Don’t Sell Jordan Downs to a Developer

Only in government do incompetents have the audacity to feel that they should be rewarded.

A few weeks ago the L.A. Housing Authority announced that it had so mismanaged and neglected the run-down 700-unit Jordan Downs Housing Project in South-Central Los Angeles that the only solution would be to turn it over to a “private developer.” The agency said that only a “private developer” would be able to repair the project and maintain it at a minimal level of habitability.

A close inspection of the few details that have been revealed shows that this is a bad deal for the public. The city would turn over to a private developer, at market value, the 40-acre parcel bordering the soon-to-be-completed Century Freeway. Of that 40 acres, 85% is undeveloped. If the Century Freeway and the expanded Watts Redevelopment Project are successful, the land could greatly increase in value. And the private owners would be free to do whatever they wished with the undeveloped land.

As for the housing project, the new owners would have to commit to repairing the properties at an estimated cost of up to $14 million. But in return, the developer would receive a huge government subsidy. Seven hundred Section 8 certificates would be supplied to the developer by the federal Department of Housing and Urban Development and the city Housing Authority. These certificates would provide a government-guaranteed income stream of well over $420,000 a month. It is also estimated that the developer could receive as much as $1.6 million a year in federal tax credits.

So the developer could make millions off the deal. But what about the public? The public loses a vital low-income housing resource. In city hands, these units would remain in the pool of low-income housing forever. In private hands, they would be low income only so long as federal subsidies to the developer require it. Currently, this is estimated at from 5 to 15 years.

The tenants, as always, are between a rock and a hard place. If they reject the plan, the Housing Authority remains their landlord. This is the same landlord who intentionally ignored their pleas of the last decade to repair Jordan Downs, allowing it to become the terrible place that it is. But if the tenants should accept the new private developer in return for some short-term repairs, they would be confronted with a landlord whose only goal is profit. As a result, many of the poorest and most needy would soon have no place to live.

Goldrich & Kest, a large developer prominently mentioned as the potential owner of the project, gave a hint to the tenants as to what to expect. “No way,” said a spokesman, “would they allow tenants to remain if they had been delinquent in rent.” Yet this is a project in which all of the families are poor. Making ends meet is a daily struggle. Working with tenants in financial difficulty is one of the challenges of public housing. But private landlords have no time for these daily dilemmas. Thus lost welfare checks or other financial crises will cause those families to be put out on the street, expanding the numbers of the homeless, adding to the government shelter cost.

Will the Housing Authority protect its former tenants’ interests? When asked, its director said that she did not intend to “tie the hands” of the private developer. Similarly, the City Council has shown little interest in the issue.

Yet there are alternatives. Money for repairs could be borrowed from Redevelopment Agency funds. Or the Housing Authority could set up a nonprofit corporation, or work with existing nonprofits, which could take advantage of the same subsidies as the private for-profit developer. Better yet, the Housing Authority could explore selling the units to the tenants themselves who, in partnership with nonprofit housing developers, could take advantage of the same subsidies to rehabilitate, repair and manage their property.

All of these alternatives would preserve the units as low-income housing. However, these alternatives take time for study in a cooperative and respectful environment. None of them can be accomplished in the reactive, crisis-like atmosphere generated by the Housing Authority’s inept handling of the present proposal. The tenants have asked Mayor Tom Bradley to grant them a year’s delay to develop a proposal that will work. The tenants have also requested technical assistance to be serious participants in the process. Assemblywoman Maxine Waters (D-Los Angeles), whose district includes the project, has already requested a similar delay.

By granting the tenants’ request, the mayor could help change the atmosphere from one of confrontation to cooperation. By working with the tenants, he could create the possibility of innovative solutions. By questioning the present proposal, he would send a strong signal to the public that government incompetence should not be rewarded.