L.A. Officers in Line for Housing Perk

The Los Angeles Police Commission today is set to approve an innovative loan program, which would provide financial incentives for LAPD officers who purchase homes in the city.

The incentives, which also would be extended to firefighters and still must be approved by the City Council, involve virtually no risk to taxpayers. In fact, even if 100% of the loan recipients defaulted, the city only would be out $600,000.

Commissioner Dean Hansell, who spearheaded the project, said that risk is minimal compared to the “tremendous benefits for the city of Los Angeles” in improved police service.

“This is going to prove financially irresistible,” Hansell said.

Back in 1869, officers were forced to live in the city if they wanted to work for the LAPD. Residency within the city limits was an employment requirement at various times over the succeeding 100 years until a 1974 change in the state’s constitution made such rules unlawful.

Nowadays, most LAPD officers--citing quality-of-life and affordability issues--make their homes outside the city’s borders.

Department observers, such as the American Civil Liberties Union, long have been concerned about the dearth of LAPD officers actually living in Los Angeles. They contend that cops who live outside the city have little connection to the community.

According to a 1994 study by the ACLU, 83% of LAPD officers lived outside the city limits.

“We’re absolutely delighted,” Ramona Ripston, executive director of the Southern California Chapter of the ACLU said about the proposal. “We feel that having so many officers living outside the city is a problem.”

Hansell said officers who live in the city have less commuting stress, are better able to respond during “strategic alerts and other emergencies” and become “vested stakeholders” in improving the city. Also, there is less “wear and tear” on the department vehicles some officers are allowed to drive home.

Moreover, he said he hopes the new loan package would bring officers closer to Los Angeles residents. The 1991 Christopher Commission, which studied the LAPD following the beating of Rodney G. King, accused the department of fostering a culture that “isolated the police from the communities and the people they serve.”

Under the new program, which Hansell said would be the first of its kind in the nation, police and firefighters would be able to buy homes with no, or very small, down payments. The loans’ interest rates would be below market rates--at least half a percentage point better, Hansell said.

The program is an outgrowth of other city and federal loan packages offered to police and firefighters in recent years. But unlike one previous effort to entice LAPD officers, the new program does not require that they purchase homes in economically distressed areas.

Mayor Richard Riordan, who also has been seeking to lure more LAPD officers into the city as homeowners, helped Hansell bring in lenders to work with the city.The two giants of the mortgage industry--the federally chartered Fannie May and Freddie Mac--have agreed to sponsor the project.

Riordan said he would like to expand the loan program in the future to the city’s schoolteachers.

Hansell said the loan incentives would be available to officers and firefighters from the bottom of the salary scale to the top. Most of the loan options do not put taxpayer money at risk, he said. Under one option, however, the city guarantees about $600,000 in loans for second mortgages used for as many as 275 down payments. The entire program has other direct costs of about $95,000.

Providing the officers and firefighters have good credit and the ability to repay, so-called jumbo loans over $227,100 can be obtained.

“There has been a lot of interest in the department for this,” Hansell said. “Perhaps this is a dream, but I would like to see 1,000 more officers move into the city under this program.”

He said there is no limit to the number of officers and firefighters who would be allowed to apply.

Police union officials, who represent most of the LAPD’s 9,700 officers, also support the proposal.

“It sounds like a worthy program for officers who want to live in the city,” said Dave Hepburn, president of the Los Angeles Police Protective League. “I’d like to see it apply to anywhere the officer would like to live, but obviously that’s not going to be the case.”

Hansell said the proposed program provides “credit and debt-management” services for applicants with poor credit histories. After completing an 18-month credit program, the officer or firefighter would be able to obtain a home loan with only a 3% down payment.

While the state’s constitution prohibits residency requirements for public employees, other states allow such rules.