Renter Opposition to New Housing Isn't About Keeping LA Affordable, It's About Self-Preservation (And That's Okay)

A photo from the anti-Build Better LA press conference held at the Yucca-Argyle apartments on July 19th, 2016.

Today the Los Angeles Tenants Union and Yucca-Argyle Tenants Association held a joint press conference opposing the demolition of the Yucca-Argyle apartments, as well as the Build Better LA initiative, which will appear on November's ballot.

To provide a little background, the 40-unit, rent-stabilized Yucca-Argyle apartments will be torn down to build 39 homes for low income households (those earning less than 80 percent of area median income) along with 152 market-rate units. In the grand scheme of things, trading 40 rent-stabilized units—which reset to market rates whenever a tenant moves out, and in a hot market like Hollywood may not be affordable to low income tenants at all—for 39 affordable units and over 150 market-rate units should be a huge win. The low income housing is much more stable than rent-stabilized housing in the long run (affordable unit rents don't reset to market rate when a tenant leaves), and the extra 152 units contribute to resolving the region's tremendous housing shortage. But that's not how the Tenants Union and the Yucca-Argyle residents see it.

To accompany their press event, the two organizations produced a fact sheet titled "Why Tenants Oppose Build Better LA." It was frustrating to read because it's full of half-truths and arguments that, followed to their logical conclusion, would only cause the affordability crisis to worsen.* I could waste a bunch of time debating each statement in the fact sheet, line by line, but would I convince anyone to change their thinking? Probably not.

And here's the thing: the tenants of the Yucca-Argyle apartments are completely justified in their opposition to this redevelopment. 

Does that make this a bad project? Not at all. If we built a few hundred like it each year, the residents of this apartment complex—and the hundreds of people evicted to make way for new construction each year—wouldn't be faced with rents that are so much higher than what they're currently paying in their rent-stabilized units. But that's not the world we live in, at least not yet.

The Renter's Perspective

Here in the real world, the tenants here are being asked to go quietly into the night with a few thousand extra bucks in their pocket—to meekly accept being sacrificed in the name of "progress," which will take the form of more affordable housing for someone else, possibly including people that don't even live here yet. We know that the relocation fees they're paid will not be enough to buy or rent them a similar quality of life for more than a few years (at best), and yet we feign surprise that they could act so selfishly—that they wouldn't be willing to give up their homes and lifestyles in exchange for greater affordability for other people.

Would any of us volunteer ourselves to become the forgotten detritus of a steady, productive, but also inherently destructive march toward progress? I wouldn't, if I could avoid it. I'd demand better.

Think of it this way: Imagine several decades ago that you were a 55-year-old employee of Polaroid or Kodak who had worked there for over 30 years. If you were losing your career in the one field in which you had any expertise, you wouldn't take much solace in the nifty things you could do with those new digital camera gadgets, would you? That may be great for the world at large, but for yourself? No, you'd focus on the fact that your quality of life is going to fall dramatically, and permanently, because it's probably too late for you to start anew. You'd feel angry and frustrated and utterly powerless. No amount of megapixels would change that.

Google Maps street view of the Yucca-Argyle apartments.

The residents of the Yucca-Argyle are in a similar position: they were getting a pretty great deal on rent, and they'll probably never find anything quite so good again. It's too late. While they felt safe and secure in their rent-stabilized homes, the world (aka, the housing market) passed them by. Now they're being unceremoniously flung back into that market without the tools (aka, incomes) to cope. 

We, the YIMBYs and the pro-housing advocates, can rail against the fact that opposition to new housing—regardless of the income level—is why the housing market overheated and left these tenants vulnerable. And that's true. But what will our arguments accomplish? These residents had nothing to do with it, really. And besides which, for most of them this isn't about some grand vision for or against the future of LA, it's about whether they'll be forced to leave the city in the next year, or suffer the indignity of overcrowded housing, or worse. They're not assembling a high-minded statement of principles and values, they're fighting for their lives.

Building New Housing and Protecting Existing Residents

As I wrote above, the fact sheet produced by the LA Tenants Union has a lot of misleading language, but we can put most of it aside. If we address just one of their concerns, almost all of the rest will melt away, I think. Some people generally opposed to new development, like the liars behind the Neighborhood Integrity Initiative, will stick it out—but their arguments will hold no weight with renters if they have an effective safety net.

Below is the most important statement made in the fact sheet:

Build Better LA would fast-track developments that destroy and replace rent-stabilized housing without providing displaced tenants a guaranteed right of return.

This is the heart of the issue. Displaced residents have no place to go. That's true right now, and it's a problem that exists whether or not the Build Better LA ballot initiative passes this November. If we can resolve this issue—for example, if all of the current tenants get to move back in when their building is done, and at the same or similar rents—everyone wins. The tenants get to stay (and in an upgraded unit), the developer gets to build, renters have more housing to choose from and less competition for what's already built, and the city gets the revenues and affordable housing it so desperately needs.

Moving tenants back to the same exact place is problematic, though, because there's a big gap between demolition of an existing building and the construction of a new one—at least a few years. An alternative may be to adopt my proposed non-profit, acquisition-based affordable housing program: buy up existing multifamily housing, take it off the private market, and permanently maintain it at affordable-but-financially-sustainable rental rates. An important attribute of this program is that it would serve as a sponge for displaced residents like those at the Yucca-Argyle, giving them somewhere to move that is of similar quality, similar cost, and proximate to their current unit.

This Koreatown apartment building was purchased for $7 million—$127,000 per unit—in 2015. It and thousands of other units could be acquired with public funds and used to house those displaced by new development. Source: MultifamilyBiz.

Instead of paying relocation fees of between $7,800 and $19,500 per household (though you'd still want to give renters some money for moving costs), the developer could contribute those funds toward non-profit acquisition of existing buildings, and displaced residents would be guaranteed a place in one of them. This would achieve a lot of important goals all at once: 1) it would prevent displacement that forces tenants to pay significantly more, move somewhere significantly worse, and/or lose their physical connection to their community; 2) it would place residents in housing that is not likely to be demolished or converted in their lifetimes, if ever; and 3) it would invest funds in long-term affordable housing resources rather than one-time relocation pay-offs.

Another option would be to offer the displaced residents Housing Choice (aka Section 8) vouchers, which supplement a tenant's income so that they can afford decent housing without paying more than 30% of their income. The difference between 30% of the tenant's income and the actual rent is picked up by the government. This is technically a federal program, but there's no reason the city couldn't add its own pool of funding for special cases like Ellis Act evictions. These vouchers, as with the acquisition-based affordable housing program, could be funded by developers rather than having them pay 5-digit relocation fees. The nice thing about the Housing Choice voucher is that if someone's income is too high, or if the unit they choose to move to is higher-end, the voucher doesn't do them any good—in effect, you can hand them out without having to worry about affluent residents receiving assistance that they don't really need. Housing Choice vouchers also have the benefit of being mobile: unlike rent-stabilized units, you can take them wherever you want within the city/region, so you're not stuck in place just so you can hold onto a good deal.

If tenants have somewhere to go when they're displaced—somewhere that is as good as their current home, rents for a similar price, and is at least as stable—suddenly there's not so much of a reason to oppose the new development. Being relocated is still inconvenient, no doubt, but it's no longer disastrous. And frankly, it's not unreasonable that a property owner should be able to do what they want with their property, so long as he isn't destroying the lives of his tenants. Signing a one-year lease shouldn't equate to a til-death-do-us-part commitment. And of course, we really, really need the housing.

There's actually one other statement in the fact sheet, which you can read below, that I think is worth addressing:

Destroying rent-stabilized housing means it is gone forever. There is no real means to replace rent-stabilized housing, and such units, according to Build Better LA would ultimately go under the narrowly limited “affordable” housing scheme

This one, I have to admit, is a bit more challenging. I'm actually working on a two-part follow-up to this post which will discuss the appeal and the drawbacks of rent stabilization, but I'll end with just a few paragraphs that summarize some of my thinking.

First, I'm okay with rent stabilization. It has some problems, but overall I think it probably does more good than ill, especially in a market like ours.

My biggest concern with rent stabilization is how much we've elevated it in Los Angeles and across the region, putting it on a pedestal as though it's a silver bullet that will solve the affordability crisis. The fact is, the vast majority of housing in LA is already rent-stabilized (623,000 units), and yet things are still pretty rough. It doesn't do much good for most people because it depends on you staying in the same place year in and year out, decade after decade. Most people can't do that—and more importantly don't want to. Landlords can reset their rents whenever a new tenant moves in, so once market rates rise to a certain point, "rent-stabilized" is no longer synonymous with "affordable." They're just completely different things, and though its nice that the law keeps rents from climbing more than 3-5% a year once you move in, that's irrelevant to someone earning $30,000 a year who can't find a rental for under $2,000 a month.

The other problem—and this is related to everything I've written above—is that the rent stabilization law pits existing, protected residents against new development and future residents. As the LA Tenants Union wrote, once a rent-stabilized unit is gone, it's gone forever. And because of California state law (the Costa-Hawkins Act), nothing that isn't already rent-stabilized can become rent-stabilized. The supply can only decline over time.

I think we should look to reforming Costa-Hawkins. Not to abolish it entirely, because there were good reasons for adopting some of its key provisions, but to make some important changes. In an upcoming post I'll explore a new proposal: a "rolling" rent stabilization law that applies to any multifamily building over 35 years old, with time-limited exemptions for buildings that have traded hands recently. Instead of limiting the supply of rent-stabilized units to those built on or before October 1st, 1978, the supply would continuously grow over time, while still allowing developers enough time to profit from their investment (otherwise there would be no incentive to build the new housing we need).

Importantly, this would mean that every rental unit built today would become a rent-stabilized unit in the future, so renters would have a clear reason to support additional construction and could see how it would benefit them and their children—as it should. Paired with the safety net measures proposed above, this could be an important step toward bridging the gap between pro-housing and anti-displacement advocates, and would help us achieve our shared goal of a more affordable, equitable Los Angeles.

More coming soon.

*For the record, I actually oppose Build Better LA, just not for the reasons listed by the LA Tenants Union. The affordability requirement for general plan amendment projects is actually a great idea, it's the other parts of the initiative that I find distasteful and harmful to long-term affordability.