Activists Urge Los Angeles to Use Eminent Domain to Save City’s Affordable Housing

"Eminent domain is not something that L.A. has been shy about using. It’s just never used to help poor people.”

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Leslie Hernandez has lived in Hillside Villa apartments for almost thirty years. She moved into the 124-unit building in Los Angeles’s Chinatown with her parents and her older sister in 1991, when she was six years old. The building was still relatively new when the family moved in, and because of public subsidies that the developers received when building it, it was subject to requirements to keep about half of the units affordable for low-income families. Hernandez’s family lived in one of the market-rate units, but used a Housing Choice Voucher to be able to afford the rent. Her parents have both since passed away, and her sister has moved out, but she still lives in the same two-bedroom apartment she grew up in. Some of her neighbors have become like family.

The affordability requirements at Hillside Villa expired a few years ago, and the landlord, Thomas Botz, is planning rent increases this fall. Some of the increases would be drastic — from around $850 a month up to $2,500 for one unit, according to tenant organizers — and they would mean almost certain displacement for some residents. For about a year, the Los Angeles Tenants Union has been organizing with Hillside Villa residents and encouraging officials to take steps to preserve the building as affordable housing. Last spring, tenants began demanding that the city seize the building by eminent domain. Initially, the local city councilmember, Gil Cedillo, tried to strike a deal to extend the affordability restrictions with Botz, who still owes the city around $5.4 million from a loan the developers received to construct the building, according to reports. But that deal fell apart in December, as several outlets reported. And at the end of January, as organizers were getting ready to make another push for seizing the building, Cedillo surprised Hernandez and others by beating them to the punch, filing a motion to initiate eminent domain proceedings for Hillside Villa.

Los Angeles has thousands of apartments with affordability restrictions that have begun to expire. (Around the United States, there are hundreds of thousands more.) Up and down the west coast, a shortage of affordable housing is driving people into homelessness, even without the prospect of sudden rent increases on thousands of affordable units. Policymakers are scrambling to find ways to preserve affordable units, and to build new ones. Is eminent domain a solution?

Eminent domain is the power of government entities to take private property for public uses, rooted in the Fifth Amendment to the U.S. Constitution, and requiring “just compensation” for any seizure. It’s commonly associated with the widespread “slum clearance” of the Urban Renewal era, but it’s still used regularly today, including in the service of affordable housing. In 2015, for example, the Philadelphia Housing Authority took 1,300 privately owned homes through eminent domain as part of a $500 million plan to build new public housing in North Philadelphia. In the last few years, New York City Mayor Bill de Blasio suggested that the city would use eminent domain to acquire certain buildings to house the homeless if it couldn’t negotiate a deal to buy them from their owners. (Last year, Curbed NY reported that the threat of eminent domain resulted in at least one large purchase — the city bought 17 buildings that will provide permanent housing to 1,200 formerly homeless New Yorkers.)

“The question comes down to, in terms of the right to take, whether it’s for a public use or purpose,” says James Greilsheimer, a lawyer at Kramer Levin in New York, who has represented clients whose buildings are being seized, as well as some entities doing the seizing. “And to provide affordable housing to people who live in a community where there may be a shortage of housing at reasonable prices can be a public use.”

Botz, who owns Hillside Villa, says that the building is not for sale, and that he’ll challenge the city’s attempt to take it in court. But Greilsheimer says that in most cases, the government’s authority to take property is fairly clear, unless the owner can show some impropriety on the city’s side — “something corrupt or fraudulent or something being done in bad faith,” he says. And governments have broad latitude to determine what is a public purpose. Greilsheimer says he once helped a school authority in Queens acquire an adjacent property to finish building its football field, which needed an extra 20 yards to be complete.

The proposal to seize Hillside Villa is notable because the owner doesn’t want to sell, and because of what it might mean for the many other buildings with similarly expiring affordability requirements. But government agencies do use eminent domain to preserve privately owned affordable housing in some cases. The King County Housing Authority in Washington regularly shops for buildings where affordability restrictions may be set to expire, as well as for “naturally occurring” affordable housing that it wants to preserve, says Dan Watson, deputy executive director for the King County Housing Authority in Washington.

“We have used the threat of eminent domain as a way to encourage owners to sell properties to us, particularly properties where we believe there to be affordable housing that will be lost if we do not acquire the property,” Watson says.

Often, the threat of eminent domain is enough to bring property owners into negotiations to sell a building, Watson says. But in some cases, the authority has taken properties all the way through the process. For owners who are willing to give up ownership, having a property seized is sometimes “not the worst thing in the world,” Watson says, because the government has to pay fair market value, and cover other costs related to the transaction.

But Botz says that Hillside Villa is “an irreplaceable location,” and he’s not willing to sell. He initially was interested in making a deal with the city to extend the affordability restrictions for another ten years in exchange for writing down the $5.4 million he still owes, Botz says. But as the tenants began holding more protests — spurred on by what Botz calls “outside agitators” in the L.A. Tenants’ Union and Chinatown Community for Equitable Development — he came to believe that the tenants demands wouldn’t be satisfied by another ten years of affordability.

“Basically they’re saying that all apartments should be owned by the government — that’s what they’re saying,” Botz says. “If the city has that much money, they can buy any building they want, or build it, and of course the answer is that the city doesn’t have that much money.”

For Cedillo’s office, using eminent domain to acquire Hillside Villa is a matter of taking advantage of all the tools the city has to address its housing crisis. Conrado TerrazasCross, Cedillo’s communications director, says it would cost much more to build new affordable housing from scratch than to acquire the building and keep the existing tenants from being displaced. He didn’t know exactly how much the acquisition would cost, and Botz wouldn’t say what he thought its value is either.)

Jacob Woocher, an organizer with the Los Angeles Tenants Union, says that Los Angeles, like other cities, has shown a lot of willingness to put public money behind for-profit development projects. The tenants at Hillside Villa are in immediate danger of displacement, and the city should step up to protect them, he says, no matter the expectation it might create for the city to preserve other buildings with expiring affordability restrictions.

“We don’t think [the city] is actually going to use eminent domain to buy 11,000 units and keep them permanently affordable,” Woocher says. “But they should.”

The eminent domain proposal will next be considered by the city council’s housing committee, before being voted on by the whole council. Tenants and organizers are planning to continue holding demonstrations in the meantime to make sure that the city sees the process through. And some Hillside Villa tenants, like Hernandez, say they’re ready to continue fighting alongside organizers to help protect residents of other buildings, even after Hillside Villa’s fate is determined.

“I guess we just really think that the time has come for more radical action to protect tenants and to address homelessness,” Woocher says. “The solutions are right in front of us. Eminent domain is not something that L.A. has been shy about using. It’s just never used to help poor people.”

This article is part of Backyard, a newsletter exploring scalable solutions to make housing fairer, more affordable and more environmentally sustainable. Subscribe to our weekly Backyard newsletter.

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Jared Brey is Next City's housing correspondent, based in Philadelphia. He is a former staff writer at Philadelphia magazine and PlanPhilly, and his work has appeared in Columbia Journalism Review, Landscape Architecture Magazine, U.S. News & World Report, Philadelphia Weekly, and other publications.

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Tags: affordable housinglos angeleseminent domain

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