Landlords Suffer as Fearful Quake Victims Move Away : Housing: Tenants want stable ground. In hard-hit areas, even seismically sound, low-rent units find few takers.

One day after the Jan. 17 quake crumpled the walls of their ground-floor Sherman Oaks apartment, Jim Currah and his fiancee, Gloria Villa, had found a new home: a roomy, second-story apartment in Glendale, nearly 20 miles from the epicenter.

The couple never considered the vacant apartments that had withstood the quake in their old neighborhood, a quiet tree-lined enclave of luxury buildings with heated pools, weight rooms and saunas. “We wanted to get as far away as possible,” said Villa, a student at Southwestern University School of Law. “We’d go back to New York if we could.”

In the three months since the Northridge quake, many people have followed in the couple’s footsteps, leaving familiar neighborhoods in a search for stable ground. City records and apartment managers indicate that the apartment vacancy rate in the San Fernando Valley has changed little since the quake, although damage to more than 11,000 apartments forced thousands from their homes.

The march from quake-damaged neighborhoods has been strong enough to affect rents. Close to the epicenter, in Northridge, Van Nuys and Reseda, rents are stuck at pre-quake lows and some landlords are dangling such apartment-warming gifts as microwaves and other incentives to attract reluctant tenants.

But in Conejo Valley communities along the western leg of the Ventura Freeway, landlords report that quake victims have snapped up vacant apartments and rents are rising for the first time in years, by at least 5% in some cases, more than the cost of living.

“They are coming from Chatsworth, Northridge, all over,” said Michael Sigona, manager of a Westlake Village apartment building. “They’re beating our doors down.”

In Los Angeles, where nearly 60% of the population are renters, apartments are the bedrock of community. The Northridge quake did not simply wreck big chunks of residential real estate in Los Angeles and Santa Monica, but neighborhoods where people lived, shopped and worked.

“A city isn’t made up of buildings, it is made up of people,” said Mayor Judy Abdo of Santa Monica, which lost 1,500 apartments, or 5% of all apartments in the city. “People are our most precious resource and because of the quake they are not able to live here. That is devastating to the city.”

Although vacancy rates for Santa Monica are unavailable, officials say the city did not have enough empty apartments to house people displaced in the quake. Tony Trendacosta, general counsel to the rent control board, said many people were forced to moved outside the community, relocating in the South Bay or in West Hollywood.

Noting that many of the units were affordable, Abdo expressed concern that the rebuilt units will be beyond the means of displaced renters.

In Los Angeles, the apartment damage was concentrated in two areas. In Central Los Angeles, people were forced from 3,268 yellow- or red-tagged apartments, less than 1% of that area’s apartment housing. In the Valley, vacated yellow- and red-tagged apartments accounted for 5.3% of apartments.

The worst tragedy of the quake occurred when the top floors of the Northridge Meadows apartment building collapsed, killing 16 people who had lived on the first floor.

With so much destruction in the area, Valley landlords anticipated a tighter rental market. But they now say they underestimated the fear that has caused many quake victims to scatter.

“You cannot imagine how frightening it is,” said Villa, who was thrown from bed by the pre-dawn earthquake in a shower of ceiling plaster.

Her former neighbors at the apartment building on Natick Avenue, among the hardest hit in the city, have gone in different directions. An 82-year-old woman has moved in with her daughter in Tarzana. A 79-year-old woman is living at an Encino retirement home. Tim Gross, a 29-year-old keyboard musician, has moved to Palm Springs.

“I had to get out of there,” said Gross, who commutes to gigs in the Valley twice a week. “I have a friend who still lives in the Valley. He’s going into therapy; he can’t take it with all the shaking.”

Among building managers, tales of panicked tenants are legion.

Two dozen tenants fleeing a Northridge building for Simi Valley, Long Beach and Las Vegas in the first weeks after the quake abandoned an assortment of sofas, refrigerators, dishes and clothing that apartment manager Matt Mattison eventually tossed out.

“They took what they could and didn’t come back for the rest,” Mattison said. “They said, ‘Here’s my keys, here’s my garage opener, I’m outta here.’ All logic was dismissed.”

Corea said tenants fled the third floor of a three-story apartment building her company owns and manages in Van Nuys. They preferred to camp in a park rather than rock three stories off the ground, she said. They haven’t returned to the building, she said, although a city inspector declared it structurally sound.

“It is inexplicable in some ways,” said Bruce Indermall, manager of several buildings in the Valley. “These buildings are not red-tagged, they are not yellow-tagged, and they have high vacancy factors. The biggest surprise . . . is how much fear there is. I am not sure it is an easy situation to resolve.”

Statistics collected by the Department of Water and Power give an indication of post-quake apartment vacancies. One week before the quake, the DWP reported 19,000 vacant apartments in the Valley, a vacancy rate of 9.3%. By April, vacancies had risen to 30,615 or 14.9% of available apartments.

The numbers are imprecise because it appears that many badly damaged apartment units were counted as vacant even though they were uninhabitable. Nonetheless, experts say, the big rise in recorded vacancies indicates that many thousands of displaced tenants have not taken new apartments in the Valley.

“It’s my sense that anyone who has the ability to leave the Valley is doing so,” said Robert Starkman of the real estate consulting firm of Kenneth Leventhol & Co.

In interviews with community activists and apartment managers, it is apparent that not all renters who leave are doing so by choice. City officials say the quake destroyed a big chunk of affordable housing; the average monthly rent for a two-bedroom unit was a manageable $640. Displaced quake victims on tight budgets face a difficult search.

The number of people still looking for affordable apartments could be sizable: 15,000 certificates issued to quake victims for government-subsidized housing have not been used, and officials don’t know why. They speculate that some landlords are reluctant to join the government program and some quake victims are unable to find suitable apartments.

Affordability is not the only issue among displaced renters. Trauma caused by the quake has inspired requirements of apartment style and location that are sometimes difficult to fill.

Maria Martinez, 38, knew what she wanted when her second-story Canoga Park apartment was demolished: a ground-floor apartment, private entry, plus an affordable rent. Martinez said she broke a rib tumbling down stairs in the quake; she wanted an apartment that would be easy to get out of.

Two months later, after checking nearly two dozen apartments, she chose a two-story, townhouse-style unit in Canoga Park.

How long it will take renters to resettle has become one of the great guessing games in local real estate. Many believe the answer has much to do with how long it takes to repair the damage, a constant reminder to tenants of the scariest seconds of their lives.

What’s more, city officials say wrecked apartment buildings lining Villa’s and Currah’s former block on Natick Avenue--and other blocks in the city--stand as open invitations to vandals and squatters whose presence is likely to drive tenants away.

Take the two-block Northridge neighborhood bordered by Roscoe Boulevard, Schoenborn Street, and Lindley and Zelzah avenues. One-quarter of the buildings are seriously damaged. Suspected gang members have turned one vacated building into a hangout although the owners have boarded up doors and windows to keep them out.

Martha Carrasco of the city housing department said residents on the street have already left, some moving in with relatives, other returning to their native Mexico. Others have simply disappeared.

With help from police and city housing officials, the struggling neighborhood had been improving before the quake; in a cooperative spirit, landlords had pitched in to improve street lighting.

Although there are considerable pressures to rebuild quickly, history suggests the process will be slow. A UC Berkeley study found that less than half of damaged apartments were rebuilt four years after the 1989 Loma Prieta quake. A lack of financing and inadequate insurance were major reasons.

City officials said apartment owners in Los Angeles face similar economic obstacles. Few are adequately insured. Three years of recession, marked by factory shutdowns and layoffs, have conspired to drive rents down.

According to the property consulting and investment firm of Marcus & Millichap, apartment buildings citywide have lost half their value since the market peaked in 1989. Most of the 200 apartment building sales last year involved a financial institution unloading a property it had foreclosed on.

Few investors who purchased apartments in the 1980s can borrow against them to fund quake repairs. That is because debt owed on those properties exceeds their resale value. Gary W. Squier, general manager of the Los Angeles Department of Housing, estimates that 20% of seriously damaged apartments will not be fixed.

Hard times are affecting tenants’ decisions also. For Stephanie Wheeler, 26--aspiring screenwriter, Hollywood gofer and real estate school pupil--the quake was the last of a series of insults suffered in recessionary Los Angeles.

“If I had something going for me, I’d stay,” Wheeler said, emptying the contents of her Sherman Oaks apartment into a rented van three weeks ago in preparation for the trip home to Ft. Myers, Fla. “I was planning to sell real estate in this neighborhood, but well, it looks like the earthquake wiped that out.”

With rebuilding years away, landlords with apartments that withstood the quake are relying on time-honored tactics to attract and keep tenants: a month’s free rent, free credit checks, breaks on security deposits. One Van Nuys landlord is offering a free microwave to people who sign a year’s lease.

Some landlords report their methods are working, as tenants such as Marita Dannes return. Forced to move when her apartment building was red-tagged, Dannes first went to Orange County to stay with family and friends. When she couldn’t find an affordable apartment in Brentwood or Beverly Hills, she moved into an apartment eight blocks from her old one in Sherman Oaks.