A House Divided : Near-Ideal Conditions Have Helped Many Inner-City Residents Buy Homes, but Affordable Shelter Still Eludes Thousands

Housing in Central Los Angeles is a tale of two cities.

For many residents, the American Dream has become a reality. Taking advantage of low interest rates, relaxed credit requirements and special mortgage programs for minority neighborhoods, they have joined the ranks of homeowners from Lincoln Heights to Ladera Heights.

On the other side are tens of thousands of renters, many of whom struggle month to month to keep a roof over their heads and can only dream of owning a home. The more impoverished typically spend three-fourths of their income to live in crowded and sometimes dangerous, unsanitary conditions.

“We’re looking at a city that is becoming dichotomous in terms of housing,” said Sam Luna, head of the Los Angeles Housing Department’s Neighborhood Recovery Program, which targets poor areas for housing rehabilitation and construction. “A lot of the problem is because people can’t find affordable units.”

In areas such as South Los Angeles, the plight of the poor was exacerbated over the last decade by an exploding population, which grew seven times faster than the number of new housing units. Complicating the problem, experts say, is that wages and welfare entitlements have failed to keep up with rising rents during the same span.

To help bridge the gap, community-based organizations across the central city have emerged as the key players in building or refurbishing affordable, clean apartments that offer an alternative to often squalid public housing and absentee-owner tenements. But experts say the results of those efforts will be a long time coming, since projects can take several years to plan and finance.

The problems, failures and successes of the housing situation in Central Los Angeles are represented by four families visited by City Times. These are their stories:

Cold Reality

For the Mendoza family, even a crowded tenement would be a welcome change.

The seven family members live illegally in the tiny storage room of a storefront evangelical church, which they asked not be identified for fear of being evicted by city officials. There is no plumbing, heating or electricity. A fluorescent lamp tapped into one of the church’s outlets provides the only light.

Carlos Mendoza, 31, and his wife, Maria, 30, sleep on the floor with their four oldest children, ages 3 to 11. A tattered rug is the only padding between them and the cold concrete. Baby Elvis, a 9-month-old boy with big brown eyes, sleeps in a cardboard box that serves as his crib.

At night, the children and their parents snuggle under a blanket to stay warm in the roughly 10-by-10-foot room. When the temperature drops so much that the blankets prove inadequate, the children sneak into the church and sleep on the thinly padded pews. The family uses a sink and toilet in the church but must bathe at a friend’s apartment.

“I feel very bad that we live like this, but we have no choice,” said Carlos Mendoza, who attends adult classes for five hours during the day before going to his night job as a maintenance worker at a major hospital in Central Los Angeles. “We can’t afford anything else.”

Mendoza takes home about $800 a month, which is quickly gone. He pays $200 to the church for the room. And with no cooking facilities, the family spends $400 a month on junk food and prepackaged meals. Most of the rest is spent for items such as diapers and gasoline for Mendoza’s run-down Toyota.

A proud man, Mendoza refuses to accept public assistance, saying he has “two arms and two legs and can work.”

The family has lived in their cramped quarters for the past year. Before that, they had a studio apartment. But they were evicted because they could no longer pay the rent after Mendoza’s sister, who lived with them and contributed to the rent, returned to Nicaragua.

“At least we don’t live under a freeway,” said Mendoza, who fled war-torn Nicaragua in 1984 in search of a better life.

Experts say the Mendozas’ situation underscores the plight of the city’s poor. Unable to afford a first and last months’ rent, many live on the streets or have doubled up with other families in small apartments. In Central Los Angeles, the number of severely overcrowded units--more than seven people in a two-bedroom apartment--nearly doubled, from 70,103 to 139,221 between 1980 and 1990, according to the city Housing Department. And more than 30,000 families citywide live in garages or storage rooms, a department study found.

“We have a complete subgroup of our population that is living in disaster,” said Tanya Tull, executive director of Beyond Shelter, a Mid-Wilshire-based organization that finds housing for the homeless. The nonprofit group is working to find the Mendoza family a decent home, but the wait is long, and social workers say the shelters are full.

Back at the church, as baby Elvis munched a hot dog for breakfast, Carlos Mendoza talked of his dreams: receiving a high school diploma, enrolling at East Los Angeles College, becoming an architect and--most important--providing a nice home for his children.

“I want to study and make something of my life,” he said. “I want to be able to provide a nice place for my family and pay for my children’s education.”

A Decent Place

For six years, Sarita Brewster tried in vain to find a decent apartment. For six years, the 30-year-old single mother of five was given the same answer: She had too many children.

So she was forced to share a small two-bedroom flat with her mother. The apartment was overrun with cockroaches, Brewster recalled, and the neighborhood near Adams Boulevard and Western Avenue in South-Central was plagued with crime.

“It was terrible, but it was the cheapest place we could find with five kids,” said Brewster, who recently lost her job as a shipping clerk when her Downtown sportswear company went out of business. She and her children survive on unemployment benefits.

For the Brewster family, salvation came in the form of Casa Esperanza, a 10-unit apartment complex near 26th Street and Maple Avenue in South-Central. It was was built last year by the nonprofit Esperanza Community Housing Corp. and the Los Angeles Community Design Center, which develops affordable housing.

Unlike most of Los Angeles’ apartments, which city housing officials say have two bedrooms, Casa Esperanza was built as an affordable alternative for large families. Brewster’s unit has four bedrooms and 2 1/2 baths. She pays $352 a month for rent, compared to $783 at her old two-bedroom, single-bath apartment. The Brewsters and the other nine families in the unit were selected on a first-come, first-served basis from 200 applicants.

The rents are lower because nonprofit organizations can qualify for low-income loans and grants, which keep down development and operating costs, city officials say. Tenants at Casa Esperanza make $10,000 to $15,000 a year, but pay only about 30% of their income for rent--a stark contrast to the percentage paid by most of the city’s poor.

In Los Angeles, a typical poor family--defined as a family of four with an income of not more than $13,400 a year--spends 77% of its income on rent, according to a 1991 study by the Washington-based Center on Budget and Policy Priorities. That percentage was the highest in the nation.

The Housing Department’s Luna and others say that nonprofit community-based organizations have emerged as key players in building affordable housing. Of 41 major apartment construction and refurbishing projects funded by the Housing Department citywide since July, 1990, 28 have been developed by nonprofit organizations, according to the department’s records. Five others were joint ventures by nonprofit and for-profit developers.

Many nonprofit developers are offshoots of activist organizations that not only understand neighborhood needs, Luna and others say, but are committed to staying in the area. Nonprofit groups are also given preference by state officials who allocate federal tax credits to developers building affordable housing.

“It’s having that long-term commitment and being in the community that is important,” said Melanie Stephens, project director for Esperanza Housing. The organization was born in 1989 out of a three-year community battle led by St. Vincent Church to stop a garment factory from being built at a site where Esperanza is developing a 33-unit apartment complex.

She said the organization hopes that Casa Esperanza and Villa Esperanza, the nearby 33-unit development expected to be completed next year, will become beacons for neighborhood revitalization. Villa Esperanza will include day care and adult education centers that will be open to and staffed by area residents.

Though 10-unit and 33-unit developments may seem like a drop in the bucket compared to the need, they can make a difference over the long run, said Dowell Myers, an associate professor with USC’s School of Urban and Regional Planning. Myers, who has authored several books and studies on affordable housing in Los Angeles, said: “This problem has developed over a decade and a half, and it will take time to fully reverse it.”

As for Brewster, she is elated to be in her new apartment. There is a grassy area with a barbecue grill in the back; the front yard is filled with rose bushes, and the area, Brewster said, is less crime-ridden. Her 11-year-old daughter, Desree, finally has her own room.

“It’s so nice,” said Brewster, showing off her bedroom and adjacent private bathroom. “I never lived in a new house before.”

Recycling Housing

Joe Inouye remembers having to boil five-gallon pots of water when he wanted to take a bath. He also remembers the faulty wiring and the cracks in the walls and ceiling of the Little Tokyo building that he and his wife, Jane, have called home for 15 years.

It was 1977, and Inouye and the other tenants of the San Pedro Firm building were stuck. They could not afford anything better. And besides, they wanted to remain in their neighborhood.

“I had to stay because I wasn’t a rich man,” said Inouye, 69, a retired fruit packer who came to Little Tokyo from Hawaii in 1959. “Besides, I’m in Japanese town and I didn’t want to leave.”

The building, a 42-unit, three-story structure at 1st and San Pedro streets, languished in decay until tenants approached the Little Tokyo Service Center for help. They hoped that the community organization--which provides everything from counseling to transportation for the elderly--would be their best advocate.

“It was natural for us to get involved,” said Lisa Sugino, director of the Little Tokyo Service Center’s housing program. “This was a grass-roots effort to save the building. The community felt that this was their building.”

After a year of arranging financing through low-interest government loans and private investors, the Service Center and the Los Angeles Community Design Center purchased the brick building in 1989 and gave it a badly needed refurbishing. The price was about $4 million.

Such efforts, city officials say, are the wave of the future.

With limited open space and a real-estate market that has seen values plummet as much as 50%, refurbishing existing structures can be the best way to develop affordable rental housing. The strategy means new units can become available faster than developing projects from scratch, experts say.

“I think rehabilitation is the direction we are going to go in,” said Luna of the Housing Department, which is expecting to provide as much as $20 million next year in federal funds to private investors and nonprofit organizations to rehabilitate blighted buildings. The money is part of a department strategy to target funds and technical assistance from other city agencies to help revitalize blighted neighborhoods. Luna said the department will still offer loans for new construction.

At his apartment building, where monthly rents range from $250 to $320, a proud Inouye showed visitors the clean walls, new refrigerators and spacious community room.

“It’s beautiful now,” he said. “We got hot water. And you don’t mind living in a place that doesn’t have cracks.”

The Affordable Dream

Carla Murphy never thought she would own a home.

For two years, she looked off and on for a place to call her own. When she finally found something she liked, she applied for a loan with her bank. But she was turned down because the loan officer said late payments on past bills made her a credit risk.

She was devastated by the experience.

“I was scared,” said Murphy, 31, a manager of a Mid-Wilshire insurance consulting company. “I didn’t think I could get financing.”

But then a friend told her about the Community Home Buyers Program.

Developed three years ago by the Federal National Mortgage Assn., the nationwide program is available to home buyers in neighborhoods where at least half the residents are minorities. The program has only recently begun to take off, spurred by last year’s riots and by increased pressure on financial institutions to make inner-city mortgage loans as required by the Community Reinvestment Act.

Under Fannie Mae guidelines, buyers can purchase a home with as little as 5% down, 2% of which can be a gift from a family member or a grant from a nonprofit or government agency. In addition, lenders can use non-traditional sources to evaluate credit history: participation in community lending pools, timely utility and rent payments and character references.

To be eligible, would-be home buyers must take a four-hour class on calculating a monthly budget, mortgage loan terminology and other matters related to home ownership. They also are taught to plan what they can buy given their financial resources. The free classes are offered by neighborhood brokerage companies across the central city.

“The information is nothing earth-shattering, but it’s the nuts-and-bolts of what home ownership is all about,” said Fred Thomas III, president of Pico-Union-based Professional Realty Mortgage, which began offering the classes last December.

Countrywide Funding, the nation’s largest mortgage originator, selected Thomas and other community brokers to help provide $1.25 billion for the home buyers program nationwide. So far, Thomas said, about 35 of the 100 residents who have gone through his classes have purchased homes.

Murphy was one of them, moving into her dream house in October. The two-bedroom, 1,235-square-foot condominium, with its spacious living room and high ceilings, is in a cozy neighborhood near 8th Street and Plymouth Boulevard not far from Hancock Park. Murphy said she purchased the $155,000 unit with an $8,000 down payment.

“You can’t imagine how happy I am,” she said. “I would have kept putting off buying a place if I hadn’t taken this class. I think there a lot of other people who are in a similar situation.”

Fannie Mae official Scott Van Dellen, who oversees the program, said outreach by community brokers has made more people aware of the program. “There are a lot more minority and Spanish-speaking loan officers getting involved,” he said.

Also encouraging, officials say, is a recent announcement by the federal Department of Housing and Urban Development that it is considering offering zero-interest and low-interest loans next year to low- and middle-income home buyers.

Though home sales in Los Angeles County jumped 11% in October from a year earlier, the figures in South-Central were down slightly for September, the latest data available for that area. In September, 145 homes closed escrow, compared to 167 in the same month last year, according to the Los Angeles Assn. of Realtors.

Still, with an average home price of $150,000 in Central Los Angeles, the American Dream is within reach of many residents, Thomas said.

Tipping the Housing Balance

While Los Angeles has grown 17.5% between 1980 and 1990, the number of housing units has only risen 9.3%. Population growth has especially outstripped new housing in the central city; the Southeast area contains other cities and was not included in the study.

CHANGE IN POPULATION AND HOUSING UNITS, 1980-1990

POPULATION HOUSING Midcity 19.5% 5.8% Southwest 10.6 8.9 South 21.1 3 Central 13.6 -0.2 East 17 5.4

THE RISE IN OVERCROWDING Percentage of overcrowded rental households: 1980: 13% 1990: 22.3%

RENTER HOUSEHOLDS IN OVERCROWDED QUARTERS

The number of overcrowded households--those with more than one person per room, excluding bathrooms, foyers and porches--has increased 9.2%. For renters, Westlake is the most crowded neighborhood while Bel Air-Beverly Crest is the least at 2%.

MODERATE SEVERE OVERCROWDING* OVERCROWDING** Westlake 8% 52% Boyle Heights 15 44 Southeast L.A. 13 37 N. and E. Central L.A. 11 38 Northeast L.A. 13 32 Silver Lake-Echo Park 10 32 South Central L.A. 11 28 Wilshire 7 26 Reseda-West Van Nuys 8 15 Central City 2 18

* 1.01-1.5 people per room ** More than 1.5 people per room

Housing at a Glance

WHO OWNS

The percentage of owner-occupied dwellings in the city has decreased from 1980 to 1990 by 0.9%, somewhat greater than rates for the county, state and nation. Only two out of five Angelenos own their homes, compared to two out of three nationwide.

L.A. BY ETHNICITY White: 46% Black: 32% Asian and Pacific Islanders: 38% Native Americans: 30% Latino: 24% * Los Angeles: 39% Los Angeles County: 54% California: 56% United States: 64%

COST OF HOUSING

People who pay more than 35% of their income for housing are classified as in households with “excessive payment burdens.” The Southeast, with 30%, has more owners in this category than any other neighborhood, while Palms-Mar Vista-Del Rey has the least, at 17%. Almost one out of two renters living in Westwood, South-Central and the Southeast neighborhoods pay “excessive” rent, while 27% of those in Bel-Air-Beverly Crest do.

OWNERS

Southeast L.A.: 30% South Central L.A.: 27 N. and E. Central L.A.: 27 Westlake: 27 Wilshire: 26 West Adams: 24 Silver Lake-Echo Park: 20 Northeast L.A.: 19 Boyle Heights: 18 Central City: 18

RENTERS

South Central L.A.: 49% Southeast L.A.: 49 West Adams: 46 Westlake: 43 N. and E. Central L.A.: 42 Wilshire: 42 Central City: 40

Northeast L.A.: 39 Silver Lake-Echo Park: 38 Boyle Heights: 37

Source: January, 1993, study by Los Angeles Housing Department.