Moratorium’s Effect: 2 Pico Home Sellers Face Disaster

Maria Ascencio answered the front door of her Pico-Fairfax home with a crumpled Kleenex in her hand.

“I’ve been crying,” she said, with a sad smile. “I’m sick and I’m worried.”

As Ascencio sees it, she has everything to lose by a temporary moratorium on issuing demolition and building permits in the neighborhood where she has long lived. She said she is worried about impending financial ruin because the ban has jeopardized the nearly culminated sale of her modest house to a developer.

A week before the escrow closing date, the developer, Kenneth Bank, has threatened to renege on the deal if he cannot immediately go forward with plans to tear down Ascencio’s house and put up an apartment building.

Measure Approved

The Los Angeles City Council approved the emergency measure Tuesday without discussion by a 12-0 vote. Moments later in a City Hall corridor, Bank said he could not comment on whether he was bailing out. Earlier, he had predicted that, if passed, the moratorium would reverberate through a city enmeshed in a growth-slow growth tug of war.

A distraught Ascencio sat in Councilman Nate Holden’s office suite threatening to kill herself if her house sale didn’t go thorugh, Holden deputy Louis White said.

The moratorium is the first ban on building approved by the council in about two years. The city Planning Commission during that time has opposed moratoriums as an “inappropriate way of doing land use planning,” said commission President William Luddy. In certain forms, they have also been deemed illegal by the courts.

A week after it was first raised in the City Council, the matter was back with the Planning Commission’s OK, breakneck speed for such an action to be taken.

Holden asked for the moratorium as stop-gap measure until an interim growth control measure can be enacted. Holden’s 10th District encompasses the Pico-Fairfax neighborhood.

To avoid stalling the measure, Commissioner Theodore Stein yielded to Holden’s request to change his vote, breaking a tie.

Sought by Homeowners

The moratorium was sought by homeowners who banded together to stop a developers’ run on their racially integrated neighborhood of single-family homes, interspersed on some blocks with apartments. Their neighborhood is south of Pico Boulevard between Fairfax Avenue and La Cienega Boulevard. The ban also applies to another small patch of the 10th council district near Wilshire and Crenshaw.

More than 100 Pico-Fairfax homeowners burst into applause in the Council Chambers when the measure passed. It requires Mayor Tom Bradley’s signature.

While the group exulted in their victory, Ascencio and next-door-neighbor, Michael Schwieger, who sold his house in a package deal with Ascencio, contemplated financial ruin.

At about the same time as the Pico-Fairfax Good Neighbors Assn. was being formed, Ascencio and Schwieger sold their property to Bank.

“We’ve got the right to sell,” said Ascencio, a former nurse, who has been a housekeeper for the last 12 years. She said her plan was to buy less expensive quarters, eliminate mortgage payments and pay off her car in preparation for retirement in a few years.

She and Schwieger said it is unfair, and financially disastrous, to them to suddenly change the law, while they are in mid-transaction. “If I had known what was going to happen six months ago, I would have never sold my home,” Schwieger said.

New Homes Purchased

During escrow, both have purchased new homes. In Ascencio’s case, she has been threatened with a lawsuit because she cannot follow through on a contract to buy her new house. Ascencio and Schwieger can in turn sue the developer for breach of contract; however, that doesn’t offer much immediate relief.

As she pads through her two-bedroom home in pink, fluffy slippers, Ascencio apologizes for the obstacle course of packed boxes, ready for the move that may not materialize. The developer has advanced her $3,000 and she has committed herself to purchases to refurbish the house she bought, just east of La Cienega Boulevard and south of Rodeo Road. “I already went way too far,” she said.

Schwieger, a carpenter and tiler who restores old homes, is in even deeper. He took out a temporary loan for a house he has gutted and restored, assuming that he could repay the loan once the sale of his old home was completed. He has removed light fixtures, the dishwasher and other items from his old home. Last weekend, Schwieger had an “estate sale” of antiques to raise one month’s loan payment on his new house, about 10 blocks away.

Since his two pieces of property are cross-collateralized, Schwieger said he could lose them both if the sale doesn’t go through because he cannot afford the mortgage payments.

Schwieger is a development booster who said apartment buildings with rents in the $1,000 a month range will revitalize the neighborhood and give local business owners a boost.

After the council meeting, homeowner James Moody countered, “It brings more drugs. It brings more thugs too.”

Charges of Jealousy

In the hall outside the council chamber, Schwieger confronted leaders of the homeowner group, charging them with greed and jealousy because they had considered selling but wanted more for their property than developers were willing to pay.

Association President Terry Steinhart said he, and others in the group, are motivated by their wish to stay in a desirable neighborhood they can afford. “You’re doing what you think is best for you and I’m doing what I think is right for me,” Steinhart told Schwieger.

“He took a calculated risk, “ Steinhart said later. “He should only be mad at himself and the developer.” He pointed out that Ascencio and Schwieger could sell their homes to private parties.

Legally, the matter is far from settled. After the council vote Tuesday, an attorney for another affected developer branded the moratorium illegal because property owners did not receive sufficient warning and had no meaningful opportunity to be heard.

“The moratorium itself is terribly flawed legally,” said Benjamin Reznik. “It amounts to basically a taking of property without compensation.”

Reznik represents developer Michael Stern, who, after obtaining the proper permits, razed a single-family home and excavated for an apartment house.

The demolition further galvanized homeowners who feared that by the time an interim development control ordinance could be passed, about four months from now, the damage would be done. Reznik outlined his concerns in a letter to City Atty. James K. Hahn. The city attorney’s office has not approved the legality of the ordinance.

Although the ban is for all building permits, the ordinance gives the City Council power to grant hardship exemptions, perhaps for a homeowner who wants to add a new room, said City Planner Gabriel Robles.

Schwieger said he and his neighbor should qualify too. “They should let people already involved in transactions, finish them,” he said.