Lincoln Heights : Tenants to Own 132-Unit Complex

Residents of Mission Plaza Apartments plan to celebrate Sept. 30, the day their tenants association will become the owners of the 132-unit complex where many of them have paid rent for 20 years or more.

The residents’ association will be the first in the city to take advantage of a federal program to help renters buy their buildings, said Anna Ortega-Garcia, manager of the city Housing Department’s Prepayment Program.

“After 20 years of paying rent, finally we’ll become the owners,” said Miguel Castellanos, president of Mission Plaza Tenants Assn., which initiated the process to buy the property two years ago.

“There’s a lot of things we’re going to have more in our favor. Everyone’s waiting for Sept. 30.”

Residents have been attending Sunday morning classes held by representatives of the federal Department of Housing and Urban Development to learn about becoming owners and handling a payroll to establish their own management company.

The transaction, funded in part by a $900,000 low-interest loan from the city Housing Department, will enable most tenants to pay no more than 30% of their income for rent. The total cost to buy and renovate the building is estimated at $8.4 million.

HUD, which loaned $7.5 million to Mission Plaza Tenants Assn., has identified 145 buildings with 10,000 units in Los Angeles that qualify for this program, Ortega-Garcia said.

Owners who received 40-year loans on their property have the option of selling after 20 years, she said, but under the 1987 Emergency Low Income Housing Preservation Act and a similar bill passed in 1990, owners must first offer to sell their property to the tenants to keep the number of affordable units available.

If the tenants or a tenant-approved nonprofit agency opts not to buy the property after 15 months, the owners can sell the property to an outside individual, who may not want to keep the units affordable, Ortega-Garcia said.

“If we don’t buy the units, another company could buy it and get rid of the Section 8” housing subsidy, Castellanos said.

“There are 132 families who live here and only 17 people here pay the top rent. The rest of the people qualify for help under Section 8.”

The city started its prepayment program to fill the gap left by HUD financing, which covers 95% of the purchase price, Ortega-Garcia said.

Tenants of two apartment complexes in the San Fernando Valley are going through the process of buying their buildings, she said.

“It’s not every day that a group of tenants can buy their building,” she said. “It gives them more of a say in the decision-making in, say, the maintenance of their building.”

The tenants of Mission Plaza have a wish list of improvements they want to make to the 26-year-old complex, including newer and safer playground equipment, more lights to improve security and more plants and grass. They also want to raise a wall to stop vandals from climbing over.

“I think these things are going to improve as soon as we receive the units,” Castellanos said.

“We want to work on these things. Everybody wants to work.”