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CES In The News

Los Angeles Daily News
Thursday December 14, 2006
Condo-Conversion Limits Weighed
Apartment Overhauls Would be Pricier

BY KERRY CAVANAUGH, Staff Writer


This Picture Did Not Appear In the Original Version of This Article
Under increasing pressure to slow the loss of affordable rentals, Los Angeles city planners have drafted major changes in development policy that could slow the conversion of rental apartments into for-sale condos.

The new regulations would add several thousand dollars to the cost of converting an apartment unit to a condo, potentially discouraging some developers who would find it more expensive to evict tenants.

But while developers are critical of the proposed changes, low-income-housing advocates - who lobbied for such restrictions - also oppose some of the new rules.

Larry Gross, executive director of the Coalition for Economic Survival
, said the laws don't do enough to restrict conversions and protect tenants and do little to limit demolition of apartment buildings to make way for new condominium buildings.

Such demolitions have wiped out several hundred units in Valley Village and Studio City. And without restrictions on demolitions, Gross said, "These recommendations will fail to make a dent in the tidal wave of affordable-housing loss the city of Los Angeles has been and continues to experience."


Condo conversions have become popular in L.A. in response to the hot real estate market, where landlords could get out of the rental business and sell their units for $300,000 to $500,000 each. Priced out of single-family homes, middle-income and first-time homebuyers have snatched up the new condos.

While the real estate and condo market has cooled considerably, the city is still seeing higher-than-normal demand for conversions.

Since 2001, renters have been evicted from nearly 12,000 rent-controlled apartments, according to city statistics. Some 4,000 of those have been condo conversions approved by the city. The rest are largely demolitions for new condo construction.

The proposed ordinances would cap condo conversions at 734 units per year. It wouldn't affect demolitions, which the city has less authority to limit.

Principal City Planner Jane Blumenfeld said there is concern the regulations could prompt developers to demolish rentals instead of converting them, resulting in tenant evictions and more expensive for-sale housing.

"We want to be sure what we do doesn't result in more demolitions. Not having housing stock at all is probably far worse," she said.

The ordinances would also increase relocation assistance for tenants - from $8,450 to $12,615 for families with children and the elderly and disabled, and from $3,550 to $4,575 for all other tenants.

Building owners also would pay a per-unit fee - $671 for qualified tenants and $431 for all other tenants - to a relocation assistance firm that helps find tenants new apartments.

The extra fees are likely to discourage developers or make the for-sale units more expensive for buyers, said Chris Christensen, president of condoconversion.com, a San Diego-based company that helps building owners convert to condos.

"It's not a real solution. It's a Band-Aid measure to protect one class of people at the expense of the other," he said. "What's going to happen is the city is going to have less building permits, less property taxes and less rehabilitation (of older buildings)."

Christensen and others said condo conversions rehabilitate older buildings, spruce up neighborhoods and spur redevelopment.

But Beth Steckler, policy director of Livable Places, said condo conversions don't increase the supply of housing and therefore don't really help the city's housing affordability problem.

"The underlying problem is a lack of supply," she said. "People in the private market, they're looking to make money. That's fine. Let's have them do that but not aggravate the shortage of affordable housing by taking affordable rentals."


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