Can LA Save Affordable Housing Through Eminent Domain?

L.A. City Councilmember Gil Cedillo addresses an audience of about 100 in the shadow of the Metro @ Chinatown Senior Loft apartment building. (Matt Tinoco/SCPR)

Los Angeles City Council members are considering an aggressive new plan for preserving affordable housing: Taking over apartment buildings using eminent domain.

Councilman Gil Cedillo introduced a motion on Friday to explore the possibility of seizing Hillside Villa, a 124-unit affordable housing development in Chinatown.

The building was constructed more than three decades ago under a covenant to keep rents affordable for 30 years. After that period of time, the property owner would be legally allowed to raise rents to market rate.

The Hillside covenant is set to expire later this year. Tenants have been organizing to keep rents in the building from spiking.

"We are looking at a tsunami of displacement if we don't grab control of the covenants that will expire," Cedillo said.

L.A.'s housing department has estimated that 11,771 units across the city are at risk of converting from affordable to market-rate rents in coming years. Cedillo said he would consider using eminent domain to preserve affordable housing in other buildings.

'PUBLIC MONEY FOR PUBLIC GOOD'

Cities typically use eminent domain to seize private property in order to develop freeways and other projects meant for public use. In the 1950s, L.A. used eminent domain to clear residents out of Chavez Ravine in order to construct Dodger Stadium.

But using eminent domain to preserve affordable housing would be a new approach for the city of Los Angeles.

Annie Shaw with the Chinatown Community for Equitable Development has been one of the organizers working with the Hillside tenants. Her group, along with the Los Angeles Tenants Union, has been pushing for months to get the city to use eminent domain on the property.

"The principle of eminent domain is about using public money for public good," Shaw said. "We are here to support that affordable housing is a public good."

Shaw said the tenants are feeling energized by Cedillo's action. She said they would not be able to afford the going rate for rent in this rapidly changing neighborhood.

"Most folks are facing either homelessness, or they will have to leave a community that they have deep roots in," Shaw said. "Most of the folks at this point are low-income families that have seniors and children who are completely reliant on the infrastructure right around Chinatown."

'CHILLING EFFECT' ON DEVELOPMENT?

Tom Botz, the owner of Hillside Villa, said he would fight any effort to seize his building in court.

"The eminent domain concept would fit better in countries like Cuba or Venezuela," Botz said via email.

"No developer would ever again agree to build low-income housing and operate it for 30 years under strict rent and occupancy restrictions, only to have the city take the building away at the end of the 30 years," he said.

UCLA associate professor of urban planning Michael Lens said this potential use of eminent domain could have a "chilling effect" on the development of new affordable housing.

"The developer entered into a 30-year covenant with the expectation that whomever owned the property at the end of that 30-year period would be free to do whatever made sense to that owner," Lens said via email. "All financial decisions over that 30-year period have been made with that assumption."

If passed, Cedillo's motion would instruct city staffers to report back in 30 days on the possibility of seizing Hillside Villa. The city would have to determine a fair market value to pay the owner for the seized property.

The motion could come up for a vote in the city council housing committee in mid-February.