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Can Eminent Domain and COVID-19 Funds Save Affordable Housing in L.A.’s Chinatown?

Advocates hope the use of eminent domain can become a new model for generating affordable urban housing.

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Benson Lai in the courtyard of Hillside Villa. (Photo by Jack Ross)

Leslie Hernandez used to stay up late in the Hillside Villa’s central courtyard, playing with the other kids in the Los Angeles affordable housing complex. In the summers of the 1990s they had water fights and played baseball on the front lawn. Their families grilled together. Sometimes the kids took skateboards outside 636 North Hill Place and bombed down the steep road to Chinatown.

More than three decades later, Hernandez is one of the last of her childhood  friends still living in the 124-unit building, but every week she returns to the courtyard, where the Hillside Villa Tenants Association assembles for meetings conducted in English, Spanish and Cantonese. (The recent COVID-19 spike has forced meetings onto Zoom.)

In 2018, a 30-year affordable housing agreement expired at the Villa, and landlord Tom Botz issued one-year notices to tenants that their rents would rise to market rate. The tenants organized and lobbied the city to intervene; this month, the city council will decide whether to acquire the building through eminent domain, keeping it permanently affordable as public housing.
 


Cities frequently use eminent domain to acquire properties for “public good,” but rarely to build public housing.


 
Some residents face 200% rent increases. In 2019, L.A. agreed to pay Botz $12.7 million to maintain the Villa’s affordability agreement for another 10 years. He backed out of the deal.

It’s the city’s consideration of eminent domain that makes the Villa dispute significant. Cities frequently use eminent domain to acquire properties for “public good,” but rarely to build public housing. Acquisition of the Villa would be a major win for the nascent PHIMBY movement — “Public Housing In My Backyard” — which advocates for government intervention in the housing market, as in Paris, where mayor Anne Hidalgo wants 30% of the city publicly housed by 2030.

Ananya Roy, a professor of urban planning at the University of California, Los Angeles, says L.A.  must use eminent domain to beat its housing crisis. The city’s ability to meet its housing goals “will rest on the public acquisition of land and property,” she wrote in an email.

In Los Angeles, however, eminent domain is associated with Dodger Stadium — which is to say, with theft from people of color: In the 1950s, the city seized properties from Chicano families in Chavez Ravine, originally for Richard Neutra-designed public housing, until Mayor Norris Poulson was elected in 1953. Poulson considered the project un-American, and the city pivoted to baseball. You can see the stadium from the Villa roof.

Councilmember Gil Cedillo first called for eminent domain purchase of the Villa in January, and this month proposed the city finance the acquisition with its remaining CARES Act money. Los Angeles received nearly $700 million from the federal government to combat the COVID-19 crisis last spring, and around $43 million remains.

On December 8, the council rejected a report from the City Administrative Officer that called the Villa ineligible for the remaining CARES Act money, and will vote on an eminent domain acquisition later this month. In an email to Capital & Main, a spokesman for Cedillo said the report was “unsatisfactory and inadequate.”
 


City Councilmember Gil Cedillo has proposed L.A. finance the acquisition of Hillside Villa with its remaining CARES Act money.


 
If unused, the $43 million will return to the federal government on December 30, and the Tenants Association says the council faces an obvious choice between spending the funds on the Villa or not spending them at all. However, Councilman Paul Krekorian emphasized last week that unspent money will be used to reimburse already-approved COVID-related expenses, as the city faces a $675 million budget deficit.

Cedillo must win over his concerned colleagues if the Villa tenants are to receive their building for Christmas.

*   *   *

Benson Lai moved into the Hillside Villa in 1988, 10 years after his family fled anti-Chinese persecution in reunified Vietnam. Lai, his parents and his two brothers spent years in Filipino refugee camps, then made their way to the United States on their own, as refugees. Though his parents have passed away, Lai still occupies their apartment with his brothers.

In 2018, Hernandez ran into Lai in a hallway as she knocked on doors, organizing her neighbors to fight the rent increases. Unable to explain to Lai that he didn’t have to leave, she showed him an increase notice and tore it in half.

Lai and his brothers had argued for days over what to do until he ran into Hernandez. “We were really, really stressed,” he said through a translator. Initially they couldn’t even read the notice, which Botz did not translate into Cantonese, but Lai grew worried when he saw two numbers swimming in the English text: $800, their current rent, and next to it, a new figure, $1,950.

Taking the increase would be si lu yi tiao, a “road to death,” he said.

That Botz distributed increase notices only in English led directly to the founding of the Tenants Association, according to its president, Rene AlexZander.

“A lot of our tenants don’t speak English, and they were saying, ‘What does this all mean?’” he recalled. “Before you knew it, we had an association.”
 


“I think the odds are very, very, very good that if the city did it right, and made the case factually, they would be able to get the property.”

~ Gary Blasi, public interest law professor, UCLA

 
On March 27, the council directed the city administrative officer to appraise the Villa’s market value, which came back this month at nearly $46 million.

“I think the odds are very, very, very good that if the city did it right, and made the case factually, they would be able to get the property,” says Gary Blasi, a public interest law professor at UCLA. “Eventually it’s a jury trial to determine how much money is paid.”

The deadline is punishing, but the city could take pretrial possession of the Villa if it deposits sufficient finances, he says.

Botz insists the building is not for sale. He declined to be interviewed for this article but told the Los Angeles Times the appraisal was “way inaccurate.”

That Cedillo proposed eminent domain at all may indicate changing attitudes toward the tactic as an affordable housing solution. A $46 million acquisition would cost the city approximately $371,000 per unit in the Villa, while construction and development regulations mean new units can cost the city $500,000 or more.

“It’s never been done, what we are trying to do,” says Hernandez, who worked as a babysitter until the pandemic, but now wants to organize tenants full time. “We don’t want to stop with us. Once this is over with us, we are willing to fight for different buildings.”

In conversations with the Los Angeles Times editorial board, then-Councilman Eric Garcetti once compared eminent domain to Tolkien’s Ring: “Awesomely powerful and tempting, indispensable in a pinch but ultimately corrupting and to be avoided when possible,” the Times paraphrased in 2007.
 


Daniel Yukelson, executive director of the Apartment Association of Greater Los Angeles, says eminent domain will lead to disinvestment by private developers.


 
In recent years, however, lawmakers in Philadelphia have turned to the Ring, using eminent domain to acquire affordable housing, and in New York, Mayor Bill de Blasio used the threat of eminent domain to acquire 17 properties for housing. (The city never had to officially open proceedings.)

Daniel Yukelson, executive director of the Apartment Association of Greater Los Angeles, which lobbies on behalf of landlords, says eminent domain will lead to disinvestment by private developers — a group already, in his view, besieged by COVID-19 eviction restrictions.

“It’s not fun to be a landlord these days, that’s for sure,” he said over the phone from Los Olivos, a wine country town north of Los Angeles. “The only thing they haven’t done is paint us with a horn and tails.”

But Yukelson does not outright oppose Cedillo’s plan.

“If there’s a meeting of the minds, and a fair price paid to the owner, I don’t see any harm in it,” he says.
 


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