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Deal to stop rent increases at Chinatown apartment complex falling apart

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Tenants were supposed to be safe from rent increases, but they’re facing one now

A photo of the entrance to an apartment building. The building is light green with a stuccoed exterior and red railings up the sides of the stairs leading to the front doors.
The Hillside Villa apartments at 636 North Hill Place.
Elijah Chiland

Negotiations between Los Angeles City Councilmember Gil Cedillo and the owner of a Chinatown apartment complex to keep tenants in their homes—without rent increases—are breaking down.

About 20 residents of the Hillside Villa apartment building, advocates from Chinatown Community for Equitable Development, and representative of the Los Angeles Tenants Union met Friday on the steps of City Hall to announce that tenants had received notices in July from the building’s owner that a 5.5 percent rent increase would take effect September 1.

Such an increase “would be clearly in breach of our agreement,” Cedillo said in a statement.

He said the deal—the entirety of which has not been made public—would forgive the loan that was used to build the apartments in exchange no displacement, no evictions, and no rent increases for 10 years. (It’s unclear how much of the $5.4 million loan is still outstanding).

But building owner Thomas Botz says the agreement is still very much a work in progress and that it was “very misleading to the tenants” to announce a deal. Botz says that Cedillo made a “very generous offer” to keep the building affordable, but “there is probably no deal.”

On July 3, Cedillo issued a press release saying he had reached a tentative agreement with Botz.

Cedillo’s move to make a deal was precipitated by the expiration of the affordability covenants on Hillside Villa, which opened in 1988 as affordable housing. The covenants had kept rents on the building’s 124 units low for decades, but last year, it expired, allowing Botz to charge market-rates for the units.

Botz says that due to a technical error he made in giving notice to the tenants about the expiration of the covenants, he had to give them one more year before he can raise the rents to market rate. That notice was delivered to tenants “a few days ago,” Botz says.

“Some tenants have benefited for 32 years,” Botz says, and now they have another year to find new accommodations. Botz says that the rent increase is within the amount he is allowed to raise rents on these units. On September 1, 2020, he plans to begin to charge market rates on the units.

A photo of three women, each holding signs with slogans speaking out against the rent hikes and potential displacement they are facing.
Antonia Salazar (left), Monica Ruiz (middle), and Adela Cortez (right) are all tenants of the Hillside Villa.
Bianca Barragan

Many affordable complexes countywide are in a similar position. Between 1997 and 2018, the expiration of affordability covenants led to the conversion of more than 5,000 affordable apartments into market-rate units across Los Angeles County, according to a report from the California Housing Partnership.

The Hillside Villa apartments were slated to add to that statistic.

Earlier this year, Botz sent notices to tenants of rent increases that amounted to, in some cases, roughly three times their current rates. The original increases were slated to take effect in June, but Cedillo got involved and, in July, announced a deal had been reached with Botz that would keep Hillside Villa residents in their homes at current rents.

It’s “absolutely unacceptable” that the deal that was hammered out is now being “reneged” on, Cedillo told the full City Council on Friday.

“People are expected to bargain in good faith and if they act in bad faith, we expect the city [and] the city attorney... to do all that we can on behalf of these tenants specifically and all tenants in the city of LA,” Cedillo said.

Conrado Terrazas, communications director for Cedillo, said specific next steps have not been laid out yet, but if Botz does raise the rents, “legal action is a possibility.”

This has been a long saga for the tenants of the Hillside Villa.

“I’m tired—we are all tired,” said Rosa Hernandez, an eight-year tenant of the building. “I feel like it’s enough. Give us our home back,” she said.