Imagine it’s Sunday morning and you want to treat your family to omelets for breakfast. You discover that you are short three eggs. Would it make sense to throw away the eggs you have in the refrigerator before you go to the store to buy more? That’s what we are doing when we tear down apartments to build condominiums. We’re throwing away the very thing we have a shortage of.

Since 2001, Los Angeles has lost over 11,000 apartments to demolition and condominium conversions. And, the trend is escalating: over 1,200 apartments lost in 2004 and a whopping 7,000 units since 2005. At the current pace even more apartments will be lost in 2006. These figures do not include evictions from apartments built after 1979. To put these numbers in perspective, during this same period we have built about 12,800 new affordable apartments. The conversions and demolitions have left us with only a slight net gain of affordable apartments, despite hundreds of millions of dollars government investment.

Although we need the new apartments and condominiums, it doesn’t make sense to tear down perfectly good housing in the middle of a housing shortage. Rather, we should have policies to encourage developers to put their money into building new condominiums or apartments on vacant lots, surface parking lots, and sagging commercial corridors. That way, their investment can actually contribute to solving rather than aggravating the crisis.

In June 2006 the Los Angeles City Council held three well attended public hearings on the condo conversions. Low income and middle class renters alike stood to tell their stories of being evicted from their homes and paying hundreds of dollars more each month in their new apartments. The bulk of the demolitions are on the Westside (Council District 11 & 5), Koreatown (Council District 10) and in the San Fernando Valley (Council District 2). Los Angeles City Council Member Bill Rosendahl introduced has called for a moratorium on condo conversions in his Westside district – Council District 11.

Stopping Conversions When Vacancy Rates Are Low

Led by the Coalition for Economic Survival, tenant groups and Housing LA are fighting to stop condo conversions and demolitions of apartments. The first victory was getting the City to enforce a local ordinance to curb condo conversions that had been on the books for 25 years. The long-standing, but little-used, ordinance gives the Planning Department the power to deny applications for condominium conversion if the rental vacancy rate falls below 5%. In November 2006, the Los Angeles City Council approved a motion by Councilmember Herb Wesson directing the Planning Department to enforce the provision. In a huge victory for tenants, the City Planning Department had begun denying some requests for condo conversions using the vacancy rate trigger by February 2007.

Curbing Demolitions

To address demolitions, the City Council has directed the Planning Department to draft an ordinance that will allow the City to deny demolition permits when vacancies fall below 5%. The new demolition ordinance should be heard in PLUM in late March 2007. Tenants have put forth additional approaches for curbing demolitions such as only approving demolitions when it is clear how the property will be developed in order to avoid blight and vacant lots, an approach used by Beverly Hills. The City can also limit demolitions on an annual basis.

Raising Money to Replace Lost Apartments

The Planning Department has proposed raising the paltry $500/unit Rental Housing Production Fee that it levies on condo conversions for the purpose of developing affordable housing. The Planning Department recommended raising the fee to just under $1,500/unit. At this level it would take losing over 160 apartments to collect enough of a fee to finance one new apartment. Instead tenant advocates have called for a much higher fee that is closely aligned with the actual cost of building replacement apartments. The Planning Department will be hiring a consultant to help them figure out what the fee should be.

Raising Relocation Payments for Displaced Tenants

A great deal of the discussion and action around condo conversions has centered on increasing tenant relocation fees. Tenants who are evicted as a result of conversions or demolitions often end up paying two to three times as much in rent. While increasing relocation is important and will help tenants, it will not stop conversions and demolitions unless the fees rise to the range of $40,000 - $50,000/unit. The City Council is poised to approve increases in relocation that, while substantial, are nowhere near the range needed to prevent tenants from being displaced. The proposal before the City Council, by Councilmember Wesson, is to increase relocation fees based on the length of tenancy, income and family composition of the tenants. There are four different proposed relocation amounts:

	Tenant	“Qualified Tenant” (senior, disabled, family with children)
Lived in apartment less than 5 years	$6,800	$14,800
Lived in apartment more than 5 years	$9,000	$17,000
Low Income (<80% AMI)	$9,000	$17,000

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