Six weeks after Catalina Reyes’ ceiling collapsed in a flood, the tenant relocators returned to her Silver Lake apartment building.
Standing at the end of Reyes’ hallway in professional attire, the two women looked like customers from the brunch destination next door who had wandered onto a construction site. The corridor was being demolished while people — including Reyes — still lived in the space: workers had ripped out portions of the walls and ceiling, strewn sawdust across the carpet, and pasted caution tape across several doors.
“How are you?” one of the relocators said.
“How the fuck do you think I am?” Reyes said, charging down the hallway. The relocators rushed into a vacant apartment, according to Reyes, and shut the door behind them.
They were employees of Onyx Relocation, one of the most prominent companies in Los Angeles that landlords are hiring to buy tenants out of their rent-controlled leases.
Onyx’s business is called tenant relocation, or “retenanting,” and it’s a growing field. In a webinar for landlords shared with this reporter, Onyx CEO Shelby Istrin described her business as a “game of chess” she plays with tenants.
“Every move that you make is going to cause them to make a move,” she said.
But if tenant relocation is a game of chess, it’s chess played for money more typically associated with poker. Onyx charges landlords as much as ten thousand dollars for each unit it empties, and it collects three quarters of that fee only after the occupants have signed their agreement and left. According to Istrin, they offer lawyers on retainer, knowledge of the tenant-landlord legal landscape (including “what the tenant advocacy groups are doing”) and help identifying “leverage” against tenants.
Lawmakers, tenants and tenant groups say that, across Los Angeles, landlords are buying rent-controlled buildings predominantly occupied by immigrants and using illegal tenant harassment to force people out so they can re-rent their units at market rate.
And organizers say that relocators like Istrin are an increasingly common tool in this scheme. They say tenant harassment is so profitable that it has become an industry in its own right, and that the industry has spawned a profession: the tenant relocator, who cajoles or threatens tenants into leaving while their building falls to pieces around them.
More than 20 tenants who dealt with different relocators in Los Angeles said they were offered buyouts while their landlords stopped maintaining buildings, ignored health hazards like mold and conducted “gut renovations” that looked more like demolition than remodel. Some said relocators threatened them with eviction or falsely told them their building would be destroyed.
With buyouts, also known as “cash-for-keys” agreements, landlords spend money to make money: When a tenant leaves a rent-controlled apartment, the landlord can charge market rate to the next occupant, doubling or tripling their profits. Relocators also remove tenants so landlords can convert rent-controlled buildings to condominiums through the Ellis Act, a policy advocates and lawmakers accuse of eroding California’s affordable housing stock.
Before the flood, the relocators knocked on Catalina Reyes’ door once a week for several months, offering her $22,300 to vacate the rent-controlled apartment Reyes first leased in 2003 for $450. Nineteen years later, the Jalisco, Mexico native still shared it with her husband and children after her block transformed into one of the hottest on Sunset Boulevard.
The apartment was destroyed in March of 2022, when her ceiling collapsed in a rainstorm after construction crews removed her building’s roof and covered it with a sheet of plastic.
At Reyes’ building, tenants believe their landlord timed the removal of the roof with Onyx’ relocation offers. They say their landlord removed the roof knowing — hoping — that it would rain.
“It was right when they saw no one was responding to their cash-for-keys [offers],” says tenant Jesse Barboza. “Who abates a roof and leaves it exposed for a month?”
“After [the flood], they started coming again,” says Catalina Reyes. “[They said,] ‘Everything is ruined, it’s going to be a long time until this is repaired. Do you want to take cash-for-keys now?’”
“When All Else Fails…There’s Cash 4 Keys!”
At a webinar for landlords in 2021, Onyx Relocation CEO Shelby Istrin said her company helps property owners extract profits from their assets by replacing rent-controlled tenants with market rate tenants.
“Any time there is a large discrepancy between the rent being paid and the market rent is when you’d probably like to look at an option like cash-for-keys, to profit from the delta,” Istrin said (“delta” being the Greek letter used to represent change).
Buyouts are useful specifically because they are less likely to land you in court — while also breaking rent control, she emphasized.
“When a tenant voluntarily vacates a unit, the unit becomes vacancy decontrolled, meaning the landlord can charge market rate for the unit now,” Istrin said. “That’s not actually the case when you do an eviction through court.”
The webinar was hosted by the Apartment Association of Greater Los Angeles (AAGLA), which represents landlords and property managers. Called “When All Else Fails…There’s Cash 4 Keys!”, it drew a crowd of nearly 200.
Istrin told her audience that her company shields landlords from an unpleasant process. Hire Onyx “if you’re not comfortable doing this on your own”, she said, or if “you need the spotlight with the tenant relocation specialist so that it’s not coming directly from the landlord.”
The Multifamily Forum wrote in 2022 that Onyx has secured at least 2,000 buyouts, “accounting for nearly a quarter of all buyouts in the city” formally registered with the housing department at that time. (Tenant advocates and lawyers say cash-for-keys buyouts are often not reported to the city — and that tenants are frequently forced out of their apartments without taking money at all.)
The money offered to tenants in cash buyouts is usually too little to rent another apartment in the city at market rate, tenants say, so taking a buyout likely means leaving the city, moving into an overcrowded apartment or even becoming homeless.
Shelby Istrin denied harassing tenants, denied targeting immigrants, and denied working with landlords who do either of those things.
“When I consult with my clients in the beginning, I emphasize that they need to stay on top of habitability issues, because if there are habitability issues at the property, that hinders our efforts,” she said in an interview.
“We do client consultation, and if anyone says they’re doing anything unscrupulous in any way, we don’t work with them.”
While pandemic eviction protections were in place, hiring relocators in lieu of filing an eviction was “just the thing to do” in Los Angeles, says tenant lawyer Claudia Medina, who represents Catalina Reyes and her neighbors in an ongoing lawsuit against their landlord. Medina also represented tenants in a federal lawsuit against K3 Holdings, which hired Onyx Relocation too.
Istrin argues that her field is legal. Medina says that even so, it is predicated on removing people from their homes.
At the webinar, when an audience member asked her about “professional tenants” who supposedly collect buyouts for profit, Istrin acknowledged that tenants have emotional connections to their homes and are reluctant to leave.
First Istrin said she does “deal with a lot of butthead tenants who are just out for money.”
“But it’s like, great, we have money,” she added. “That’s what we do have. What I can’t do is the tenants who are like, ‘No, the ju-jus in this apartment, they’re, like, they mean something to me.’ I can’t pick up your ju-jus and bring it somewhere else. But money? Just pay them.”
No Funny Business
Tenant relocation companies have existed for years. They help property owners resettle tenants when they have to perform earthquake retrofits or other major repairs. They often work for governments when they seize and demolish property to build infrastructure, like freeways.
But frequently, relocators help landlords clear buildings of low-income tenants in rent controlled apartments so landlords can replace them with new renters who can pay more, or so they can tear down the building and build luxury condominiums in its place. This grim subset of tenant relocation is sometimes called “retenanting.” As early as 2014, self-described retenanter Nicole Deflorian told NPR that she tries to find old businesses, “kick them out [and] retenant the property with new tenants at market rate.”
Organizers with the Los Angeles Tenants Union say that tenants in rent-controlled units frequently complain that they are being targeted by retenanters. They feel the complaints are increasing in frequency.
In Boyle Heights and MacArthur Park, tenants clashed with Dennis “The Negotiator” Munoz, who runs www.tenantsbuyouts.com. In a 2020 video on the site, Munoz tells a badly shaking camera that he has completed more than 1,000 buyouts, that buyouts are the key to maximizing returns on a property investment and that he is “here to remove your stress of negotiation with tenants.” Munoz did not respond to a request for comment.
Tenants in historic South Central have organized against relocation consultant Gabe Becerra, who spoke openly about clearing their buildings on Instagram. Becerra did not respond to a request for comment.
Tenants at the Yucca Argyle Apartments in Hollywood say they faced a relocation campaign led by Del Richardson, wife of L.A City Councilmember Curren Price, who is charged with corruption for voting on real estate projects of developers that hired his wife as a consultant.
Yucca Argyle’s owners were trying to evict tenants through the Ellis Act to redevelop the property, but the tenant union there won a right to return to the property at their original rent-controlled rates, once it is redeveloped.
Tenant Shauna Johnson says Del Richardson acted like no such agreement existed when she visited her last fall.
“She started asking me if I was interested in a buyout,” Johnson recalls. “I said no, I’m interested in a right of return, and she laughed at me. She said, ‘where did you get that [from]?’”
Del Richardson did not respond to a request for comment.
Tenants of the landlord K3 Holdings say they were targeted by relocators — including from Onyx Relocation — who offered them money to leave their buildings while conditions deteriorated in dozens of rent-controlled properties. Immigrant tenants currently on rent strike at 1057 S Western Avenue say that Jose Yepez, a relocator and former building manager for the company, threatened them with deportation. K3 Holdings has denied harassing tenants.
In Istrin’s webinar, she stressed that Onyx is careful not to violate the city’s Tenant Anti-Harassment Ordinance (TAHO).
“No funny business,” she said, waving a finger at her web camera.
Catalina Reyes and her neighbors said Istrin’s firm offered the buyout carrot while their landlord wielded the harassment stick at 3218 Sunset Boulevard.
A real estate investment firm called RYDA bought the building in November of 2020, and in the fall of 2021, Onyx relocators began offering cash-for-keys buyouts as construction began. In December of 2021, co-owner Ryan Neman posted notices that warned tenants the remodel would likely render the building “uninhabitable for an extended period.” Onyx relocators would help them move to new living situations, additional notices said. They could return to their units if they accepted a rent increase.
Tenants say that Onyx never offered to move them to alternate buildings — they only offered tenants money to leave for good. Istrin’s company stopped working in the building in the summer of 2022 “due to a personal matter,” Istrin said.
On a gray Sunday last spring, the building appeared as uninhabitable as Neman warned it would be.
One of the interior staircases was missing its roof and was exposed to the sky; a light drizzle wetted the carpet. The holes in the walls and ceilings made them look like half-finished jigsaw puzzles. Some gashes revealed electrical wiring. A fluorescent light fixture dangled in a hallway, secured only at one end.
The building swayed back and forth when tenants jumped up and down in the stairwell.
“”I don’t have full control of my client,” Istrin later said when asked about the building. “I don’t have any knowledge of my clients violating laws in specific.”
According to Reyes, Onyx relocators tried to pressure tenants into taking buyouts by telling them there was a limited amount of money for cash-for-keys agreements. So the tenants who signed first would receive the most money and tenants who signed last would get nothing.
“They said, you have to sign, because if you don’t sign you’re going to lose the money,” Reyes recalled. “Everybody is signing but you.”
The buyout paperwork included a non-disclosure agreement, which is common in cash-for-keys paperwork. When tenants take buyouts, they often disappear. Buyouts mute tenants as they displace them.
In a statement, a spokesperson for RYDA said the remodel was necessary to rehabilitate the building and they insisted the remodel was up to code, which tenants dispute. “We strongly deny any allegations of purposefully removing the roof to force tenants to take buyouts, targeting immigrants, or painting over mold,” they wrote.
Tenants in other properties where Onyx Relocation worked made similar allegations.
At the Villa Elaine Apartments in Hollywood, former tenant Arab Batarse said Onyx relocators and building managers cleared the property during a brutal remodel.
“Shelby was saying that we were all going to be forced to leave at one point or another,” Batarse said. A spokesperson for the owner, Slate Property Group, said the company fired Onyx within 90 days “because they did not meet our standards,” but did not elaborate on why. Slate Property denied harassing tenants.
At 132 S. Westmoreland Avenue, a building owned by K3 Holdings, Christina Macias said an Onyx relocator offered her $50,000 to leave while claiming the building would be demolished. Her apartment was riddled with mold, according to pictures she shared. Court records show that K3 Holdings paid Onyx Relocation “approximately $213,300 total for their services.”
Shelby Istrin says her employees never tell tenants their building will be demolished when that isn’t the case. “Our representative knew and conveyed to tenants that the building was scheduled for renovation, not demolition,” she wrote in an email.
“The money you’re offering me is not going to last a year,” Macias told the Onyx relocator.
AAGLA executive director Dan Yukelson, who invited Istrin to conduct her webinar for the landlord group, agrees that buyouts are not enough to rent a new apartment in L.A.
“A good friend of mine, his son was offered a buyout because the owner wanted to do a major remodel,” he said. “He was paying $1,500 or so under market, and when he looked around for a comfortable apartment, they were too expensive. He would have broken even really quickly. It just wasn’t worth it to him.”
A growing field thanks to Costa-Hawkins
The Costa-Hawkins Rental Housing Act, which passed the California state senate by one vote in 1994, allows landlords to raise rents as much as they want after a tenant leaves a rent-controlled unit.
San Francisco City Attorney David Chiu says Costa-Hawkins incentivizes landlords to buy out tenants by any means necessary. Chiu co-authored a repeal of the law as a state assemblymember in 2017, but it failed “amid fierce opposition from landlords,” the Los Angeles Times wrote. Ballot measures in 2018 and 2020 were both defeated after landlord groups spent more than $100 million against them.
“It is very hard to get anything substantive done” for tenants in the state legislature, Chiu says, because the policy is complex, the real estate lobby is powerful, and a large number of lawmakers are landlords themselves.
Next fall, voters have the chance to repeal Costa Hawkins for the third time through a statewide ballot measure, the “Justice for Renters Initiative.” A repeal would also allow cities to expand rent control to properties built after 1995, which Costa Hawkins prohibits.
As long as California landlords can raise rents to market rate when a tenant leaves their unit, Istrin will likely have customers.
At the webinar, Dan Yukelson congratulated Shelby Istrin on a well-attended event.
“This is obviously a hot topic,” he said. “We’re going to have to have you back again.”