Federal officials will announce today an effort to combat urban blight caused by the Northridge earthquake with a new $30-million federal loan program.
The federal funds are earmarked for neighborhoods that have lost a significant number of housing units due to quake damage. City officials have identified more than a dozen neighborhoods that sustained so much damage they have been dubbed ghost towns.
Those neighborhoods are spiraling toward full-fledged urban decay because apartment building owners cannot qualify for loans to rebuild and are abandoning their properties.
The federal program is expected to help rebuild up to 1,500 of the 19,000 Los Angeles apartment units that were abandoned after the earthquake.
Los Angeles Mayor Richard Riordan and Nic Retsinas, assistant secretary for the U.S. Department of Housing and Urban Development, are scheduled to make the announcement today on a lonely stretch of Hollywood Boulevard where more than a dozen large apartment buildings, with about 400 units, were abandoned following the quake.
“This will enable us to have additional funds available for these areas, places that need to come back quickly or we will have ghost towns,” said Bob Moncrief, director of major projects for the Los Angeles Housing Department, adding that neighborhoods in Van Nuys and Hollywood would be among the first targeted. “We are trying to bring back whole neighborhoods.”
City officials said they also intend to direct earthquake reconstruction funds to these areas. They plan to announce today that they have allocated $2.6 million from a $30-million earthquake reconstruction fund to help rebuild seven apartment buildings containing 283 units, in Granada Hills, Northridge, Hollywood and Van Nuys.
The city said it ultimately hopes to help bring back 3,245 units under this program.
Under both programs, building owners will be offered 30-year loans at 3% interest. The loans must only be repaid if a building owner generates profits on the property during the life of the loan.