Freeway Feud
A quarter-century after a coalition of activists filed a class-action lawsuit forcing government agencies to replace low-income housing lost in the construction of the Century Freeway, the battle is still raging.
Never mind that the freeway, completed more than three years ago, is now a bustling thoroughfare and that thousands of affordable apartments have been built under a 1979 federal consent decree that ended the lawsuit.
Never mind that the federal government is no longer a defendant in the case, and that the state has faded into the background, turning over the job of providing housing to a private nonprofit corporation.
This fight, plain and simple, is over how and where the last of the public money allocated to settle the lawsuit--$100 million--should be spent.
Should it be used to continue building subsidized housing near the freeway until it runs out, as was originally planned? Or should the fund become permanent--an endowment with broader goals than just low-income housing? Should the size of the fund’s development subsidies be cut? Should its projects be spread over a far wider area of Southern California?
The nonprofit Century Housing Corp. has angered plaintiffs from the 1972 lawsuit by proposing changes from the original housing-replacement mission.
Now that nearly 4,300 apartments and houses have been built within 12 miles of the freeway’s route, Century Housing plans to fund developments as far away as the San Fernando Valley and Orange County. It also intends to severely cut back on deep housing subsidies and charge more competitive interest rates on its loans.
“The original goals have been met and exceeded,” declared G. Allan Kingston, president and CEO of Century Housing.
Carlyle W. Hall Jr., whose law firm represents the plaintiffs, condemned the business strategy as “privatization run amok” and said it would gut the nonprofit’s mission of providing grants that have been crucial in keeping subsidized apartment rents affordable.
“We don’t need another bank that would take money out of the communities,” Hall said.
Earlier this month, federal appeals court Judge Harry Pregerson, who has presided over the freeway litigation since 1972, agreed with Century Housing, granting it wider latitude to develop beyond the freeway corridor and exercise more financial freedom. Plaintiffs plan to appeal.
A New Deal-style liberal, Pregerson has long championed the notion of government’s obligation to replace units demolished by freeway construction. He has taken judges, politicians and others on tours of housing developments funded under the consent decree.
Alluding to a notorious tendency for urban renewal programs to uproot poor families without concern for their fate, Pregerson once declared that the Century would be a freeway “that has a heart.”
He was brought into the conflict in the early 1970s, when lawyers sued to win far broader compensation for residents who were losing their homes to freeway construction. The plaintiffs--a coalition that included the National Assn. for the Advancement of Colored People, the Sierra Club, the Environmental Defense Fund, Freeway Fighters and the city of Hawthorne--were represented by the Center for Law in the Public Interest.
To settle the suit, the state Department of Transportation and the Federal Highway Administration signed a consent decree in which they reduced the width of the freeway and set aside highway money to build about 4,000 units of affordable housing--less than half the 8,800 units destroyed by freeway construction. The Century Freeway Housing Program, a wing of the state Department of Housing and Community Development, was created to carry out the mission.
The consent decree was noticeable for numerous social provisions that attempted to assure women and minorities a share of jobs and contracts building both the freeway and replacement housing.
At first, the housing construction target area was confined to six-mile corridors on either side of the freeway from Norwalk to Los Angeles International Airport.
After shoddy construction and mismanagement plagued the early developments, the program shifted gears in 1989, putting less emphasis on building and more on subsidizing projects built with public and private partners. More was being accomplished with fewer dollars.
Meanwhile, the scope of the subsidized housing program moved beyond the original six-mile zones north and south of the freeway--past communities such as Lynwood, Compton, Inglewood and Norwalk--and into communities within 12 miles of the freeway, like West Hollywood and the Pico-Union district.
The move to privatize the housing program began as work on the freeway neared completion in the early 1990s. To end their participation, the federal and state governments contributed additional money to the housing fund. The $2.2-billion freeway opened in 1993; the nonprofit took over the housing program two years later.
When privatization was first suggested in the 1980s, the plaintiffs envisioned a nonprofit corporation run by their allies, such as then-Mayor Tom Bradley and then-Democratic Assemblywoman Maxine Waters. But that didn’t happen.
Although one ally, Bill Robertson, former executive of the Los Angeles County Federation of Labor, became the nonprofit board’s chairman, other members now include professionals in real estate and banking, and former executives from the government-run freeway housing program, including Kingston.
Century Housing Corp. abandoned its offices in downtown Inglewood and moved to more expensive surroundings in Culver City’s Corporate Point development.
Kingston said it became clear that if the housing corporation kept putting most of its assets into deep subsidies, there would eventually be no funds left.
“There would be nothing left, just a carcass to continue to provide affordable housing,” he said.
Century Housing’s new mission is to make enough money to fulfill its commitment to the original goal of helping nonprofit developers build affordable housing, Kingston said.
In seeking the court’s permission to develop beyond the 12-mile limit, Robert J. Norris Jr., Century Housing’s executive vice president, argued that concentrating too many developments in one area inflated costs.
Pregerson agreed, ruling that the corporation deserved the right to become “a responsible, regional force in the affordable housing community of Southern California.”’
Plaintiffs’ attorney Hall accused Century Housing of a hidden agenda: “They want to move their new proposed business activities into Orange County and similar more affluent areas,” he said, “because there are fewer business risks and more profit-making potential in those areas than in the corridor cities.”
(The 12-mile limit extends into only the northern fringe of Orange County.) Hall said the 12-mile corridor already gives Century Housing a 600-square-mile area. Century Housing executives bristle at such criticism. In January, after a group of nonprofit housing providers called a meeting to discuss objections to the proposed changes in the court decree, several members of the group received a letter from Century Housing’s attorney that suggested they might be sued for slander.
“It has come to my attention that you may be discussing with various third parties your opinion of Century Housing Corp., its activities, and ability to serve the affordable housing industry,” the letter stated.
“If you are represented by counsel, I suggest that you discuss this matter with your attorney in order to understand the potential impact of your statements on Century’s (and others’) prospective business relationships.”
“It was a little startling,” recalled one housing advocate. “It made a lot of people angry.”
Kingston said the letters were sent out of concern that remarks by critics “could interfere with our business.”
William Brennan, who oversees the state Department of Housing and Community Development, charged that the plaintiffs’ lawyers are keeping the argument alive for the sake of legal fees. “The case is over . . . but they won’t let it go. This is a gravy train,” he said.
Kingston says there is a misperception that Century Housing wants to get out of the affordable-housing business, particularly in developments near the freeway corridor.
He points with pride to housing developments that carry the theme “More Than Shelter,” developments that specialize in offering residents child care, tutoring, and HIV and AIDS services.
Housing advocates say the changes in Century Housing will undo much of the good.
Said Jennifer Bigelow, former director of the Southern California Assn. of Nonprofit Housing: “This source of money is pretty much the only pot of money that can be used creatively with other conventional sources to help local nonprofit community-based groups do affordable housing.”
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New Housing as a Result of Century Freeway
Since a 1979 federal court decree, 4,114 subsidized units--mostly apartments--have been constructed to assist those people displaced by construction of the Century Freeway. Another 169 units are under construction, and financing is committed on 816 more, according to the nonprofit corporation now in charge of the program. Here is a look at the new and planned housing units:
West Adams: 123 units, 3 projects
Westlake: 318 units, 6 projects
Koreatown: 19 units, 1 project
Little Tokyo: 101 units
South Park: 160 units, 2 projects
Pico-Union: 111 units, 2 projects
Hoover: 61 units, 3 projects
El Sereno: 230 units, 3 projects
Crenshaw: 65 units, 2 projects
Hyde Park: 87 units, 2 projects
South-Central: 341 units, 10 projects
Watts: 19 units, 2 projects
Willowbrook: 147 units, 4 projects
Athens: 129 units, 4 projects
Mar Vista: 32 units, 1 project
S. Whittier: 82 units, 2 projects
San Pedro: 10 units, 1 project
West Hollywood: 103 units, 3 projects
Bell: 56 units, 5 projects
Bell Gardens: 126 units, 1 project
Montebello: 32 units, 1 project
La Puente: 95 units, 1 project
Pico Rivera: 68 units, 1 project
Norwalk: 102 units, 4 projects
Downey: 60 units, 2 projects
Cudahy: 56 units, 5 projects
Bellflower: 24 units, 1 project
Anaheim: 135 units, 1 project
Buena Park: 45 units, 1 project
Paramount: 70 units, 4 projects
Lakewood: 50 units, 12 projects
Lynwood: 50 units, 7 projects
Gardena: 20 units, 1 project
Hawthorne: 291 units, 6 projects
Lawndale: 10 units, 1 project
Inglewood: 605 units, 8 projects
Huntington Park: 167 units, 2 projects
Long Beach: 558 units, 1 project
Culver City: 20 units, 1 project
Compton: 369 units, 8 projects
