use,” “[p]reempt local . . . land
use regulations, procedures, or controls that govern the
demolition and redevelopment of residential property,” or
“[o]verride procedural protections designed to prevent abuse of
the right to evict tenants.” (§ 7060.7, subds. (a)-(c).) “Considered
in its entirety, ‘the Ellis Act does not prohibit local governments
from providing procedural protections designed to prevent abuse
of the right to evict tenants (§ 7060.7, subd. (c)), [but] it
“completely occupies the field of substantive eviction controls over
landlords who wish to withdraw” all units from the residential
rental market.’” (San Francisco Apartment Assn. v. City and
County of San Francisco (2016) 3 Cal.App.5th 463, 478.)
       Section 7060.2 establishes the circumstances under which
property withdrawn from the rental market under the Ellis Act
can become subject again to rent control, commonly referred to as

structure located on the same parcel of land, including any
detached physical structure . . . .” (§ 7060, subd. (b)(1)(B).)

                                  14
recontrol. Section 7060.2 provides, “If a public entity, by valid
exercise of its police power, has in effect any control or system of
control on the price at which accommodations may be offered for
rent or lease, that entity may, notwithstanding any provision of
this chapter, provide by statute or ordinance, or by regulation
. . . , that any accommodations which have been offered for rent
or lease and which were subject to that control or system of
control at the time the accommodations were withdrawn from
rent or lease, shall be subject to” recontrol under specified
circumstances. For example, if accommodations are offered for
rent within 10 years of withdrawal, the public entity may require
the landlord to offer the accommodations first to displaced
tenants. (§ 7060.2, subd. (c).) If the accommodations are offered
for rent within five years of withdrawal, they must be offered at
the rents in place at the time of withdrawal, plus annual
adjustments authorized under the rent control law. (Id.,
subd. (a).) And if the accommodations are offered for rent within
two years of withdrawal, they are treated as if they were not
withdrawn, and the landlord must offer the accommodations to
displaced tenants and may be liable for actual and exemplary
damages for displacement of the tenants. (Id., subd. (b).)
         Section 7060.2(d) applies when withdrawn accommodations
are demolished. Section 7060.2(d) provides, “If the
accommodations are demolished, and new accommodations are
constructed on the same property, and offered for rent or lease
within five years of the date the accommodations were
withdrawn from rent or lease, the newly constructed
accommodations shall be subject to any system of controls on the
price at which they would be offered on the basis of a fair and
reasonable return on the newly constructed accommodations,

                                15
notwithstanding any exemption from the system of controls for
newly constructed accommodations.”

             2.    The Costa-Hawkins Act
       The Costa-Hawkins Act, enacted in 1995, generally
prohibits public entities from applying rent control laws to
certain categories of dwellings, including newly constructed
rental units. (Apartment Association, supra, 173 Cal.App.4th at
p. 24.) Further, the Act prohibits public entities from regulating
the rents at which vacant dwellings may be offered to the public,
known as vacancy decontrol. (Action Apartment Assn., Inc. v.
City of Santa Monica (2007) 41 Cal.4th 1232, 1237; Apartment
Association, at p. 24; see Civil Code, § 1954.53, subd. (a).)
       Civil Code section 1954.52, subdivision (a), provides,
“Notwithstanding any other provision of law, an owner of
residential real property may establish initial and all subsequent
rental rates for a dwelling or a unit about which any of the
following is true: [¶] (1) It has a certificate of occupancy issued
after February 1, 1995. [¶] (2) It has already been exempt from
the residential rent control ordinance of a public entity on or
before February 1, 1995, pursuant to a local exemption for newly
constructed units. [¶] (3)(A) It is alienable separate from the
title to any other dwelling unit or is a subdivided interest in a
subdivision, as specified in . . . the Business and Professions
Code.”11 “‘The effect of this provision was to permit landlords ‘to

11    The subdivision exemption is limited under Business and
Professions Code section 11004.5, subdivisions (b), (d), and (f), to
community apartment projects, stock cooperatives, and interests
in these and similar entities for shared property ownership not at
issue here.

                                16
impose whatever rent they choose at the commencement of a
tenancy.’” (Action Apartment Assn., Inc. v. City of Santa Monica,
supra, 41 Cal.4th at p. 1237.)

D.    Section 7060.2(d) of the Ellis Act Applies to Replacement of
      Multi-unit Apartments with Single-family Dwellings
      Section 7060.2(d)’s provision for replacement of demolished
rent-controlled units draws no distinction between multi-unit
dwellings and single-family dwellings—it simply provides that if
rent-controlled “accommodations are demolished, and new
accommodations are constructed on the same property,” the new
accommodations are subject to rent control if offered for rent or
lease within five years of withdrawal. And as discussed, the Ellis
Act defines “[a]ccommodations” to include not only multi-unit
structures but “detached physical structure[s] containing three or
fewer residential rental units,” which would include single-family
dwellings. (§ 7060, subd. (b)(1)(A), (B).)
      The Board contends that because section 7060.2(d) clearly
applies to single-family dwellings, Hirschfield’s property falls
within the recontrol provision, and our inquiry ends there. But
even where a statute appears unambiguous on its face, we do not
examine the language in isolation, but rather, in the context of
the entire statutory system and closely related statutes.
(Jarman, supra, 10 Cal.5th at p. 382; Droeger v. Friedman, Sloan
& Ross, supra, 54 Cal.3d at pp. 43, 50.) In contrast to the Ellis
Act, the Costa-Hawkins Act distinguishes between types of
accommodations, unambiguously exempting single-family

                               17
dwellings12 from rent control “[n]otwithstanding any other
provision of law.” (Civ. Code, §1954.52, subd. (a)(3)(A).)
       Hirschfield contends an interpretation of section 7060(d) of
the Ellis Act to apply its limits on replacement of demolished
rent-controlled units to new single-family dwellings places the
Ellis Act in direct conflict with the Costa-Hawkins Act. In
making this argument, Hirschfield highlights that section
7060.2(d) includes an express exemption for new construction,
stating recontrol of demolished accommodations applies
“notwithstanding any exemption from the system of controls for
newly constructed accommodations,” while remaining silent as to
single-family dwellings. As Hirschfield argues, “If the Rent
Board’s position were correct . . . [t]he [L]egislature could have
simply omitted the final clause of the operative provision so that
single family dwellings would be automatically included within
the sweep of section 7060.2(d) . . . .”
       Construing the Ellis and Costa-Hawkins Acts together, as
we must, given that they address the same subject matter (Law
Finance Group, LLC v. Key, supra, 67 Cal.App.5th at p. 317), we
conclude section 7060.2(d) is ambiguous with respect to whether
it applies to the replacement of rent-controlled units with single-

12    We agree with Hirschfield that for purposes of our analysis,
the statutory language in Civil Code section 1954.52,
subdivision (a)(3)(A), which applies to a dwelling or unit that is
“alienable separate from the title to any other dwelling unit,”
includes a single-family dwelling. Because this case involves
replacement of a rent-controlled, multi-unit dwelling with a
single-family dwelling, we discuss separately alienable dwelling
units under this Civil Code section in the context of single-family
dwellings. Our analysis would apply similarly to other types of
separately alienable dwelling units.

                                18
family dwellings. Accordingly, we turn to the legislative history
and relevant extrinsic evidence to determine legislative intent.
(McHugh, supra, 12 Cal.5th at p. 227; Mendoza v. Fonseca
McElroy Grinding Co., Inc., supra, 11 Cal.5th at p. 1125.)
        The Legislature adopted the Ellis Act in direct response to
Nash v. City of Santa Monica (1984) 37 Cal.3d 97, in which the
Supreme Court upheld a Santa Monica ordinance requiring
property owners to obtain Board approval before demolishing
rental housing or converting it to condominiums. (See § 7060.7
[“It is the intent of the Legislature in enacting this chapter to
supersede any holding or portion of any holding in [Nash] to the
extent that the holding, or portion of the holding, conflicts with
this chapter, so as to permit landlords to go out of business”]; see
also Apartment Association, supra, 173 Cal.App.4th at pp. 22-23
[“The purpose of the Ellis Act ‘is to allow landlords who comply
with its terms to go out of the residential rental business by
evicting their tenants and withdrawing all units from the
market’”].)
        Senate Bill No. 505 (Senate Bill 505), which enacted the
Ellis Act, did not initially include section 7060.2. (Sen. Bill 505
(1985-1986 Reg. Sess.) § 1, as introduced Feb. 20, 1985.)
However, opponents of Senate Bill 505 argued the proposed law
would undermine local rent control ordinances and state laws
protecting tenants. As the Senate Judiciary Committee report
explained, “Opponents assert that the bill would ‘back-door’ local
rent control ordinances by limiting the effectiveness of eviction
standards and measures to preserve housing. They allege that
this bill could permit property owners to take a unit off the
market and evict the tenant under the pretext of going out
business, then relet the property as a new rental 6 months later.

                                 19
Opponents state that eviction protections are a frequently used,
reasonable, and effective legislative response to the housing
shortages, and that when a severe housing shortage exists, a city
is best able to meet its obligations by preserving existing housing
and prohibiting arbitrary evictions, demolitions, and
conversions.” (Sen. Com. on Judiciary, Rep. on Sen. Bill 505
(1985-1986 Reg. Sess.) as amended Apr. 18, 1985, p. 4.)
       The recontrol provisions of section 7060.2 were added to
Senate Bill 505, along with other amendments, to address these
concerns. (See Sen. Com. on Judiciary, Analysis of Sen. Bill 505
(1985-1986 Reg. Sess.) as amended May 15, 1985, p. 5 [“In
response to concerns that the bill could permit property owners to
evade rent control and other laws by ceasing to rent under the
guise of going out of business, the bill has been amended to
provide some safeguards against abuse.”]; Assem. Com. on
Judiciary, 3d reading analysis of Sen. Bill 505 (1985-1986 Reg.
Sess.) as amended Aug. 28, 1985, p. 4 [“This bill contains several
provisions designed to prevent landlords from using its provisions
to evade rent control and other laws by ceasing to rent under the
guise of going out of business.”].)
       The Senate Judiciary Committee in its report following the
May 15, 1985 amendment to Senate Bill 505 identified eight
safeguards that had been incorporated into the bill to prevent the
improper removal of housing units from the rental market, four
of which remain as part of section 7060.2, including recontrol if a
landlord offers to rent or lease accommodations within specified
time periods after withdrawal or demolition and reconstruction.
(Sen. Com. on Judiciary, Analysis of Sen. Bill 505 (1985-1986
Reg. Sess.) as amended May 15, 1985, pp. 5-7.) As to demolition
recontrol, the report stated, “If the rental units were withdrawn

                                20
from the marketplace and demolished and new rental units were
constructed in its place within 5 years of the date of withdrawal,
the new units could be subject to the local rent controls
notwithstanding any local exemption for new construction.” (Id.
at p. 7.)13
       During the same legislative session, Assembly Member Jim
Costa introduced Assembly Bill No. 483 (Assembly Bill 483),
which would have created exemptions to rent control similar to
those adopted a decade later in the Costa-Hawkins Act
(introduced by Assembly Member Hawkins and coauthored by
then-Senator Costa).14 Like the Costa-Hawkins Act, Assembly
Bill 483 would have imposed statewide vacancy decontrol, and it
included exemptions from rent control for new construction and
single-family dwellings. Specifically, Assembly Bill 483 proposed
to amend the Civil Code to provide, “Notwithstanding any other
provision of law, an owner of real property may establish the
rental rate for a rental unit . . . which is first occupied by a tenant
or lessee after the effective date of this section,” except in
circumstances not relevant here. (Assem. Bill 483 (1985-1986
Reg. Sess.) as amended June 20, 1985, § 2.) The bill would also

13    Other safeguards included a statement of legislative intent
that the Ellis Act was not intended to “interfere with local
governmental authority over land use” or “[o]veride procedural
protections to prevent abuse of the right to evict tenants.” (Sen.
Com. on Judiciary, Analysis of Sen. Bill 505 (1985-1986 Reg.
Sess.) as amended May 15, 1985, p. 9; see § 7060.7, subds. (b) &
(c).)
14    In 1995 then-Senator Costa introduced Senate Bill
No. 1257 (1995-1996 Reg. Sess.), which passed the Senate and
was later combined with Assembly Bill No. 1164 (1995-1996 Reg.
Sess.) to become the Costa-Hawkins Act.

                                  21
have amended the Civil Code to provide, “Notwithstanding any
other provision of law, an owner of real property may establish
the rental rate for a dwelling unit . . . if fee title to the dwelling
unit is separate from title to any other dwelling unit or if the
dwelling unit is a subdivided interest in a subdivision . . . .”
(Ibid., § 3.)
       Thus, the issue of statewide exemptions for both new
construction and single-family dwellings was before the
Legislature as it considered the Ellis Act. And among the
safeguards addressed by the May 15, 1985 amendments to
Senate Bill 505 were express provisions that the Ellis Act’s
recontrol provisions would take precedence over the vacancy
decontrol provisions of Assembly Bill 483. As the Senate
Judiciary Committee report explained, “AB 483 (Costa) would
permit landlords to increase the rental rate without regard to
local rent control laws whenever a unit was vacated under
specified circumstances . . . . In response to concerns that the
provisions of that bill do not preempt this bill if both are enacted,
this bill provides that the recontrol provisions of this bill would
prevail over the provisions of AB 483.” (Sen. Com. on Judiciary,
Analysis of Sen. Bill 505 (1985-1986 Reg. Sess.) as amended May
15, 1985, p. 9; see Assem. Com. on Judiciary, 3d reading analysis
of Sen. Bill 505 (1985-1986 Reg. Sess.) as amended Aug. 28, 1985,
p. 4 [The amended bill “[p]rovides that the recontrol provisions of
this bill would prevail over any conflicting provisions in AB 483
(Costa), if that bill is enacted”].)
       Further, the May 15, 1985 amendments to Senate Bill 505
addressed Assembly Bill 483 by, among other changes, amending
the demolition recontrol provision to read that if accommodations
were demolished and new accommodations constructed on the

                                 22
same property and offered for rent or lease within five years, the
newly constructed accommodations would be subject to rent
control, “notwithstanding any exemption from such a system of
controls for newly constructed accommodations, including any
such exemption enacted by Assembly Bill No. 483 of the 1985-86
Regular Session of the Legislature, if enacted.” (Sen. Bill 505
(1985-1986 Reg. Sess.) as amended May 15, 1985, § 1, p. 5, italics
added.) This and other references to Assembly Bill 483 were
removed by an August 28, 1985 amendment after Assembly Bill
483 failed, but the final version of Assembly Bill 505 retained the
phrase “notwithstanding any exemption from such a system of
controls for newly constructed accommodations.” (Stats. 1985,
ch. 1509, § 1, p. 5563; Sen. Bill 505 (1985-1986 Reg. Sess.) as
amended May 15, 1985, § 1)
       We conclude based on the May 15, 1985 amendments to
Senate Bill 505 to address opponents’ concerns that landlords
might engage in fraudulent withdrawals of rental units to
circumvent rent control, as well as the later amendments to
Senate Bill 505 to address concerns that Assembly Bill 483 (the
former version of the Costa-Hawkins Act) could be construed to
supersede recontrol protections, that the Legislature intended the
specific recontrol provisions in section 7060.2(d) to prevail over
general decontrol provisions, such as those found in the later-
enacted Costa-Hawkins Act. We also note that section 7060.2(d)
of the Ellis Act was amended in a nonsubstantive manner in 2002
(Stat. 2002, ch. 301 (Sen. Bill No. 1403 (2002-2003 Reg. Sess.)
§ 5)), which as the court in Apartment Association, supra, 173
Cal.App.4th at page 29 observed, “shows that after Costa-
Hawkins was enacted, the Legislature continued to regard
section 7060.2, subdivision (d) as the law of this state.”

                                23
      To exempt from section 7060.2(d)’s recontrol provisions a
newly constructed single-family dwelling that is rented or leased
on property formerly occupied by multi-unit dwellings that were
subject to rent control but subsequently demolished would
frustrate the clear legislative intent that landlords not be able to
evade rent control by simply demolishing rent-controlled units
and replacing them with new units that would not otherwise be
subject to rent control.15 Further, any other reading of section
7060.2(d)’s recontrol provisions would create an economic
incentive for landlords to replace multi-unit rental
accommodations with single-unit dwellings that diminish the
housing supply.16 Moreover, the Ellis Act was enacted to

15     Because we conclude section 7060.2(d) applies to single-
family dwellings, we do not reach the Board’s contention that the
properties on Marine Street are not, as a matter of municipal
law, “single-family homes” because each is contiguous with
another parcel also owned by Hirschfield. (See Santa Monica
City Charter, art. XVIII, § 1801(n) [defining “Single Family
Home” as “[a] property that has been developed with only one
one-family dwelling and any lawfully accessory structures”] and
§ 1801(m) [defining “Property” as “[a]ll rental units on a parcel or
lot or contiguous parcels or contiguous lots under common
ownership”].)
16    Section 7060.2(d) does not require a landlord to base initial
rents for newly constructed accommodations on the rents in effect
at the time of demolition of the former units; rather, the new
accommodations “shall be subject to any system of controls on the
price at which they would be offered on the basis of a fair and
reasonable return on the newly constructed accommodations.”
Thus, landlords retain an economic incentive to modernize rental
housing and receive a reasonable rate of return while providing

                                 24
guarantee a landlord the right “to go out of business.” (§ 7060.7.)
A landlord who, like Hirschfield, replaces multi-unit dwellings
with a single-family dwelling for rent has not gone out of the
rental business.
       Our reading of the Legislature’s intent is consistent with
the legislative history of the Costa-Hawkins Act, which “indicates
that the Legislature did not intend for Costa-Hawkins to affect
the rights of tenants who were already living in residential units
subject to rent control.” (Apartment Association, supra,
173 Cal.App.4th at p. 25, fn. 9; see Enrolled Bill Rep. on Assem.
Bill No. 1164 (1995–1996 Reg. Sess.) July 27, 1995, p. 5 [“[t]he
intent of the sponsor is to permit the operation of rent controls
that affect an existing tenant but to limit the ability of localities
to control rent setting when rental housing is vacated”]; Sen.
Rules Com., Off. of Sen. Floor Analyses, 3d reading analysis of
Assem. Bill No. 1164 (1995-1996 Reg. Sess.) as amended July 20,
1995, p. 3 [the bill would “[p]reempt local rent controls on the
rental of ‘single family’ dwellings, but preserves protections for
existing tenants”].) Thus, under section 1954.52, subdivision
(a)(3)(C), where a dwelling that is “alienable separate from the
title to any other dwelling unit” (including a single-family
dwelling) was subject to rent control as of January 1, 1995, the
landlord would only be entitled to establish a new rental rate (not
subject to rent control) for tenancies created on or after January
1, 1996 (§ 1954.52, subd. (a)(3)(C)(i)), or for tenancies that were in
effect on January 1, 1995 “where the tenant has voluntarily
vacated, abandoned, or been evicted pursuant to [the procedures

new tenants with the protection of capped subsequent rent
increases.

                                 25
for unlawful detainer]” (id., subd. (a)(3)(C)(iii)). Similar to the
Costa-Hawkins Act, which allowed rent-control to continue for
existing tenancies in single-family dwellings that were rented or
leased as of January 1, 1995, under the Ellis Act, a single-family
dwelling would be subject to rent control if it replaced a
demolished multi-unit dwelling, single-family dwelling, or other
dwelling where the dwelling was previously subject to rent
control.
       We are unpersuaded by Hirschfield’s argument that the
express inclusion in section 7060.2(d) of language clarifying that
its recontrol provision applies to demolition of accommodations
notwithstanding any exemption from rent control for newly
constructed accommodations implies a legislative intent not to
provide a similar exception for single-family dwellings. By
definition, every application of section 7060.2(d) involves the
construction of new accommodations in place of demolished
accommodations, and thus, inclusion of an express provision
clarifying the inapplicability of the exemption from rent control
for new construction avoids any ambiguity that might otherwise
render the section meaningless.17

17    Similarly, virtually every case of recontrol based on the
withdrawal of accommodations under section 7060.2,
subdivision (a), will involve premises vacated by the prior
tenants. Thus, section 7060.2, subdivision (a)(3), contains
language clarifying that recontrol “prevail[s] over any conflicting
provision of law authorizing the landlord to establish the rental
rate upon the initial hiring of the accommodations.” Otherwise,
the statute could have been read to allow the vacancy decontrol
provisions to prevail over section 7060.2, subdivision (a)’s
recontrol provisions.

                                26
       Apartment Association, supra, 173 Cal.App.4th 13 supports
our conclusion in recognizing the primacy of section 7060.2(d).
The Apartment Association court reconciled the recontrol
provision in section 7060.2(d) with the exemption from rent
control for new construction in Civil Code section 1954.52,
subdivision (a)(1), by construing section 7060.2(d) as an exception
to that exemption. (Apartment Association, at p. 25.) In reaching
this conclusion, the court reasoned that section 7060(d) was
entitled to preference as the more specific statute “because it only
deals with certain newly constructed residential rental units that
replace units withdrawn under the Ellis Act, whereas Civil Code
section 1954.52, subdivision (a)(1) deals more generally with all
newly constructed residential rental units that were issued a
certificate of occupancy after February 1, 1995.” (Apartment
Association, at pp. 27-28.) Just as the Ellis and Costa-Hawkins
Acts can best be reconciled by construing the recontrol provision
in section 7060.2(d) as an exception to section 1954.52,
subdivision (a)(1)’s exemption from rent control for new
construction, we construe section 7060.2(d) as an exception to
section 1954.52, subdivision (a)(3)’s exemption from rent control
for single-family dwellings.

                                27
                        DISPOSITION

     The judgment is affirmed. The Board is to recover its costs
on appeal.

                                    FEUER, J.
We concur:

     PERLUSS, P.J.

     SEGAL, J.

                               28