Program Gives Tenants a New Lease on Life : Sylmar Deal Offers Residents a Voice and Protects Low Rents
A real estate deal in Sylmar represents the first use in Los Angeles of an important federal effort to preserve low-income housing that might otherwise be priced out of the reach of the poor.
Tenants of the Astoria Gardens Apartments have formed a nonprofit association that intends to buy the 136-unit complex. If the deal goes through as expected, it appears that everyone will win:
* The tenants will get to help run the complex and keep paying government-subsidized low rents, which otherwise might have zoomed from 30% of their incomes to the market level.
* The five hospitals that own the complex will get its appraised value, $7.579 million.
* Perhaps most significantly in the long run, Astoria Gardens--like thousands of other low-income apartments built with government aid 2 1/2 decades ago--will remain part of the stock of housing available to poor people.
The purchase, one of Southern California’s first like it, had its roots in the 1960s.
The nation was disenchanted with public-housing projects that turned overnight into dangerous high-rise slums. Turning to the private sector, Congress authorized low-interest construction loans backed or made by the government. Rent in the new housing would be a manageable part of tenants’ income, with government aid filling the gap up to the private market level. The law envisioned housing available to the poor for 40 years.
It all happened during the free-spending days of the “War on Poverty,” and some experts say the U.S. Department of Housing and Urban Development apparently expected a quick victory on the housing front. It wrote regulations under the law that promised to let owners pay off their mortgages and get out of the low-income housing business in only 20 years. Many owners moved to do so in the inflationary 1980s when property values boomed. They created what low-income housing experts call the “prepayment” crisis.
The problem is potentially substantial. In Los Angeles, 10,382 units could be shifted to fully private status by prepayment, according to David Etezadi of the California Mutual Housing Assn. and a consultant for Astoria Gardens tenants. That is more than one-fifth of the federally funded housing for the poor in a city where 40,000 people are on waiting lists for rent subsidies.
Congress declared a moratorium on prepayments in 1987--some outraged owners filed lawsuits--then addressed the subject fully in a 1990 law giving residents the right to buy when owners want to get out.
It’s a lengthy, lawyer-intensive process that includes aid to residents in organizing themselves. With HUD approval, Astoria Gardens could pass to the tenants in 1995.
“Ownership” here is a misleading term. Tenants won’t pocket any money or keep shares in the building when they move.
What they will get is a voice in decisions now made by others. “They will be in control of their own destiny,” says Mona Tawatao, an attorney working with them.
Skeptics say they’ll learn that running low-income properties is no picnic. Perhaps. But headaches are the price of independence. We applaud their resolve and wish them well.