Relocation Is Bad News for Some, Good for Others : Recovery: Quake vouchers can mean better housing. But vacancies may dry up as they flood the market.

As thousands of displaced earthquake victims move on to the second phase of recovery--resettling in new apartments or rental homes--they are finding a shifting, uncertain housing market and the windfalls and frustrations of a flood of government largess.

On the front lines of the unparalleled rehousing effort, federal and local authorities take pride in the roughly $100 million in emergency housing cash grants and vouchers they have distributed in less than three weeks to about 30,000 quake victims.

But the outpouring of emergency rent monies, coupled with a huge, unprecedented distribution of low-income housing vouchers, is sweeping lives and market forces in unpredictable directions, interviews with quake victims, landlords and relief workers show.

Some victims say they are having a difficult time finding new housing in their old neighborhoods and are settling for less attractive units elsewhere. “Places have been filling up,” said Cal State Northridge sophomore Dionne Barnes, 19, who made about 50 calls for apartments listed in newspaper classified ads before finding a suitable vacancy and a landlord willing to accept a federal housing voucher.

Barnes, who lived across the street from the campus before the quake, ended up about five miles east in an apartment in Panorama City. “It was my last choice of city, but it’s a beautiful complex,” she said.

Other victims say that hunting down new housing has been a snap.

Jose Olguin, 37, whose east Hollywood apartment was rendered unlivable when the foundation snapped, said his main priority was finding another unit in the same neighborhood so his two children would not have to switch schools. “I found one half a block from the school. You can’t beat that. I consider myself very lucky,” he said.

Indeed, some say that the U.S. Housing and Urban Development Department’s 18-month low-income subsidy program--never before made immediately available to disaster victims--has improved their conditions and financial standing.

Olguin has gone from a $500-a-month unit to a $750 one. But because he is disabled and his wife earns relatively small wages as a housecleaner, his family’s share of the monthly rent for the next 18 months will be $220 with his HUD subsidy. Olguin said he plans to hold on to the $280 that he saves each month to put toward the higher rent when the subsidy expires next year.

“The way I see it, the earthquake turned from negative to positive,” said the longtime Los Angeles resident, adding that he has been surprised at the government’s generous response.

Some cases are even more striking.

A middle-aged woman who had moved here from San Francisco six weeks before the earthquake said she was certified for a HUD voucher because the $75-a-week Hollywood Boulevard hotel she had been living in was declared unsafe. The woman, an office temporary worker who declined to disclose her name, said she had located a $570-a-month, one-room apartment in Marina del Rey which--when her HUD subsidy is factored in--will cost her $120 a month for the next 18 months.

“This is the biggest break I’ve had in a long time,” said the woman as she waited in line with her completed paperwork at the earthquake disaster assistance center in Hollywood. “It’s almost too good to be true.

“But they do say this is the land of opportunity.”

The new dynamics of the marketplace are being driven by the large number of damaged units, and the influx of money from two major programs. The Federal Emergency Management Agency is providing cash grants, averaging about $3,100, to renters and homeowners whose homes were severely damaged. There are no income guidelines for these grants and recipients are free to spend the money wherever they can find housing or to repair their residences. About 29,000 grants have been issued.

The new 18-month HUD program is reserved for those with low incomes, and can pay up to 90% or more of the rent. Recipients pay 30% of their income and the government pays the rest. The subsidies may only be used at rentals that meet stringent inspection standards and where landlords agree to a host of program requirements. About 550 of those rental agreements had been finalized as of Friday afternoon and thousands more are expected.

Across Los Angeles, especially in the San Fernando Valley, vacancy rates were relatively high before the quake and many apartment owners are eager to get tenants, authorities say.

But quake victims also could find increasing competition for available, desirable units in some areas, as well as rising rents, they add.

“We know there are some places in the Valley with zero vacancies,” said Joe Shuldiner, assistant secretary of HUD. And, he said, some people in rent-controlled Santa Monica “may have to look elsewhere” because of a tight rental market and thousands of lost units.

“There are pockets of neighborhoods with very low vacancy rates where it will be difficult, but overall people should be able to find something in the L.A. area,” Shuldiner said.

Roughly 21,800 dwelling units, the overwhelming majority of them apartments, have been vacated in the city of Los Angeles as a result of the quake.

“It is an extraordinary blip to have 20,000 people looking for housing” at the same time, said Barbara Zeidman, assistant general manager of the city’s Housing Preservation and Production Department. “What is not at all clear to us is the match between available units, in terms of rent level and size, and those lost.”

Also unclear, authorities and apartment industry sources said, is how many apartment owners will accept the special 18-month HUD vouchers being issued to more than 12,000 low-income quake victims.

“That’s the unknown,” Shuldiner said.

Phillip Hagar, manager of member services for the Apartment Owners Assn. of Greater Los Angeles, said landlords are weighing the benefits and risks of the vouchers. “(They) will (decide) if they want to go through the (government) and be in business with them,” he said. “In a sense it’s positive: You can get the rent guaranteed for 18 months. But the negative is that you’re dealing with another bureaucracy.”

Some landlords said they are leery of the 18-month vouchers. “I have to know they have the income to pay after 18 months,” said one apartment owner who has been inundated with inquiries about her units in the Pico-Fairfax area. “If they can’t afford the rent, I’ll have a hard time getting them out (later).

“And how can I all of a sudden ask them for last month’s rent, when they don’t have it? It’s kind of putting us in a difficult position.”

Finding housing with landlords willing to accept the unusual vouchers may prove more difficult in some areas of the city than others, officials said. Some fear a crunch could come in areas such as heavily damaged Hollywood, where older, still-intact, but somewhat run-down apartment buildings may not meet requirements.

“It may be hard, even with a certificate in hand, to find (eligible) housing,” said Gary Squier, a top city housing official.

At least for now, fieldworkers say problems have not been significant. Earthquake victims seem to be “finding places down the street or a couple blocks away” from their damaged apartments, said city housing inspector Hubert Taylor, who has been working out of the Hollywood disaster assistance center. “People are being displaced by blocks rather than miles.”

But a bigger squeeze is expected in coming weeks.

Although more than 12,200 low-income victims have qualified for HUD’s housing subsidy, only about 10% of them have located new apartments so far.

Before the voucher holders can resettle, personal inspections of the new units must be conducted by government housing inspectors to ensure that the units are in good shape. Contracts must then be signed between landlords and city housing authorities, who are administering the program for HUD.

“The bottleneck, if one develops, will be because of the number of inspections,” said Marshall Kandell, spokesman for the Los Angeles City Housing Authority, which is administering the bulk of the low-income housing vouchers. “Some of it, you can only expedite to a certain extent. (But) you still have to sit down and do the deal with the landlord and do the paperwork.”

To deal with the onslaught of paperwork, inspectors are working up to 12 hours a day, seven days a week.

Additional inspectors on loan from local government housing authorities from Calexico to Alameda County have also been pressed into service. Officials hope the increased staffing can handle the inspection and negotiation load, and that quake victims will return requesting rental contracts at a fairly even, steady pace.

Thus far, officials have been able to complete most of the inspection work within several days of a quake victim locating a unit and returning the initial paperwork.

At the 91-unit Hayvenhurst Family Apartments in Van Nuys, manager Hector Rodriguez on Friday was preparing his first four units for inspection under the quake voucher program. Having experienced minor damage in many units and losing a number of tenants after the quake--his vacancy rate soared from 11% to 29%--Rodriguez was glad to see the process moving quickly.

“Overall, I haven’t seen any problems,” he said. “But it’s still a little early.”

In the case of the FEMA housing assistance, no on-site inspections of new housing are made.

“We certainly encourage people to find as suitable a residence as they can with the funds we provide,” said FEMA spokesman Brett Hansard. “There’s (also) homes that might still be habitable, so the (owners) can use the funds to make their homes safe, sanitary or secure.”

In previous disasters, FEMA emergency housing checks were distributed only after an inspector had verified that an applicant’s home had been heavily damaged or destroyed. But bottlenecks arose, particularly after Hurricane Andrew in 1992 when thousands in South Florida were left homeless.

To prevent such hitches after the Northridge quake, FEMA decided to release housing checks to some victims even before the inspection process was completed, using city housing charts and maps that suggested areas of greatest damage.

So thorough was the effort that some residents unexpectedly received checks they had not asked for. FEMA on Thursday said it was phasing out that “fast track” program and hoped to have 1,500 inspectors in the field next week to keep the aid flowing.

Times staff writer Carla Rivera contributed to this story.

Finding Housing Aid

Many housing assistance programs are available to quake victims. Applications can be made over the phone or in person at one of 20 disaster application centers in the Los Angeles area. To begin the process, individuals can call (800) 462-9029, 24 hours a day to register. FEMA has also set up a help line for information on submitted applications or for general information, (800) 525-0321, open 6 a.m. to midnight.

Some of the housing aid programs:

* FEMA Disaster Housing Assistance Program

Emergency grant to provide immediate, temporary aid for housing-related costs, regardless of income, for up to 18 months. Assists people who are unable to live in their homes.

* FEMA Disaster Mortgage and Rental Assistance Program

Emergency grant designed to address longer-term problems. Covers mortgage or rental payments for up to 18 months, regardless of income. Helps people who, as a result of the disaster, have lost their job or business or face foreclosure or eviction.

* Small Business Administration Disaster Loans

Low-interest loans for up to 30 years for individuals who lost their homes or sustained damages up to $200,000; personal property losses up to $40,000 for homeowners and renters. Loan amounts are based on the type and extent of disaster-related losses not covered by insurance. Eligibility is based on ability to repay.

* Department of Housing and Urban Development Housing Assistance

Housing subsidies, rental assistance provided for up to 18 months. HUD has made available Section 8 housing subsidies for low-income individuals whose residences have been deemed unsafe. This program is specifically for quake victims, administered through local agencies and is separate from the standard Section 8 housing program offered through HUD. Housing must be located by the applicant and must meet HUD guidelines. Agencies do not have designated units for this program. Applicants must have certification from FEMA that they are displaced by the quake and must meet income requirements of $16,900 for one person to $31,900 for a family of eight or more.

* Los Angeles City/HUD Assistance

Emergency low-interest loans to displaced tenants and residential property owners, authorized by the City Council from federal housing funds. Tenants who apply for help at FEMA assistance centers may be given $500 vouchers immediately and up to $2,000 for first and last months’ rent and security deposits. These must be repaid. Housing rehabilitation loans, normally available only to low- and moderate-income owners, are available regardless of income as long as the total encumbrances on the property, including the new loan, do not exceed the appraised value. Administered through the Los Angeles City Housing Department. HUD has expedited delivery of the funds for disaster-related uses.

* California Department of Housing and Community Development, Natural Disaster Assistance Program

Low-interest, deferred payment loans for homeowners and rental property owners, up to $50,000. Provided for repair or reconstruction of real property damaged or destroyed. Applicants must first exhaust insurance and all other state and federal disaster assistance in order to qualify.

Sources: Federal Emergency Management Agency, Small Business Administration, Housing and Urban Development Department

Research by NONA YATES / Los Angeles Times