Condominiums projects ousting low-income tenants in Los Angeles

Condos conversion, housing shortage and evictions

There is an outbreak of condominium conversions and housing demolitions ripping the hearts and souls of L.A. communities. Los Angeles, already facing one of the worst affordable housing shortages in the nation, is now impacted by « condo-mania, » which is displacing large numbers of renters and destroying scarce affordable housing.

Over the last five years, nearly 13,000 condo and demolition-related evictions occurred, according to the LA Housing Department. Existing buildings are being converted, and apartments are being demolished and replaced by newly built condos.

The condos being created are way beyond the financial reach of most L.A. renters. Tenants faced with eviction can’t find affordable apartments in their current neighborhoods and are being forced out of the area, even out of the state.

Nearly 9,000 rent-control evictions were ordered in the past year and a half alone, and that does not include evictions from non-rent-controlled units, which are not tracked by the city.

It’s another reaction to the high-priced Southern California real estate market, where the median price for a house in Los Angeles Country hit a new high of $506,000 last month and many potential house-hunters turn to condos as a more affordable way to buy.

Some communities will have blocks of buildings emptied to make way for new condo construction.

Renters who have paid $600, $800 or $900 a month now have to find a new home in a market where the average rent tops $1,350 a month.

L.A. has a severe shortage of affordable housing. The rental vacancy rate is under 5%. For more affordable apartments, it’s even lower. The waiting list for affordable housing developments — rental, condo and single-family homes — is long. Rent, on average, exceeds $1,000 a month, and it eats up more than half of many families’ incomes.

Many of the city’s working families — secretaries, bus drivers, nurses, schoolteachers, computer programmers, waiters, cashiers, garment workers, police officers — are priced out of a housing market whose median-priced home is more than $400,000. The poor are forced to double-up and triple-up in slum apartments, paying almost all their incomes for rent — or wind up on the street or in shelters.

The housing shortage puts stress on the city’s social fabric. Families are weakened and neighborhoods undermined. The business climate suffers because employers prefer to invest in cities where their workers can afford to rent an apartment or buy a house. Retailers feel it too when families have little discretionary income to spend after the rent or mortgage is paid.

Constructing new condos, especially when the buildings include market-rate and affordable units, makes sense. Razing affordable rental housing and replacing it with luxury condos, or simply converting apartments to condos, mostly provides a windfall to developers. No net units are added. The costs of existing ones are increased.

Tenants make up over 60% of L.A.‘s residents, and condo conversion is changing the nature of neighborhoods by setting a price for who can live in them. It presents financial and emotional hardship to elderly and low- and moderate-income tenants, most of whom can’t afford to buy their converted apartments. Suddenly, a $700-a-month apartment becomes a $350,000 condo. Those forced out usually relocate to inferior housing and higher rents. And once they resettle, there is no guarantee their new unit will not be sold out from under them.

Actions taken

In July 2006 The National Condo Conversion Conference was held in Los Angeles. Living in a city that has one of the worst affordable housing crises in the nation and condo-mania is running rampant, destroying more and more communities, the condo convention was considered as an affront to the community. These converters only care about making more and more money on the backs of low-income people, on seniors with fixed incomes, and families. Condo conversions and rental demolitions are changing the face of L.A. so we will end up being a city only of the rich and the wealthy, because wages are not keeping pace with rents.

Tenant advocates have called for a moratorium on the conversion of rent-controlled units, but many recognize that freezing development alone would not be enough. The Coalition for Economic Survival (CES) supports a joint approach that incorporates both housing production with housing preservation, otherwise “we are just spinning our wheels.”

CES and other tenants’ rights organizations have mounted a campaign to convince the L.A. City Council to enact a moratorium on condo conversions and housing demolitions while it develops permanent laws to better protect renters and affordable housing. Without concrete government action, the face of Los Angeles will be changed forever. The moratorium is crucial to help ensure that more housing loss and displacement doesn’t happen will sufficient time is provide to study the issue and come up with concrete effective solutions.

There has been a growing number of organizations joining the call for a moratorium. They include every major LA tenants’ rights and affordable housing organization, as well as the Los Angeles County Federation of Labor, Services Employees International Union Local 660, American Federation of State, County and Municipal Employees Council 36, the Democratic Party of the San Fernando Valley City of LA Rent Stabilization Commission and City of LA Affordable Housing Commission.

CES organizes low and moderate income tenants (of privately owned rental housing units including both federally subsidized and non-subsidized units) whose residences are at-risk due to slum conditions including lead hazards), proposed demolitions, proposed renovations, illegal evictions and owners’ desires to opt-out of federally subsidized rental housing programs. With the explosion in the value of real estate in Southern California, the supply and quality of housing that is affordable to low-income people is at tremendous risk.

There is a significant increase in landlord and developer attempts to demolish affordable housing to build luxury units or to substantially renovate existing affordable housing to gain higher rents. The L.A. Unified School District’s plans to build needed new schools are targeting a substantial number of sites where affordable housing now exists. And, the aging housing stock contains toxic hazards, leading to major health problems for residents, including children.

CES educates, trains, supports and empowers tenants to take action to protect their rights, their housing and their lives, and bring tenants living in threatened affordable housing together with tenants in slum and HUD housing to create a powerful voice to preserve and create healthy, safe and decent affordable housing.

The Valley Village Homeowners Residents Association is also calling for a temporary stop to all evictions until the city attorney can close loopholes that allow landlords to evict residents before getting city approval to demolish and develop new condos. That effort was stalled at the Neighborhood Council of Valley Village, after developer Gary Schaffel warned that he and other property owners could lose millions of dollars if demolitions and condo projects are halted.

Proposal for action

The recommendations include information on what other cities have done to preserve affordable rental housing, which experts define as housing for low income people.

San Francisco, for instance, limits conversions to 200 units per year while the Berkeley limit is 100, said Barbara Schultz of the Legal Aid Foundation of Los Angeles.

Santa Monica requires a plan for the replacement of affordable housing before demolition or conversion is approved and does not allow for conversion if the vacancy rate is below 5 percent.

Other cities have addressed this problem. Here are some steps L.A. city government could take to protect tenants and help preserve the inventory of rental housing:

• Require landlords and developers to pay moving expenses and one year’s rent for tenants evicted because of condo conversions. Although this a Band-Aid, it addresses the reality that the rental vacancy rate is so low that many displaced tenants will have difficulty finding an affordable apartment.

• Require landlords, developers and investors to give renters a year’s notice before eviction for condo conversions — with a limit on rent increases during the period.

• Ban all demolitions and condo conversions — or at least all evictions for these purposes — until the rental vacancy rate exceeds 5%.

• Require developers who eliminate rental housing to make at least one-third of the new (or converted) condos affordable to low- and moderate-income households.