“Hi, Thelma,” Shao Zhao said Wednesday evening to her longtime neighbor, Thelma Caseres, who was strolling through the courtyard of the Hillside Villa apartments in Chinatown.
Zhao is 23 and was born in China. Caseres is 61 and from El Salvador. But they have something in common: They both are panicked about what will happen when a 30-year arrangement expires that kept rents in their 124-unit building below market rates.
They are just weeks away from being evicted or having to pay far higher rent, as are dozens of their other neighbors. In a region with an affordable housing crisis and armies of people living in vehicles, shanties and tent villages, the future looks alarming.
Zhao and her mother moved into Hillside 12 years ago with a federal Section 8 subsidy, having previously lived in a shelter for victims of domestic violence. Their two-bedroom unit costs $1,495 a month, but Zhao said she fears a rent increase that Section 8 won’t cover, or that they’ll forced into a one-bedroom, so she’s looking for something else.
She told me that her mother, who worked as a seamstress, is not well but enjoys being able to walk to her doctor’s office and the market and speak to friends in Cantonese. Zhao said her mother now lies awake at night, wondering where they’ll end up. Zhao, a Harvard grad working as a paralegal, has searched for an affordable place for weeks, well beyond rapidly gentrifying Chinatown, but all she’s found is frustration.
Caseres, a babysitter and housekeeper, has been at Hillside Villa for 28 years, and she can’t find anything, either. She said she pays $843 a month for a three-bedroom, and her rent is going up to $2,500.
“I’m looking for another apartment, but it’s impossible,” said Caseres, who lives with her sister, Rosa, and a son. “I had a family that was going to rent me a room for $650. But they called and said they can’t, because their family needs it. My sister is going to go back to El Salvador.”
“We can’t build our way out of this,” said Los Angeles City Councilman Gil Cedillo. He’s negotiating with the tenants and landlord of Hillside Villa and has asked the city housing department to do an inventory of units that could be lost and come up with possible solutions.
Today’s situation is the fallout from what seemed like a good idea decades ago, when community redevelopment agencies existed and one of their objectives was to increase the amount of affordable housing. Hillside and other apartments were built with assistance from local, state and federal programs that offered developers low-interest or no-interest loans and other subsidies in return for a promise to keep rents down for a prescribed time — 30 years in the case of Hillside. Now, many of those affordability covenants are set to expire.
Tenants, understandably, feel crushed by the relentless forces of gentrification and profiteering investors. But Tom Botz, the owner of Hillside, makes valid points too. He says he’s simply executing his right to begin earning a full return on his investment. He said he believes low-income renters deserve subsidies, and if the city can find a way to provide them, he’s open to keeping his current renters in place.
“I’m hoping we can resolve it,” Botz said by phone. He was in China, on a Silk Road motorcycle tour that began in Istanbul, according to his attorney Brandon Dimond.
Dimond said Botz and his daughter — a Hillside Villa manager — are being unfairly villainized after years of providing low-rent housing without turning a profit. The buildings with expiring covenants shouldn’t be blamed, he said, for the government’s failure to meet affordable housing goals.
Natalie Minev, a Legal Aid Foundation attorney, has a different take. The 30-year covenant did indeed expire a year ago, she said, but she claims Botz should have pursued options for maintaining the building’s affordable rents. Minev sued Botz two weeks ago on behalf of the Hillside Villa Tenants Assn. — a recently formed uprising of residents fighting to stay where they are — alleging that the eviction notices violated state law.
Some tenants told me they were unaware of an expiring rent-protection covenant; others said they were confused by the language in the notices they began receiving a year ago.
Minev said Botz’s tactics have already led to the displacement of nearly half the tenants, some of whom accepted cash payments to vacate.
“They’re attempting to push out as many people as possible so they can get back on the full market as soon as possible,” said Minev.
Cedillo told me he offered Botz a deal — the city would cancel Botz’s remaining $5-million debt on the building if the owner agrees to keep tenants in their homes at current low rates. Voter-approved Proposition HHH, an affordable housing initiative, may end up providing only 7,500 new units for $1.2 billion, Cedillo said. If waiving debt on buildings with expiring affordability covenants is a cheaper way to keep people from becoming homeless, the councilman said, the city has to seriously consider that option.
But Dimond disputes that Botz still owes $5 million on the building, which has layers of complicated financing. Dimond said his counteroffer is to keep rents at the current rate for three years in return for waiving debt.
Negotiations are ongoing.
Whatever happens at Hillside, California has a massive, unchecked crisis — a storm of rising real estate prices, low production of new units and flat wages for working folks. Danielle Mazzella of the California Housing Partnership said the state is about 1.5 million units short on homes for those who earn half the median income or less. Los Angeles County has one-third of that shortage and lost 70% of its state and federal housing money in the 10 years ending in 2018.
The partnership has recommended the statewide preservation of affordable units such as those at Hillside, more tenant assistance, more housing vouchers and better alignment of state and county resources.
Following a year in which several housing bills died at the state level, Cedillo said he supports new legislation, Senate Bill 5, which aims to produce more affordable housing for seniors and middle- and low-income Californians.
But even if the bill were to eventually pass, it won’t be in time to help those in trouble right now.
At Hillside, Shao Zhao and I walked up the stairs to her third-floor apartment. She avoids the elevator because it often breaks down. There were photos of Zhao and her mother on the wall, along with her framed Harvard graduation certificate.
In an essay she wrote about the situation, Zhao said that gentrification seemed like more of an academic, abstract idea when she was younger. After college, she understood it differently, as the face of Chinatown changed, new eateries moved in and rents climbed. She’d like to go to law school at some point, but now she devotes her free time to finding a place to live.
“I’ve looked at a lot of apartment websites, I’ve walked around Chinatown, Angelino Heights, Echo Park and Koreatown taking down numbers, making a lot of phone calls and getting a lot of Section 8 rejections,” she said.
And time is running out.