Rent Hikes Averted in Chinatown Building

In the latest move in a dispute between tenants and the landlord of a Chinatown affordable housing building, First District City Councilman Gil Cedillo is now proposing using eminent domain so that the City of Los Angeles can acquire the embattled property.

In a Jan. 31 motion, Cedillo proposed that the Board of Public Works use eminent domain to buy Hillside Villa from its owner Thomas Botz. The motion, which was referred to the housing committee, calls on the Bureau of Engineering and the Housing and Community Investment Department to report back in 30 days on how viable it is to use eminent domain, if the proposal is approved. It also calls for exploring using eminent domain for other buildings with expiring affordability covenants.

In a prepared statement, Cedillo said that although affordable housing is being constructed, the housing crisis in Los Angeles means that new units are not opening up fast enough and that other options need to be explored.

“With thousands of affordable housing covenants expiring, I am taking this unprecedented action to maintain affordable rents at the Hillside Villa Apartments and may do the same at other buildings in my district,” the statement continued.

Eminent domain is a tool governments can use to acquire private land to be repurposed for public use, with compensation to the owners. It has a mixed history in L.A.; in the 1950s the city used it to acquire the land in Chavez Ravine that became Dodger Stadium. Parker Center, the former headquarters for the Los Angeles Police Department, was also constructed via eminent domain, shrinking much of Little Tokyo.

Hillside Villa, located at 636 N. Hill Pl., was built in 1988 in part with funds from the now-defunct Community Redevelopment Agency, which loaned $5.5 million in exchange for a 30-year affordable housing covenant. That covenant expired in August 2018.

The proposal follows months of disputes between tenants and their allies against Hillside Villa’s landlord. Of the 124 units in the property, 59 low-income spaces faced rent increases that would bring the apartments to market rates. Most other units are occupied by people using Section 8 vouchers.

Cedillo became involved last summer, following community lobbying, and worked to negotiate a deal between the sides. Although the councilman claimed that a tentative deal had been reached, in which, in part, the loan would be forgiven in exchange for no rent hikes for 10 years, Botz denied Cedillo’s assertion and the situation deadlocked. Cedillo’s suggestion of using eminent domain is the first major development in the conflict since the deadlock.

In a phone call with Los Angeles Downtown News, Botz said he is against the move and will fight it, and said the city is trying to change the deal it made 32 years ago.

“We don’t think the city has any legal right for this,” Botz said. “They’re not building a freeway, they’re not building Dodger Stadium. I don’t think they have the money for this.”

He added that if the city did, that money would be better spent on new shelters.

The Hillside Villa Tenants Association and its allies have been pushing for the use of eminent domain, according to Annie Shaw, a member of the Chinatown Community for an Equitable Development, one of the community activist groups backing tenants. She said that tenants and colleagues began seriously looking at eminent domain after the deal collapsed.

“The reason for that is that there have been examples throughout the country that have used eminent domain in different ways, such as in New York City, Seattle and Palo Alto,” Shaw said.

Per Cedillo’s motion, no specific price was given for the acquisition of Hillside Villa. In his statement, Cedillo said that a “fair price” will be offered, and that affordable rents would be maintained for current tenants.

The use of eminent domain is uncommon, according to Gary Painter, a professor at USC’s Price School of Public Policy and an expert in housing markets and community development. He said that that some other cities have tried similar programs, but it is not a widespread practice in municipalities.

“The big question in these kind of deals is: does the city have the budget to participate in these deals, or is this a one-off?” Painter asked. “Is this something the city anticipates allocating much more funds to in the future?”

The fight over Hillside Villa is one of several affordable housing-related conflicts happening across the city. Many, including the case of the Santa Fe Art Colony in the southeast corner of Downtown, are also tied to expiring or expired affordable housing covenants. Painter said that it’s part of the wider issue of affordability in Los Angeles, but added that as more covenants expire more efforts to extend the affordability they provided will spring up.

Currently Cedillo’s motion has been referred to the City Council’s housing committee, but as of press time, a hearing has not been scheduled. That is expected likely in late March, per a spokesperson for the councilman.