WEIGHING THE FUTURE OF Jordan Downs : Private Developers Interested but Wary
Private developers of low-income housing expressed interest Thursday in obtaining the troubled Jordan Downs public housing project in Watts, but only if they are given the latitude to impose strict leasing conditions on its poor, mostly welfare-dependent tenants.
Most developers contacted by a reporter applauded a plan by the Los Angeles City Housing Authority to sell Jordan Downs at fair market value to a private firm. Under the proposal, the buyer would be required to make $14 million in improvements, maintain the units and, at least initially, rent them to the same occupants who are there now.
“It’s not easy, but if there is money in it people will do it,” said Jona Goldrich, president of Goldrich & Kest, a Culver City company that has built 20,000 government-subsidized apartment units in California. “If the Housing Authority tells me you have to take back gangs and you have to take back guys who have a record of being delinquent in rent, I would not take the deal.”
The executive director of the Housing Authority, Leila Gonzalez-Correa, said she does not intend to “tie the hands” of a private partner.
“We need to tighten up the procedure whereby drug dealers and people who don’t pay rent can be evicted,” Gonzalez-Correa said Thursday. “I have always felt there are 9,500 good, low-income families in Los Angeles who will make these communities a good place to live. We have a small percentage of people who shouldn’t be there now. Well, they won’t be there after we are through.”
A public hearing is scheduled for 4:30 p.m. at Jordan Downs today to introduce the proposal to tenants. Many of the residents fear that they will lose their homes once Jordan Downs is turned over to a private developer.
Goldrich said he has advocated for years that government bureaucracies should not be in the business of managing low-income housing projects. He said his company would assess the Jordan Downs proposal when it is formally released by the Housing Authority.
At least two other Los Angeles-area firms, Saben Investment Inc. and United Diversified Resources, contacted city officials to indicate their desire to participate in the privatization plan after it was reported in The Times on Thursday, Housing Authority sources said. Another company, Oschin Associates, has held previous talks with the Housing Authority about obtaining public housing projects.
“We feel we can do a better job than the city can in many cases,” said Samuel Oschin, head of the Santa Monica development firm. “We are not burdened with problems that large government agencies have. We logically can move much quicker than they can.”
But millionaire Beverly Hills developer Nathan Shapell, citing the complications of relocating tenants and moving them back to Jordan Downs, said he wants no part of the deal.
“We have never done it,” said Shapell, a strong advocate for the homeless who has constructed several thousand low-income units in Los Angeles. “We are busy doing other projects. I don’t think that we have even the capabilities because you are going to have complaints and you are going to have to deal with children. It’s not our cup of tea.”
Decaying Housing Project
The primary stumbling block, most developers agree, is determining how to provide a safe, clean living environment at a decaying housing project that for years has been overrun by slum conditions, gang violence and drug dealing.
The proposal envisions refurbishing all 700 units at Jordan Downs, enclosing the project with security fencing and providing on-site social services. But these improvements will not be enough, warn developers of low-income housing.
Goldrich, who built and operates the 183-unit Wilmington Arms low-income housing complex in Compton, said that a landlord would have to pay security costs as much as seven times above normal to operate Jordan Downs.
“We would need government and police cooperation in a project like that in order to manage it,” Goldrich said. “The response has to be fast because you are dealing with narcotics and gangs. . . . The Housing Authority uses their own police. When someone falls asleep on the job, they can’t fire them. We try to hire ex-policemen as our security guards and pay them top dollar to discourage the gangs.”
Developers question whether the financial incentive will be great enough to lure private enterprise into the public housing project.
“My interest would be can I make money, increase my portfolio for low-income housing and get tax credits,” Goldrich said.
Developers said that recent federal legislation could provide as much as $400,000 in tax credits each year on a purchase price of $10 million, the approximate property value estimated by the Housing Authority.
Other economic incentives may be available through city and county economic improvement plans that together would place more than eight square miles of the Watts, Willowbrook and Florence areas in redevelopment zones by 1991.
“I think the South-Central area could be one of the last bastions of redevelopment opportunity as it was classically envisioned years ago,” said David N. Lund, executive director of the county Community Development Commission. “Our whole focus is going to be on creating jobs and single-family home ownership opportunities. If there is somehow a reciprocal way to package a public housing project, sure, why not? I don’t see it yet.”
So far, hundreds of millions of dollars in property taxes have been poured into downtown, Hollywood and other redevelopment areas, but only a fraction of the funds have gone to Watts.
Although Watts is among the most severely poor areas of the city--with a median household income of only $11,427 compared to the citywide household median of more than $36,000--it was shunned by most banks and corporations and largely ignored by the City Council in the decades-long effort to redevelop blighted areas of Los Angeles.
