HUD to Pay Full Relocation Costs

The U.S. Department of Housing and Urban Development on Monday said it is reversing a controversial eviction policy and now will pay full relocation expenses to residents being forced to move from its foreclosed Los Angeles properties.

The Times reported Saturday that the agency had been taking advantage of a loophole in Los Angeles’ rent stabilization ordinance to evict mostly low-income renters from foreclosed homes without providing the relocation aid that private landlords normally pay. HUD’s tactics had drawn criticism from local lawmakers and tenant advocates.

Federal housing authorities in Washington said Monday that the plight of the tenants and the number of cases had prompted them to rethink their position. Although scores of tenants still will be evicted so the foreclosed buildings can be resold vacant, the renters will receive up to $5,000 in relocation costs plus more time to move, the HUD officials said.

In addition, the tenants will get the first right to purchase the properties, which range in size from one to four rental units.

“It’s a new issue for us and it warrants us clarifying our policy,” said Matt Franklin, associate general deputy secretary for housing in HUD’s Federal Housing Authority. “It’s our intention to pay relocation assistance in accordance with the city’s rent laws and to help these people move on.”

City officials and tenant advocates had stressed the irony that part of HUD’s mission is to help poor and working families in the difficult search for affordable shelter. After Monday’s reversal, they said they were pleased with the outcome.

“If it’s true, it lifts a huge burden off of me and my clients,” said A. Christian Abasto, an attorney with the Legal Aid Foundation of Los Angeles, one of the groups fighting the evictions in court. “They will be very pleased that they don’t have to fight these unlawful detainer actions in court, which can be a lot of hard work for them.”

Marc Bender, an attorney with the legal aid group Bet Tzedek, added: “For an elderly, low-income person, $5,000 is a world of difference. It’s wonderful.”

Rod Field, an attorney with the Los Angeles Housing Law Project, said the reversal was significant because it also might allow some of his clients to try to purchase their buildings.

The news was also a welcome relief to Angelina Estrada, a 68-year-old great-grandmother who had been given a 30-day notice to vacate her home of 23 years with no relocation aid. Her time was supposed to be up Monday. But HUD called her to tell her she would have more time and would get $5,000 in moving expenses.

“Before, they said they were going to come in and close our doors so we couldn’t get in, but I’m not that worried any more,” said Estrada, who rents a three-bedroom, rent-stabilized house on 23rd Street south of downtown for $325 a month. “I’m still waiting to see what’s going to happen but I feel OK now.”

The prospect of poor tenants losing their homes with little or no recompense had angered lawmakers, who complained that HUD’s policy was unfair. Although satisfied with the agency’s turnabout, Councilwoman Jackie Goldberg said she nonetheless will press forward with a motion to amend the city’s rent ordinance to include HUD and other government agencies, which are now exempted.

Goldberg said she will also offer an emergency measure at today’s City Council meeting to ensure that HUD protects those tenants who face imminent eviction.

“I don’t want to worry about this coming up again,” Goldberg said of her proposed amendment. “I appreciate the action [HUD] is taking, but we want to work together to have a city policy in place that will back up tenants’ rights.”

Goldberg said she has also asked local HUD authorities to meet with city officials, legal aid attorneys and tenants to formulate a clear policy to address future housing disputes.

Tenants in private, rent-stabilized housing units under the city’s 1979 rent ordinance typically are protected from eviction and are guaranteed relocation fees when a property is taken off the rental market. Families with children under the age of 18, the disabled and those over 62 qualify for $5,000. Others receive $2,000.

Housing officials said HUD traditionally had acquired very few properties occupied by tenants and had usually let banks handle the evictions, reimbursing them for relocation costs. But the disputes arose after HUD in recent months assumed the titles to an increasing number of local properties after defaults on loans backed by the agency. The number of such recent cases in Los Angeles has swelled to at least 115, Franklin said.

Federal authorities blamed the controversy on the lenders: banks, savings and loans and thrifts that assume title when an owner defaults on a loan. Several lenders failed to follow proper eviction procedures and had misrepresented agency actions before handing the buildings over to HUD, officials said.

Franklin said the agency is reviewing the cases and may seek penalties, including civil fines, against the offenders.