L.A. Is Still Waiting for Help on Slum Housing

By any definition, the Grandview Arms apartment building at 1200 S. Hoover St. is a slum. But Florina Sanchez doesn’t have a lot of options. She is poor. She is trying to raise her children in the dank, dilapidated, disgusting conditions at the Grandview Arms. The plumbing leaks so often and so badly that the carpeting (tattered as it is) never dries out.

Earlier this year, Sanchez’s baby, Kimberly, had a respiratory infection that simply wouldn’t clear. Then, one night, Kimberly died. She was 11 weeks old to the day.

Sanchez believes it was the slum conditions at the Grandview Arms that killed Kimberly. This mother’s heartbreaking story mobilized a number of people and institutions in the community. Latham and Watkins, one of the premier law firms in the city, worked with the Inner City Law Center and students from the UCLA law school to file a lawsuit against Henry Pun, the owner of the Grandview Arms. The Los Angeles city attorney filed a criminal proceeding; on Aug. 20, Pun began serving a 45-day jail term that included 30 days for the conditions that existed at the building.

Judge Pro-tem Bruce Mitchell appointed a receiver to take control of the building and authorized the receiver to borrow $75,000 to make the urgent repairs: activate the fire alarm system, make the elevator operational, kill the rats and roaches in each unit, etc. The judge said that this loan would be the first to be paid of the mortgages against the Grandview Arms. Everyone believed that it would be a “no brainer” for a bank to make this loan. It would be good economics, good community relations and good public relations.

As the receiver appointed by Judge Mitchell, I approached a number of major financial institutions in the city of Los Angeles about making the loan. Some banks didn’t even have the courtesy to respond. Others rejected the proposal outright. Still others considered the proposal before rejecting it. But after three months of intensive effort, I was not able to get one bank to make this loan. I was given almost as many excuses as the number of banks I approached. But the bottom line was that no bank would finance the cleanup of the Grandview Arms.

Much as I hate to use this word, the conclusion is inescapable: The banks have redlined these types of properties in these areas of the city. They simply won’t make the loans, period, no matter how little the risk.

What makes me see red about that redlining is the scene in May 1998, when 12 banks stood with Mayor Richard Riordan and members of the Los Angeles City Council to announce a $150-million pledge to clean up slum housing in Los Angeles. The participants included Wells Fargo Bank, Bank of America, Washington Mutual, Union Bank, etc.

I was there that day. It was good news for the Los Angeles area, where, according to the most recent U.S. Census Bureau survey, there are roughly 156,400 substandard apartments. Everyone was patting each other on the back. Everyone felt good. Everyone had quotes for The Times.

But the sad truth is that in the ensuing months, not one dime of this commitment has been disbursed. Not to the Grandview Arms and not to any other effort to clean up slum housing in Los Angeles. The banks have a lot of excuses, but they cannot refute that simple fact. Nor can they shrug off their commitment by asserting they are merely making prudent lending decisions based on the physical condition of properties. Fact is, banks and other lending institutions get billions of dollars of federal help when they need it, and that gives them a special responsibility to their communities that they are failing to fulfill.

Meanwhile, there are more babies like Kimberly Sanchez whose lives are in danger.