Negotiations between Los Angeles City Councilmember Gil Cedillo and the owner of a Chinatown apartment complex to keep tenants in their homes—without rent increases—are breaking down.
About 20 residents of the Hillside Villa apartment building, advocates from Chinatown Community for Equitable Development, and representative of the Los Angeles Tenants Union met Friday on the steps of City Hall to announce that tenants had received notices in July from the building’s owner that a 5.5 percent rent increase would take effect September 1.
Such an increase “would be clearly in breach of our agreement,” Cedillo said in a statement.
He said the deal—the entirety of which has not been made public—would forgive the loan that was used to build the apartments in exchange no displacement, no evictions, and no rent increases for 10 years. (It’s unclear how much of the $5.4 million loan is still outstanding).
But building owner Thomas Botz says the agreement is still very much a work in progress and that it was “very misleading to the tenants” to announce a deal. Botz says that Cedillo made a “very generous offer” to keep the building affordable, but “there is probably no deal.”
On July 3, Cedillo issued a press release saying he had reached a tentative agreement with Botz.
Cedillo’s move to make a deal was precipitated by the expiration of the affordability covenants on Hillside Villa, which opened in 1988 as affordable housing. The covenants had kept rents on the building’s 124 units low for decades, but last year, it expired, allowing Botz to charge market-rates for the units.
Botz says that due to a technical error he made in giving notice to the tenants about the expiration of the covenants, he had to give them one more year before he can raise the rents to market rate. That notice was delivered to tenants “a few days ago,” Botz says.
“Some tenants have benefited for 32 years,” Botz says, and now they have another year to find new accommodations. Botz says that the rent increase is within the amount he is allowed to raise rents on these units. On September 1, 2020, he plans to begin to charge market rates on the units.
Many affordable complexes countywide are in a similar position. Between 1997 and 2018, the expiration of affordability covenants led to the conversion of more than 5,000 affordable apartments into market-rate units across Los Angeles County, according to a report from the California Housing Partnership.
The Hillside Villa apartments were slated to add to that statistic.
Earlier this year, Botz sent notices to tenants of rent increases that amounted to, in some cases, roughly three times their current rates. The original increases were slated to take effect in June, but Cedillo got involved and, in July, announced a deal had been reached with Botz that would keep Hillside Villa residents in their homes at current rents.
It’s “absolutely unacceptable” that the deal that was hammered out is now being “reneged” on, Cedillo told the full City Council on Friday.
“People are expected to bargain in good faith and if they act in bad faith, we expect the city [and] the city attorney... to do all that we can on behalf of these tenants specifically and all tenants in the city of LA,” Cedillo said.
Conrado Terrazas, communications director for Cedillo, said specific next steps have not been laid out yet, but if Botz does raise the rents, “legal action is a possibility.”
This has been a long saga for the tenants of the Hillside Villa.
“I’m tired—we are all tired,” said Rosa Hernandez, an eight-year tenant of the building. “I feel like it’s enough. Give us our home back,” she said.
Comments
Cedillo said that the deal that he negotiated with building owner Thomas Botz would forgive the $5.4 million city loan that was used to build the apartments in exchange no displacement, no evictions, and no rent increases for 10 years. (It’s unclear how much of that loan is still outstanding). Does Curbed LA care to elaborate on this? Or provide any actual information on how the "deal" was memorialized and when it went into effect and its exact terms?
By LADude on 09.03.19 10:47am
Doesn’t the article say that Hillside Villa was built in 1988? So, the loan was used to build the apartments in 1988.
By Ivan III on 09.03.19 11:24am
Correct. And then the article says that the "deal" that was reached would forgive the loan (i.e. there is zero dollars remaining). And then the article says it is unclear how much of the loan is still outstanding. Those two statements are contradictory.
By LADude on 09.03.19 1:07pm
I thought the last article about this said there was about $1 million left on the loan but I’m too lazy to go back and look.
By CaliSon on 09.03.19 2:47pm
The "deal" was this:
By Ivan III on 09.03.19 3:17pm
Actually, the "deal" was finalized.
YOU’ll pay more in taxes to the city.
By Ivan III on 09.03.19 3:43pm
That’s good value for the city. Keeps existing tenants in existing affordable housing. That’s way cheaper than building new affordable housing or dealing with more homelessness.
By Greyvagabond on 09.03.19 3:50pm
Don’t worry, there will never be a shortage of people looking for good apartments paid by the taxpayer.
The mayor even travels to the border looking for new clients.
By Ivan III on 09.03.19 5:31pm
New Affordable Housing lasts for 55 years. This is only 10 years.
Plus letting this lapse doesnt destroy the units, they just go to market rate, but they still house someone.
By RXBXUXNX on 09.03.19 9:02pm
I don’t follow your logic. Someone will still rent a 3 bedroom at $2,500, and the people living there now will just move 30 minutes east and still have housing. The narrative that raising rent causes people to become homeless is bs. None of these people are going to be homeless.
By LADude on 09.04.19 11:17am
The idea is that we are trying to avoid huge displacements of people due to the ending of affordability covenants and rapidly increasing rents. The thing the plan is trying to avoid is entirely families, who have lived there for decades, moving "30 minutes west," which is completely disruptive to their lives.
It is a perfectly valid point to say "tough titties, you got cheap rent for decades, not our problem any more." But the whole GOAL behind affordable housing is to allow the people who live here now to stay. If that means subsidizing their rent in an existing building, that just might be a cheap way to do it.
By Greyvagabond on 09.05.19 10:43am
"entirely families, who have lived there for decades, moving "30 minutes west," which is completely disruptive to their lives."
I mean, the flip side of this coin is entire families (which means multiple wage earners), enjoying decades of huge cost of living subsidies at somebody else’s expense, yet still not saving up or making any plans for the very obvious and planned expiration of their subsidy now crying that the system isn’t "fair." When is enough enough? Give any of us decades of subsidies to the tune of thousands of dollars per year, we’ll make quite a bit of it!
By disqusted on 09.06.19 7:48pm
Right? If it’s a city loan on the books, shouldn’t it be available upon request?
This article reads like it’s simply a regurgitated press release from Cedillo’s office and/or one of the bogus "tenants rights" organizations that constantly runs around providing bad legal advice without being licensed attorneys, to the ultimate detriment of the tenants.
By disqusted on 09.03.19 1:54pm
". The covenant had kept rents on the building’s 124 units low for decades, but last year, it expired, allowing Botz to charge market-rates for the units."
seems like these tenants were get a deal of a lifetime for several years…
and now they’re bitching and complaining that the OWNER of the building wants market value…
WOW what a concept…how selfish of the owner.
By stevenopoly on 09.03.19 11:21am
And Cedillo helped cut a sweetheart deal whereby the City (and its taxpayers) don’t get paid the outstanding loan balance just so the same small group of lucky renters could continue to enjoy a windfall – this time coming at taxpayers’ expense.
By MyrnaMinkoff on 09.03.19 2:41pm
From the last article on here, one renter was renting a three-bedroom and, "the family was notified last year that the price of the unit would nearly triple, from $850 to $2,450 per month." $850 per month for a 3 bedroom. The landlord was subsidizing their lifestyle by tens of thousands of dollars per year. And how can the landlord even break-even with that little rent.
By LADude on 09.03.19 3:17pm
Yep. Landlord is in the right here.
By Constituents on 09.04.19 2:40am
love the entitlement mentality of these pieces of shit… "give us our home back!".
i’d love to hire a vehicle at sixt for a week, then demand i get to keep "my car" indefinitely (for free of course).
fucking scumbags.
By Poofer Puncher on 09.05.19 12:00am
If the City actually gave a shit about keeping this building as affordable housing, they would have done somebody BEFORE the covenant ran out.
Like, say, BUY IT. For market rate. Because that’s what the building is, now.
By Greyvagabond on 09.03.19 11:41am
The city could be offering to buy up apartment buildings all over the place and re-dedicating them as affordable housing, rather than all of these boondoggles that have yet to come online from the recently passed affordable/supportive housing bond measures. But existing apartment buildings don’t have ribbon cutting ceremonies or the potential for giveaways to campaign contributors…
By disqusted on 09.03.19 1:52pm
Yeah it really isn’t that hard. Buy buildings (or even individual units in buildings!) Hire a property management company. Use existing manpower and expertise from the RSO offices to help find people affordable housing if they lose a former rent-stabilized unit.
By Greyvagabond on 09.03.19 2:03pm
You forgot about the tax payers subsidizing the deficiency between the low rent prices and cost of operating those buildings.
By LADude on 09.03.19 3:18pm
Yes, also known as "public housing."
By Greyvagabond on 09.03.19 3:50pm
Because that worked so well in the past
By LAwastheplace on 09.03.19 6:58pm
It did actually.
By Partymuscles on 09.04.19 8:05am