SR-407-004-01 (3)
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Counci I ~Tg 3-23-82
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SanTa Monica,
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MAR 2 3 1982
Ca Ii +.::;;rr. i c:
TO: ~ayor and City Ccuncii
F~O~: City Staff
SUBJECT: Rental Housing Renabil i+aTion Feasibi lity Studies
Introduction
ThIS reoort transmits The Rental ~ousing Rehabil itation Feasi~l j ity Studies
prepared by Pica Neighborhood AssociaTion (DNA) and Ocean ?ark Community Or~an;-
zation (OPCO), pursuant to their respective Consultant Agreemen~s with the C1+y.
The studies were not designed to provide s~atlstical Iy significant data aboLt 51 r
tenan~s, or overal I housing conditions in tre two nelghoorhoods. Rather, the
studies provide a snapsnot of the sal ient issues involved in +~e for~ation of a
rshaDl I itation pol icy and an acpropriate program design. Si~ce tre studies
r I IU~lnate the pol icy questions involved in tre development of a rehabi I lia7ion
program, this report wil I begin with a review of +he major issues they raise.
~rie; summary of the major ;indlngs, cor-elusions, ard recommendations i~c!uded
i~ each reoort fol lows. The final element presen+ed is a ~rcpcsed fra~ework and
timetable for the deve~op~ent or specific pel icy and program recom~erdatlons fer
presentation to Council.
POLICY I~PLICATIONS
80th reports conclude that there is a need to address p~ysical rcusing concitic~s
in City pol icy. Two basic aoproaches are proposed (I) promulgation ane enfcrce-
~ent of habitability regula~ions such as housing or property maintenarce coces,
and (2) operation of a below mar~et interest rate Ican orogram which is serS'Tlve
+0 cbility to uav Issues. whi Ie trese recommendatic~5 are rot mutcai IV eXCIJSiVe,
the reports do raise ~uestions as +0 who should pay ~or remedying substandard
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~ayor and City Co~nci I
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housing conditions, Dartic~larly in view of the re~t cec,ease provisions contained
i~ the Rent Control Charter Amend~ent.
Other Dol icy matters raised In the reports prepared by ~NA and OFCO are as fol lows:
EI igible Repairs: ~NA's report s+ressed that a rehabi' ltation crogra~ involving
City subsidies should strongly emphasize the repair of healt1 and safety violations.
OPCO staff asserted that City funds should ~e restricted to c3pital l~prcvements
(such as the re~lacement of o~tmoded electrical systems) which materially enhance
the housing services provided in a particular bui lding, ra+her than subsidizing
the replacement of Items such as windows, heaters and other services whic~ are
governed by law,
qelationship to Rent Control Provisions: 30th groups found a relatlo~ship
between landlord partiCipation and re~t control increase provisions. Should
the Counci I elect to pursue a program whic~ provides subsidies for rehabil i-
tation, City and Rent Control staff wi! 1 need to wor~ togeTher to discuss and
develop pol ICY recom~endations which address areas of ~utual concer~.
ReqUirements for PartiCipation: ?~A suggested that landlords be required to
make units rehabi I itated with City funds available for low and moderate income
tenants for a period of years, HUe staff strongly support this apDroacn,
although it is not required by regulation.
I I SUMMARY OF CONTRACTORS I F I NO t NGS,', CONCLUS 10;..5 AND RECO~MENDA T tONS
Format of the Research
The stud'es were organized to deter~ine the extent of interest In a City-soonsored
rehabili7ation loan pro~ram on the part of landlords and 7enants. 20th owners a~d
7enants were interviewed to determine their cerspectives on rehabi I Itation needs,
WI I I lngness to DarticiDate in a renabi I itation program, and their wi i I i~g~ess ane
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~cyor and City Counci I
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caoacity to assume some added cOSTS due +~ rehabi I itatlon. From +he data eel lec+ed~
each organization~ in its caDccl+Y as consultant~ presented pol icy and program
recomMendations.
To establish a population for study~ both orgar-izaticns identified prooerties which
appeared to be in ~eed of some rehabi I itation via wir.dshield survey. UI+I~atety,
~NA completed interviews for twelve propertIes comorisl~g a to+al of 104 dwel lIng
~nits. They interviewed al I property owners a~d 69 +enarts (66%) oT resident
households. opec staff completed surveys of thirTeen properties. Ten of the
t11rteen landlords were Interviewed as were 51 (57%) of resident households.
ProDerty Characteristics
Pico Neighborhood: Elsht of the twelve prODertles studied by PNA were between
20 and 40 years old. The nu~ber of ~nits De: property ransed from 2 +0 3C;
hal+ were cO~Drised of 6 or rewer units. Sixty (91%) of the 66 ~nlts surveyed
rented at or below the Section 8 Existing ~air ~arket Rents (FMRs).
Ocean Dar~; T~ree-quarters of the prooertles researched were more than 50
years old. Nine of the thirteen were comprised of 4 to 6 units. ~onth,ly rents
for one bedroom apartments ranged from $150 to $460; the average was 5251.
Household Characteristics
PIca Neighborhooa: For7Y (61%) of 7he tena'l+s interviewed are lIren7 )urdenedrT
in that they pay more than 25 percen+ of Income for rent. Forty-fou: respondents
had incomes below 80 percent of the Los Angeles County median~ the ~axi~um
al lowed for Jarticipation i~ federal rent sLbsidy Jrcsrams.* r.owever, due to
~ousehold composition and overcrowd Ins, only 25 of these hc~seholds would
* !~come el igibi I I+Y crlierla ~ave changed sl~ce the sTudies ~ere conducted.
I~ IS 1 ikely that the number Of hcuseholcs which are income el igible has increased.
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Mayor a~d Ci~y ::unCi;~
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actually be eligible for Section a assistance In their c~rrent units,
Ocean Par~: Approximately 53 aercent of the households interviewed were sinsle
oerson househclds. About the sa~e Jercentage would be defined as low-~odera+e
income uSing The HUO standards noted above. A Total of eleven households would
be el igible for Section 8 assistance under preval I ing income and oc~~parcy
standards. ~ir.eteen (371) of the ~ena~,s surveyed paid ~Oie than 25 percent
of income ,oward rent.
Repair Needs
Tenant Responses: tn bOTh neighborhoods, tenants most frequently Idertified
the need to remedy non-str~ct~ral health and safety violations Including
Infestation, leaky ol~mbing, and broken Windows. Cld electrical syste~s,
Interior palrt, and screens were also ci~ed as needed i~Drovements bv Tenants.
Landlord ResDonses: The need fer exterior Dai~t was expressed jy Joth iarclords
and tenants. Four landlords in each study area bel levea that their Drooer~les
were in need o~ cosmetic and no~-cos~etic repair.
Tenant A.ttitudes
Pice Neighborhood: Twenty-five (38{) of tenants interviewed Incicated tha~
they would be wi I ting to pay ~ore re~t if reDair work is undertaKen. AI I but
four indicated that they would not object to an Insoection of +~elr homes to
establIsh repair needs.
Ocean ~ark: About half of the 51 responding households ir.dicated T~at they
would be WI I ling +0 pay more rent IT +heir apartments were recairec. Al I jut
~hree indIcated that they would ccooerate with Inspections. OPCG's repor+
indIcates that tenants expressed tre desire to Mai~tal1 low re~ts ard were
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Mayor and Ci7y Counei I
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March 23, 1982
concerned about "hassi ing" landlords or being hassled abouT repairs.
Landlord Attitudes
Pica ~eighborhood: Six of the twelve owners surveyed indica~ed that t~ey would
consider participati~n in a City-sponsored rehabi [i~a7ion program. The issues
which concerned trem included controls over ~enant selectIon, rent conTr~1
increase procedures, and 7he impl Icattons at the bot7om lire. Five landlords
Indicated their willingness to continue to rert +0 low and ~derate Income
tenants.
Ocean Park: Three of the thirteen owners refused to be Interviewed. Most of
those responding exoressed a wi I lingness to consider participation in a City-
sDonsored program. Economic considerations were voiced as a ~ajor deter~lncnt
of participation. Two landlords indicated a wi I I ingness to continue to ren7 to
low and ~oderate income households, whereas two took the opoosite s~ance.
Consultants' Conclusions and ~ecommenGations
Ocean Park Community Organization: The conclusions and recommendations presented
by OPCO and PNA were very di+ferent both in content and starting point. OPCO's
discussion centered on analyzing the appropriate pol icy aoproach to properties
In need of repair. The specific questions raIsed in the report are as fol lows:
o Is a ?rogram which could lead to rent increases for repairs as oaposed to
new capital improvements consistent with the Rent Control Charter A~endment
adopted by the v07ers?
o Should landlords be subsidized or tenants reauired to pay for deferred
maIntenance ite~s or code Violations? Alternatively, should housing cedes
an1 other habitaol I ity legislatIon be More vigorously enforced ~o foster
adequate maintenance of the housirg s7ock?
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Mayor and City ~ounci~.
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March 231 '982
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o Are the condItions of a Citv-sDonsored rehabi litation program (suc~ as an
agreement requiring owners to rent to low and moderate income tenants)
consistent with landlords' investment objectives?
Based upon the policy objectives specified i~ their recorT1 QPCO staff presented
the fol lowing programmatic approaches to ~ousing rehabi I 1tatlon:
o PromOTe use of nqepair and Deduct" remedies1 provide 'TlOre vigorous
enforcement of housing and health and safety coces.
o Create a fund composed of fees collected trom landlords to be used to ~a~e
repairs where an owner has failed to act upon tenant c~plaints toi lowi~g
adequate notice.
o Provide long tern, low interest loans for non-code1 non-deferred
~aintenance items; i .e'1 to mocernize outdated electrical systeMS or to
improve security.
o oromote non-profit ownershio of housing.
o StreaMline Rent Control Board procedures tor capital improvements.
~ico ~eighborhood Association: PNA's discussion of pol icy starting points
concentrated on neighborhood de~ographics1 that ~ost ot the tenants are ~aying
700 high a percentage of income for rent1 and that there IS a high incidence of
overcrowding. PNA's data indlca+es tha+ household composition, rather than
rent levels, prevents the use of Section 8 rental subsiqies to generate rental
Income to support rehabil itatlon,
ONA researchers concluded Lhat their findings dcc~mented a need for inve5t~ent
j, repairs and i~provements in their neighborhcod. Their progra~matic approach
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~ayor and City ~ounci'~
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March 23, I 982
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emphasized anti-displacement ~easures:
o The program should foc~s on health and safety violations to ~ini~ize costs.
o Housing codes should be enforced judiciously to avoid displacing tenants.
o A combination of long +er~, low interest loans, deferred loans, and grants
should be provided to maintain affcrdabi lity.
o Owners should be required to continue renting to low and ~oderate income
tenants as a condition of participation.
o Olrec+ grants should be proviced to 7enants to repair Their aoartnents.
o Tenant self-help teams should be formed to do repairs.
o Ongoing tenant and co~unlty organization participation should be bui It
into the program to provide outreach, answer questions, and +0 monitor
program operations.
11 I PROPOSED RENTAL YOUSING RE~ABILITATION WORKING GROUP
In order to develop a set of pol ICY and progra~matic alternatives for Council's
review, STaff recommends the forMation of an in-house working group composed of
representatives from the Housing and Planning departments, the City Attorney's
office, and from the Rent Control Administration. S+aff from each deDartmen~
have indicated an interest and wi tlingness to participate in this process.
The major issues for discussion would include those presented at t~e beginning o~
this report--a~proaches to improving housing qual ity, priority repair ite~s,
randlord and tenant eligibi I ity, and qent Control Board caoital investment pol icy.
[n addition, means of stimulating erergy conservation measures and household
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security in the context of a rehab! I itation program wil I Je considered.
It is anticipated that it wi ~I take two to three months of weekly ~eetings to
assemble a report for review, comment, and pel ICY direction by Counei I, The
Rent Control Board, and eonmunity and industry grouDs.
Recommendation
It is recommenCed tha7 the Council au~horize staff to form a ren+al ~ouslng
rehabil itation wor~ing group which wi I I discuss and prepare a set of pol icy and
program alternatIves for Counci I. Rent Control Boare, and ccm~unity review.
Prepared by: Mindy Leiterman
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