HUD Rules Rent Hikes at Complex Are Proper : Lake View Terrace: Tenants protest large increases, but the federal agency says fees at the subsidized project were too low to begin with.
Despite complaints by tenants whose rents have almost doubled in some cases, federal housing officials have determined that the increases at a troubled Lake View Terrace low-income housing complex are proper.
A review has found that rent hikes at the Lake View Terrace Apartments conform to government regulatory guidelines, according to a letter sent to Rep. Howard L. Berman (D-Panorama City) by the head of the U. S. Department of Housing and Urban Development office in Los Angeles. Berman had asked HUD to look into the matter after he received complaints from tenants.
Some tenants at the privately owned, HUD-insured complex had relatively high incomes and low rents compared to other residents of federally subsidized housing, according to HUD’s Los Angeles manager, Charles Ming.
Some were paying rent that only equalled 10% of their income before the increases, he said in the letter sent Friday.
“Many tenants have been in a situation, because of their income and the established rents, where they were paying much less in terms of a percentage of their incomes than other HUD-subsidized residents,” Ming’s letter said.
Many low-income renters in Los Angeles spend more than 50% of their monthly income on rent.
Nonetheless, Berman aide Rose Castaneda said Monday that HUD should consider recalculating the rents because of the hardship that has resulted. Some rents, for example, went up as much as 70%.
“These people are the working poor,” Castaneda said. “It has caused a great deal of hardship.”
The dispute at Lake View Terrace stems from the enactment last year of a regulatory agreement known as a “plan of action,” in which HUD authorized rent increases over a three-year period that would bring rents to 30% of tenant income at the complex. In exchange for the rent increases, refinancing and other HUD incentives, owner Richard Tod Spieker agreed to maintain the complex as low-income housing rather than prepaying his mortgage and putting the property on the market.
Some of this summer’s rent increases were larger than those set by the plan of action because they also reflected increases in residents’ income.
HUD has not yet developed a “single method for handling such situations,” so the new rents comply with present regulations, according to Ming’s letter.
Pamela Brown, a legal aid lawyer working with tenants, said HUD had the discretion to block the income-based rent increases and should have done so.
“If there are no guidelines on that, and these are low-income tenants, you would suppose you would err on the side of creating the least hardship,” Brown said.
Brown and Castaneda said agency officials have said they will create guidelines regulating income-based rent increases at buildings where plans of action permitting rent hikes are being implemented.
“Our concern is that they will use this building as a precedent,” Brown said.
Berman asked HUD in August to look into tenant complaints alleging excessive rents, mismanagement and bribe-taking by employees at the Lake View Terrace Apartments, the scene of ongoing disputes between tenants and management.
Last week, HUD gave Spieker Cos. Inc., the owner-owned management company, an unusually harsh “below average” rating after a review found management and maintenance problems.
HUD also extended Spieker’s temporary managing status until December.
An executive at the management firm criticized the HUD findings as unfair and said the company will appeal.
Federal investigators said they did not find evidence warranting further investigation into alleged bribe-taking by former management employees.
The government designates the approximately 370 tenants at Lake View Terrace Apartments as “very low-income” residents, whose rents are federally subsidized, and low- and moderate-income tenants who do not receive such subsidies.
