The Los Angeles City Council Tuesday voted to reject a report that stated it cannot purchase a long-sought Chinatown residential complex for low-income families by using more than $45 million in federal COVID-19 relief funds.
City Administrative Officer Richard Llewellyn gave the report on the purchase proposal, stating that he does not think the Hillside Villa Apartments will be eligible for purchase per the federal guidelines.
“It should also be noted that the original motion related to the consideration of the proposed acquisition of the occupied property was introduced on Jan. 31, 2020, and predates the COVID-19 public health emergency which started on March 1, 2020, and therefore, the acquisition is an ineligible use of (coronavirus relief) funds,” the CAO report stated.
Councilman Gil Cedillo, who authored the proposal to purchase Hillside Villa, convinced the council to vote to reject that report, with a 12-3 vote.
“I know this is an extraordinary matter, we are in extraordinary times, but I think this is the most appropriate way to move forward,” Cedillo said. “This condition existed prior to the pandemic, but so did homelessness. I don’t think we have to wait until these people are evicted.”
The councilman said he plans to file additional motions regarding the proposed purchase.
Cedillo’s proposal would have Los Angeles departments allocate their coronavirus relief funds to acquire the Hillside Villa Apartments, where tenants have seen substantial rent increases.
The Hillside Villa Apartments is a 124-unit affordable housing development, located in the Chinatown neighborhood at 636 N. Hill Place. The apartments were constructed with loan assistance from the then Community Redevelopment Agency of Los Angeles.
In exchange for the loans of about $5.5 million, a 30-year affordable housing covenant was negotiated with the property owner. That agreement expired in August.
Tenants were paying around $900 to $1,200 a month but are now looking at rent increases of up to $3,200 a month. Numerous families and senior citizens will be vulnerable to market-rate rent increase, Cedillo said.
Some public speakers during the meeting urged the council to move forward with the purchase and noted that the Coronavirus Aid, Relief and Economic Security Act funds need to be spent or allocated for specific purposes by the end of the year and that Hillside Villa is a perfect use for some of that money.
With the purchase, the cost would be about $362,000 per unit, and it’s easier to keep families there who are already living there rather than build new apartments, Cedillo said.
“This is probably one of the most cost-effective purchases that we will engage in,” he said.
Cedillo also said there may be 10,000 units in Los Angeles that are under similar covenants that could expire in the next five to 10 years.
“This is the first of many buildings for which covenants will expire,” he said. “We cannot afford for these (units) to move from affordable housing straight into market-rate during this climate. This will result in displacement throughout the city … we’re talking another 40-to-50,000 people who could be displaced.”
The Housing and Community Investment Department previously reviewed the potential to acquire the Hillside Villa Apartments by eminent domain with the goal of preserving housing for public use.
In September, the Department of General Services commissioned an appraisal of the property that established a hypothetical market value leased fee at $45,695,000, according to Cedillo.