Tenants in L.A. Asked the City to Buy Their Building. Surprisingly, the City Agreed

In a major win for residents of an affordable building in L.A.’s Chinatown, the city will bid on the 124-unit apartment complex to prevent a drastic rent increase.

The Hillside Villa Apartments in Los Angeles' Chinatown (Credit: Google)

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Leslie Hernandez has lived in Hillside Villa Apartments, an affordable housing complex in L.A.’s rapidly gentrifying Chinatown, for her whole life. She lives in the same unit she once occupied with her parents, who have since passed. Some of her neighbors are family members, and many she has known since childhood. She remembers when her neighbors learned, in 2019, that the building’s 30-year affordability covenant was elapsing and that rents would be raised between 100-200%. Neighbors she had known her whole life were distraught, worrying they would have nowhere to go. She and her neighbors immediately started organizing to ensure that didn’t happen.

“It got me angry, I was very upset. And that’s when I said no, we can’t keep our mouths quiet,” Hernandez said in a 2020 Zoom meeting with fellow tenants and organizers.

On May 27, that organizing paid off. The Los Angeles City Council voted to take out a loan to purchase the Hillside Villa Apartments and keep them affordable. The vote was unanimous — 12 council members voted yes (three were absent). It represents a huge victory for the Hillside Villa Tenants Association, which has fought against the landlords’ stark rent increases for the past three years. It is also a bold approach from L.A. City Council that will test the city’s ability to intervene on behalf of tenants facing displacement by pulling housing from the private sector.

It could also present a potential way forward for the city’s many other affordable housing units slated to lose their affordable housing status. According to a November 2019 Mckinsey report, there were 10,000 units of affordable housing across Los Angeles with affordability covenants set to expire by 2023.

Annie Shaw, an organizer with Chinatown Community For Equitable Development, a tenant rights organization providing Hillside Villa tenants with support, says there were two other properties in Chinatown whose affordability covenants expired recently. But landlords of those buildings were willing to work with tenants and extend their affordability. “The only difference was the landlords were more cooperative,” Shaw says, “but it’s very piecemeal.”

The Hillside Villa Apartments were constructed in 1989 as 124 units of affordable housing. Hernandez, who grew up in the complex, says the building’s management became more strict when the current owner, Tom Botz took over the building (That happened around the year 2000, according to Knock LA.) As a child, Hernandez and her neighbors would play with water balloons, skate or use bicycles and in the courtyard. But when Botz took over, he forbid those activities.

“They actually ended up putting signs up there. We weren’t allowed to use bicycles or roller skates, skateboards, scooters, anything like that,” Hernandez says. “The manager would see the kids playing ball downstairs, they would take the balls away from the kids.” After threats of eviction, she says children were scared to play outside. Next City reached out to Tom Botz for comment for this article but did not hear back by press time.

In 2017, two years before the affordability covenant elapsed, Botz also began charging tenants for parking, something that had otherwise been free, Hernandez says.

In 2019, tenants began receiving notices saying that their rent would increase that June after the city’s affordability covenant elapsed. They formed the tenant association in early 2019 in response, sending a letter with demands to management. Rents jumped between 100% and 200% anyway. The tenant association then entered a rent strike, refusing to pay the hiked-up rents.

Botz began offering tenants buy-outs. Hernandez says the landlord’s daughter would knock on people’s doors at all times of day, asking if they could afford the new rent amounts and presenting them with new leases. If tenants said they couldn’t afford the new rents, Botz offered money to find a new apartment; around $3,000 at first, Hernandez says, but Botz gradually increased his offers. Shaw estimates that about 10 families, frightened of eviction and intimidated by Botz’s tactics, took the money and left.

“Every day either they were knocking on your door or they were calling you into the office … to pressure you,” Hernandez says.

Botz had other methods for displacing tenants. To get around the pandemic eviction moratorium, in 2021 Botz served three-day eviction notices linked to overdue rent from before the pandemic. In at least one case, the tenant had since paid that rent but still got an eviction notice, according to Knock LA.

Botz wanted to raise Hillside Villa rents to match the local rents in Chinatown, which has undergone years of luxury housing development. But Shaw says a survey produced by tenants found that Botz filled no vacancies in priced up “market rate” apartments.

“What he has failed to notice is that those buildings marketed as luxury buildings, they have swimming pools, they have little dog parks, bowling,” says Hernandez, noting amenities that would justify the much higher rents Botz wished to charge.

Botz then switched to a new strategy: replacing low-income tenants with new low-income tenants who had Section 8 vouchers. Because Section 8 voucher recipients are only required to pay between 30-40% of their income with the federal government covering the rest, Botz was able to raise rents higher than what middle-income tenants were willing to pay. Shaw estimates that 40% of the tenants in Hillside Villa had Section 8 vouchers prior to 2019. A letter written by Botz’s lawyer to the City Council states that 71 of the 124 units are now occupied by tenants with Section 8 vouchers, or about 58%.

Hillside Villa Tenant Association tried several strategies to prevent evictions. They convinced their council member, Gill Cedillo, to negotiate with Botz on keeping the building affordable for another 10 years. But Botz did not budge. Hernandez says outside organizers working in coalition with the tenant association then raised the idea of pushing for the city to purchase the apartments through eminent domain.

“Honestly, the majority of us didn’t not know what eminent domain was,” Hernandez says. “They did tell us that it was going to be a very difficult step to accomplish. But they told us that it wasn’t impossible.”

When first proposing the idea of purchasing the building to city officials, they were immediately shot down, Hernandez says. “They honestly thought that we were crazy,” she says.

Shaw says traditional forms of lobbying like phone calls and scheduling meetings went nowhere. Organizers shifted to more aggressive tactics. “They had to escalate, they were left with no choice,” Shaw says.

Tenants set their sites on City Councilor Gil Cedillo. A year ago they bombarded Cedillo’s office with phone calls, tweets, emails and facebook messages. In one action this past April, tenants approached Cedillo as he entered a private fundraiser, urging him to schedule a vote on the eminent domain plan. (Requests for comment from Cedillo’s office were not returned.)

The lobbying process was exhausting, Hernandez says. “A lot of times, I tried to throw in the towel because I felt emotionally, physically, mentally, I’ve had enough of protesting,” she says. “What convinced them was our hard work, our research, us not letting them, us not accepting no for an answer.”

After multiple City Council hearings, a September 2021 Budget and Finance Committee Meeting required the L.A. Housing Department (LAHD) to issue recommendations. Released in early May, the recommendations said the city should provide an updated appraisal on Hillside Villa and authorize LAHD, together with the city’s public housing authority (HACLA), to make a purchase in that amount.

The May 27 vote, brought by Gil Cedillo, determined the Council would adopt those recomendations and authorize a loan to pay for the property. In addition to the loan, the property’s purchase and rehabilitation would be financed by tax-exempt bonds and Low-Income Housing Tax Credits.

When the vote took place, City Council chambers were filled with members of the tenant association, clad in red t-shirts. Tenants spoke in Spanish and English about anxiety and depression triggered by the rent increases. One tenant testified that he had not been told about the affordability covenant in the 26 years he’d been living in Hillside. He said that his rent was originally $1,063 with $50 parking and $50 for his pets. He received a notice in early May that the landlord wanted to raise his rent to $2,660, along with $100 for parking. When he said he couldn’t afford it, the landlord told him to take a Section 8 voucher to pay for the unit, something that would require a years-long wait as long as the building is in private ownership.

When votes were cast, tenants erupted into applause. “A lot of us cried. It was extremely emotional,” Hernandez says. “We’re still in shock.”

The city will make an offer to the landlord based on an assessment of the property’s value. If the landlord declines, the Council could purchase the property by eminent domain, although this would require another vote. (While electeds were concerned about the use of eminent domain to secure affordable housing, there may be some poetic justice if it comes to this: Some of the residents of Hillside Villa had been evicted through eminent domain in the 1980s during an expansion of the Los Angeles Convention Center.)

Either way, the apartments would then be owned by the city’s public housing authority and kept permanently affordable, and Section 8 vouchers would be secured for tenants who do not have them. While Section 8 vouchers are in short supply due to federal limitations, buildings owned by public housing authorities do not have the same restrictions.

According to HACLA’s Chief Development Officer Jenny Scanlin, the city and HACLA will over the next few weeks enter into a formal agreement, codifying a plan to purchase the apartment building and choosing an assessor. Most assessments take at least six weeks, she says, and the entire process of purchasing the apartment could take a few months.

“It’s not going to happen tomorrow, unfortunately,” Scanlin says.

Hernandez says the tenant association wants the property transferred to nonprofit ownership and converted either to a community land trust or a co-op so that tenants can have control. Scanlin says this is not the plan at this time.

Tenants still have a fight on their hands. If Botz chooses not to sell to the city, there is a chance the Council will hesitate to authorize eminent domain. Botz is also mounting a legal challenge to the city’s plan.

In an eight-page letter to the City Council, Botz’s lawyer contested how many tenants were at risk of displacement and repeatedly asserted that the city should just issue more Section 8 vouchers to tenants to solve the problem. But there is a federal cap on Section 8 vouchers for private rentals; something highlighted in the city’s report. “Although HACLA’s ability to commit vouchers to specific projects is limited by the national cap of 30% of the portfolio, the cap does not apply to buildings owned by the housing authority,” according to the report.

The attorney’s letter did not dispute a city-initiated census of the building’s income levels, which showed 85% of tenants were making less than 80% of the area median income.

Hernandez says the building manager has, in the few weeks since the vote, called tenants and accused them of lying at the City Council hearing.

She says she’s concerned about Botz’s legal challenges, but hopes that any judge overseeing the case sides with tenants. “We’re trying to keep a building affordable,” she says. “I wouldn’t understand why a judge would deny that. Especially if they know that so many families could potentially be homeless.”

“We are very realistic that that could be a possibility,” Hernandez says of the challenge. “but we are ready to continue fighting.”

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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Roshan Abraham is Next City's housing correspondent and a former Equitable Cities fellow. He is based in Queens. Follow him on Twitter at @roshantone.

Tags: affordable housinglos angelescity councils

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