Rent Hikes Averted in Chinatown Building

Residents of a low-income building in Chinatown are getting a reprieve from the threat of skyrocketing rents following the involvement of the local City Council office.

Last month, the office of First District City Councilman Gil Cedillo and the Legal Aid Foundation of Los Angeles announced that preliminary terms had been agreed to on a deal to avoid rent hikes and possible evictions for 59 residents of Hillside Villa. The project at 636 N. Hill Place opened in 1988 and, as part of its initial agreement, could have begun charging market rates last summer. The city and owner Thomas Botz are working on a deal that could keep the units dedicated to low-income tenants for another decade (the deal does not include additional apartments in the building that are largely occupied by people who have Section 8 housing vouchers to subsidize their rent, according to the Legal Aid Foundation).

The deal is being finalized, but the landowner has walked back proposed rent hikes of up to 90%, and eviction notices sent to some tenants on June 1 have been rescinded. Brandon Dimond, an attorney representing Botz, said the property owner has guaranteed to extend the current rates for a full year.

“Rents will remain stable, only going up on July 31, 2020,” Dimond told Los Angeles Downtown News.

The four-story Hillside Villa was built using funding from the now-defunct Community Redevelopment Agency. As with many projects funded by the CRA, it was required to serve as low-income housing for a set period, in this case 30 years, after which the landlord would be free to charge market rates. That period ended in August 2018.

While that three-decade timeline may have seemed on the distant horizon when the CRA and the developer agreed on the original covenant, the deal expired at a time when Los Angeles is experiencing a crisis in affordable housing and homelessness. Supply has not kept up with demand, and as rents have risen throughout the region, homelessness has spiked. Local elected officials have said the county has a low-income housing shortage of more than 500,000 units.

That scenario posed additional challenges for residents of Hillside Villa. After notices detailing steep rent hikes were sent to tenants, residents organized and protested. Cedillo’s office stepped in to help negotiate, and in May the councilman introduced a motion calling for preserving affordable housing covenants, citing Hillside Villa by name.

Cedillo has also introduced a motion calling for restructuring the loan that funded Hillside Villa to extend the affordability covenant by a decade, and to identify further resources that could offer assistance to renters. The City Council was scheduled to vote on it on Friday, Aug. 2 (after Los Angeles Downtown News went to press).

“Los Angeles is seeing the worst housing crisis to date,” Cedillo said in a statement. “This deal ensures that the most vulnerable residents in my district get to stay in their homes.”

The current negotiations have eased tensions on all sides. The Legal Aid Foundation halted a lawsuit that was filed after eviction notices were sent.

The building’s tenants were involved in the negotiations, according to Jonathan Jager, a staff attorney with the Legal Aid Foundation. He said that the agreement also calls for adding a good cause eviction requirement to protect tenants.

Rene AlexZander, president of the Hillside Villa Tenants Association, put the situation in the context of rents that are rising in Chinatown and other communities.

“Our victory is a large victory for us, but it is also a very small victory for the thousands of people who are facing illegal evictions and displacement through gentrification,” AlexZander said in a prepared statement. “The Hillside Villa Tenants Association is committed to taking our experiences and joining forces with other tenants throughout the city, fighting against the injustices of unethical landlords.”

This is not the first time Cedillo has stepped in to help preserve low-income housing in Chinatown. Last August, his office executed an agreement to forestall an 8% rent hike at the Metro Lofts in Chinatown, an affordable housing project on Spring Street for seniors. In that case, developer Atlas Capital, which is working on projects in the neighborhood, agreed to cover the increases imposed by the landlord.

If the City Council approves the current motion, the City Attorney’s office and the Los Angeles Housing and Community Investment Department will finalize the agreement with the tenants and the landlord. That is expected to happen by the end of the fall.