LA City Council approves $15M to assist tenants fighting rent hikes in Chinatown apartment

LOS ANGELES - The Los Angeles City Council Friday approved an almost $15 million program to aid Chinatown apartment building tenants who have been fighting rent hikes since 2020.

Council members voted 14-0 in favor of the 10-year deal that will require the city to spend about $15 million to provide subsidies for dozens of units at the property known as the Hillside Villa Apartments, a 124-unit building constructed in 1989. The proposal came out of negotiations between the Los Angeles Housing Department and the landlord, 636 NHP.

Councilwoman Monica Rodriguez was absent during the vote.

As part of the agreement, Councilwoman Eunisses Hernandez, who represents the First District, which includes Chinatown, secured a six-month extension for tenants before a six-year repayment period is set to begin.

"Throughout this process, my goal has always been to ensure that the tenants at Hillside Villa remain housed, and I believe this agreement is critical to achieving that goal," Hernandez said.

Hernandez noted that Hillside Villa is far from an isolated incident, as many other covenants are set to expire in the coming years, posing a threat to the city's affordable housing stock. The councilwoman also introduced a motion aimed at providing emergency rental assistance program for tenants who accrued more than six months of rent debt, specifically as a result of housing covenants expiring.

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"I believe that this is crucial and critical to ensuring the spirit and intent of this agreement is met, and that we keep tenants of Hillside Villa housed," Hernandez said.

More than 20 tenants of Hillside Villa attended Friday's City Council meeting. Prior to the vote, they urged council members to do more for them. Many of them opposed the current deal because it would still allow them to be evicted for failure to pay back rent.

Several tenants also opposed the deal for providing Thomas Botz, the managing member of 636 NHP, an extension on existing loans, totaling $5 million, at 0% and 1% interest.

Tenants urged the council to revise the deal so that their back rent was paid off and no one was at risk of being evicted -- currently 35 of them are facing eviction. According to the tenants, many of the residents are low- income and senior citizens who would be unable to pay back the entirety of their rent-owed.

Following the vote, Hillside Villa residents showed their frustration and denounced the deal, disrupting the meeting briefly before being escorted out of the Council Chamber by Los Angeles Police Department officers.

Hillside Villa Apartments was built using funds from the Community Redevelopment Agency of the City of Los Angeles, and the city, with a 30-year covenant restricting the units to affordable rents.

The covenant expired in 2019, and notices were given to tenants that rents would be increased to market value. According to tenants, they've faced rent hikes up to 300%.

Of the 124 units, 106 are covered by the deal with the city, and the building has 68 units designated for low-income households, using Section 8 rental vouchers to help those tenants pay rent.

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The property owner has refused to sell the building to the city, noting that redevelopment of the site will be an opportunity when the building ages, according to Ann Sewill, the housing department's general manager. The building was developed in a zone that would allow for double the number of units.

"In lieu of a purchase and sale agreement, LAHD and the owner have negotiated a new covenant agreement that extends the affordable rent term for 15 years and two months, provides a longer repayment term for tenants that owe back rent for the period between 2019 and 2024, and gives the city a first right of refusal to purchase the site if the owner decides to sell any time before February 2037," according to city documents.

Residents have called on city leaders to use eminent domain to acquire the building. Sewill said that would not be feasible as it would cost the city $800,000 per unit based on current interest rates, operating costs and efforts to rehabilitate the building.

The deal was approved by the council's Housing and Homelessness Committee Wednesday.