Turning Housing into Hotel Rooms

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The Metropolitan on Sunset

If you needed any more proof that City Hall has no real interest in solving our housing crisis, you should have come to the September 12 hearing held by the Central Area Planning Commission. On the agenda was an appeal of a decision by the Department of City Planning (DCP) to approve a Conditional Use Permit (CUP) for transient occupancy at the Metropolitan Lofts on Sunset near Van Ness. There’s a long, complicated story behind this, but basically the owners want to be able to turn apartment units into hotel rooms. Susan Hunter, of the LA Tenants Union (LATU), filed an appeal to try and overturn the CUP. But the Commissioners sided with the owners, and gave them the go ahead to allow transient occupancy at the Metropolitan.

The September 12 session was actually continued from the August 8 hearing when the appeal was first heard. Taken together, these two hearings were a mind-numbing demonstration of the DCP’s arrogance and callousness. It has never been clearer that the DCP’s culture is geared toward serving private interests rather than the general public. Most of the Commissioners, along with DCP staff, bent over backwards to make allowances for the owners of the Metropolitan, while throwing the building’s tenants, and renters in general, under the bus.

The story of the Metropolitan is long and complicated, but to give you some background, here’s a brief recap….

The building originally started as a hotel back in the 80s. It ended up getting a reputation as a place to party, and by the 90s it was getting a lot of attention from the LAPD. After a while the owners decided they’d be better off turning it into an apartment building, and the DCP signed off on that in 2006. In their determination letter, the City Planning Commission said the conversion of the Metropolitan’s 52 units was consistent with both the General Plan and the Community Plan, and stated that the change would, “provide increased opportunities for residential living in Hollywood where it is appropriate and needed.”

Fast forward about 10 years. Hollywood has always been a hot spot for tourism, and with the advent of Short-Term Rentals (STRs), property owners can make a bundle posting units on AirBnB or any of the other popular sites that offer “home sharing”. This is especially attractive to landlords, who realize they can make a lot more money by getting rid of tenants and opening the door to tourists. The folks who own the Metropolitan were thinking they could cash in by turning the building back into a hotel, but they came up with a very creative way to do it. They didn’t just ask the City to turn the place back into a hotel, they requested a zoning overlay to make it into a Transit Occupancy Residential Structure (TORS), while maintaining the residential use. This way the owners could use the units as either apartments or hotel rooms, depending on how they feel on any given day.

Do you see a problem here? The small group of tenants who were still left at the Metropolitan sure did. You see, the owners decided they weren’t going to wait for the City’s approval. They actually allowed a company that specializes in STRs, Senstay, to start offering some units to travellers. The tenants started to see all kinds of strangers wandering up and down the halls with their luggage trailing behind. They found themselves letting in guests who didn’t have a key because there was no front desk to help visitors. They sometimes had to wait to use the laundry rooms because housekeeping staff was there ahead of them. And they started to worry about break-ins because things were getting stolen. These problems were piled on top of the problems they already had to deal with, like lighting that didn’t work, long periods when the AC was down, and elevators that were frequently out of service. And to make things even worse, they were required to pay fees for utilities, trash, and sewage through an on-line service which often added late charges for bills paid on time, in addition to a “convenience fee”.

It’s pretty clear that the Metropolitan owners don’t care about their tenants, and would like to get rid of them. Jerry Neuman, the owners’ representative at the hearing, claimed that they treated their tenants well, and that they didn’t intend evict anybody. That doesn’t jibe with the facts. All the residents I spoke to at the Metropolitan confirmed the problems listed above. And while the owners claim they’re not removing housing to make way for hotel rooms, they had allowed the number of tenants to dwindle to 15, and offered those who still remained money to leave. This sounds to me like they’re planning on turning the Metropolitan back into a hotel.

Which brings us back to Senstay. To give Commission President Jennifer Chung-Kim credit, she confronted Neuman with evidence supplied by appellant Hunter that the Metropolitan owners had been renting rooms to tourists for a while. Neuman’s response was one of the few amusing moments in an otherwise grimly depressing ordeal….

“As I understood it, that was a corporate lease. That was not…. I don’t…. and we…. our understanding…. and we have not rented our facility for temporary occupancy.”

But let’s take a look at the way Senstay presents itself on its own web site….

“Building upon Airbnb’s monetization and subsequent creation of a new asset class, we are passionate about bringing our own meld of ‘the sharing economy’ and traditional real estate investing to our clients.”

Senstay exists to facilitate STRs. That’s the business it’s in. When Commissioner Chung-Kim handed him the document, Neuman finally realized his clients were busted, and he decided not to say any more on the subject. There’s some ambiguity about whether the LA Municipal Code allows individuals to rent their homes as STRs, but it is illegal for landlords to turn multiple apartment units into STRs. So did the Commission follow up on this? Did they turn to the representative of the City Attorney’s office, who was sitting right there with them, and ask for an investigation? Did they recommend that the Housing & Community Investment Department take action against the owners for illegally offering apartments as STRs? Nope. They did nothing. They let the Metropolitan owners off the hook without any consequences whatsoever. The Commission just let it slide.

With the exception of Vice President Daphne Brogdon, it seemed like the Commission was ready to give the Metropolitan owners pretty much whatever they wanted. At the August 8 hearing, Brogdon repeatedly questioned the wisdom of allowing 52 apartments to be turned into hotel rooms in the middle of a housing crisis. She pointed out that allowing this dual use could be a precedent, leading to other landlords making the same request.

Neuman’s response? “As much as you may say that Hollywood…, that we have a housing crisis, we have an equal amount of crisis in the number of temporary occupancy units available in Hollywood.” It’s true that tourism is booming, and there is a demand for more hotel rooms throughout the city. But there are 25 hotels within a 1 mile radius of the site, and in Hollywood there are 13 more either under construction or currently making their way through the approval process. On top of all this, AirBnB alone offers hundreds of listings in the Hollywood area, without even counting those offered by platforms like VRBO, Oasis Collections, Housestay, and One Fine Stay. Oh, and let’s not forget Senstay. Honestly, I haven’t heard any stories about tourists sleeping on the street because they couldn’t find a hotel room.

But there are thousands of homeless people sleeping on LA’s streets, and Ellis Act evictions continue to climb, with over 1,000 rent-stabilized units being taken off the market annually. It’s amazing that in Neuman’s eyes the lack of hotel rooms for tourists represents a crisis equal to the lack of housing for residents.

So it was great to have Brogdon at the August 8 hearing to ask tough questions about adding the transit occupancy use. Unfortunately, that was her last day on the Commission. When the hearing continued on September 12, her seat was vacant, and no one was left to speak up for the tenants.

And speaking of the tenants, where were they during all this? None of the tenants that Hunter was representing made it to the August 8 hearing. It’s not always easy for people who work to make it to City Hall at 4:30 pm on a work day. But 4 of them showed up for the continuation in September. They came down because they wanted to speak about the habitability issues they’d experienced at the Metropolitan, and about the difficulty of living in a building that had already been partly converted to a hotel, and about their fears that the owners were planning on getting rid of them.

But they never got the chance to speak. Commission President Chung-Kim decided that since they’d already heard public comment on August 8, there was no need to hear any more. She had mentioned earlier that it was difficult to reopen public comment once it had been closed. Somehow, though, she had no problem doing exactly that back in August when she wanted to hear from the owners’ rep. Toward the close of that session, Chung-Kim wanted to get Neuman’s input on a possible compromise, and it seemed pretty simple to reopen public testimony. But in September somehow that wasn’t possible. This is actually something I’ve often seen at hearings held by the DCP’s various Commissions. They always seem more than willing to let the developers and their reps babble on endlessly, but public comment is usually strictly controlled. At the August hearing and the September continuation, Jerry Neuman had ample opportunity to talk about why his clients needed the CUP, and I’d be willing to bet he spoke more than any other individual in the room. But the tenants Hunter was representing, the people most affected by the change of use, weren’t allowed to say a single word.

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A shot of the September hearing.

I’ve been to a number of Commission hearings over the years, and I do feel like there’s definitely a bias in favor of owners and developers. But maybe it’s just me. Maybe I’ve got a chip on my shoulder. Or maybe, since the Commissioners are appointed by the Mayor, they all just share his enthusiasm for aggressive gentrification and rampant displacement. But there could be other reasons, too. It’s interesting that the owners’ rep at this hearing was Jerry Neuman of Liner LLP. In case you haven’t heard of Liner, they’re one of LA’s top lobbying firms. In fact, in the Ethics Commission’s 2nd quarter lobbying report for 2017, Liner ranked number one in terms of payments received, racking up $2,310,565. Pretty impressive. And one of Liner’s top clients is Harridge Development Group. If you take another look at the Ethics report, under the section for clients, you’ll find that Harridge is number 10 in terms of payments reported, having shelled out $118,765. But that’s actually kind of misleading. If you really want to know what kind of money Harridge is throwing around, you should take a look at the number 2 spot on the list. This is where you’ll find Crossroads Associates LLC, which is behind Crossroads Hollywood, a massive complex planned for Sunset and Highland, and even though the name is different, this is also a Harridge project. For this project the client has paid out $393,837, and the recipients were the swell folks at Liner LLP.

So what does all this have to do with the Metropolitan? If you look at the applicant for the Metropolitan’s request to the DCP, you’ll see Brad Woomer, 5825 West Sunset Boulevard, LLC. The company is just another anonymous LLC, but it turns out Woomer is the Chief Financial Officer for Harridge. So the people behind the request for transient occupancy at the Metropolitan just happen to be the same people who figure so prominently on the Ethics Commission’s lobbying report. And the firm handling the request is none other than Liner LLP, which ranked number one in terms of payments recieved in the same report. Liner is definitely well connected. Among the agencies they’ve lobbied for the Crossroads project are the City Attorney, the City Council, Building & Safety, and of course, the Department of City Planning.

But maybe this has nothing to do with how the Metropolitan hearing went. Maybe I’m just a crazy conspiracy freak with nothing better to do than pore over Ethics Commission reports and show up at grindingly dull Commission hearings. (Seriously, I think I need to get a life.) Whatever the reason, the Commissioners voted to deny the appeal and grant the CUP. The Metropolitan owners can now legally turn residential units into hotel rooms. And since this does seem to be a precedent, it opens the doors for other landlords to do exactly the same thing.

Still, the Commission had to make it look like they were taking care of the tenants. So between the August and September hearings, Neuman met with DCP staff to work out a set of conditions that were supposedly going to make everything okay. The conditions included granting the remaining tenants a 4 month extension on their lease, and the option to move to a part of the building where they would be consolidated, the idea being that this would resolve conflicts with short-term guests. The Commission acted as though they were doing everything they could to protect the tenants, but it’s really all a game, because the City rarely enforces any of these conditions. Even when violations are brought to the City’s attention, enforcement is generally so lax as to be meaningless. Agreements like these are put in place to make it look like the DCP is doing its job. Once the hearing is over, it’s just a lot of language to be stuck in a file and forgotten.

So that was it. The Commissioners denied the appeal. The Metropolitan owners got their CUP. And after it was over the tenants stood outside the hearing room, realizing that the City had thrown them under the bus. For me it was one more maddening demonstration of the City’s staggering disregard for the rights of LA’s renters. I can’t imagine how the tenants felt. The DCP seemed to be saying to them, “We just don’t give a damn about you.”

The appellant, Susan Hunter, who’s a friend of mine, was frustrated, but has refused to give up. She’s been working on trying to find legal representation for the tenants so they can get relief from the courts. This isn’t her first fight, and it won’t be her last. I have to give credit to Susan for her tenacity, and to all the others in this town who keep pushing for some kind of justice. It’s got to be tough to keep going when the deck is clearly stacked against you.

P.S.
In the post above I mentioned Jerry Neuman’s claim that the owners had no intention of evicting anybody, and that they just wanted the option to post vacant units for transient occupancy. Well, since the hearing I’ve been told by Susan Hunter that the tenants she does not represent have been told to vacate the premises. They’re supposed to be out by Christmas.

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Tenants Take a Stand

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There’s been a noticeable shift in City Hall’s public stance on evictions recently. A couple years ago, the Mayor and the City Council weren’t saying much, and certainly weren’t doing much, about the wave of displacement that was sweeping across LA. Ellis Act evictions had been rising steadily, thousands of tenants had been forced out of rent-stabilized apartments, and City Hall’s reaction was pretty much, “Who cares?”

But now that the issue is getting media attention and our elected officials are taking some serious heat for their inaction, the change in attitude at City Hall is noticeable. Mayor Garcetti has unveiled the Home for Renters campaign, designed to inform tenants of their rights. The Housing & Community Investment Department (HCIDLA) web site is offering booklets renters can download in English and Spanish to learn about how the law protects them. There’s also been an accompanying media blitz to get the word out. I have to wonder if City Hall’s sudden concern for LA’s renters will last beyond next year’s election, but right now you can tell the politicians are nervous.

One of the most striking examples of this turnaround can be found in the story of a group of tenants living in the apartment building at the corner of Yucca and Argyle in Hollywood. The building is home to 44 households, including singles, couples, families with children, seniors and veterans. It’s subject to LA’s Rent Stabilization Ordinance (RSO), which means that rents can only go up about 3% every year. A while ago they got word that the building was going to be sold to Champion Real Estate, a developer that had plans to build a luxury high-rise on the site. It seemed like it would just be a matter of time before the new owner started handing out eviction notices.

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But that hasn’t happened. Yet. And a large part of it has to do with the fact that the tenants decided they weren’t going to let themselves be pushed around. They connected with the LA Tenants Union (LATU), which helped them organize the Yucca Argyle Tenants Association (YATA). They spoke out. They took part in public actions. They got support from their neighborhood council. They let the world know they weren’t going without a fight.

In fact they made so much noise that the developer stepped forward with pretty unusual offer. I asked Sasha Ali, of YATA, for an update, and here’s her response.

The developer recently stated at the Hollywood United Neighborhood Council’s Planning and Land Use Management meeting that he is willing to offer affected tenants the right of return to the proposed development at their existing terms of rent. He also offered to relocate returning tenants in Hollywood during construction and subsidize their rent.

When you think about the fact that many tenants evicted under the Ellis Act have to fight to get the payments that the law requires, this is pretty impressive. It’s a sign that the media attention about displacement is having an impact. Remember, this is happening in Councilmember Mitch O’Farrell’s district, and O’Farrell has been getting a lot of heat about widespread evictions happening on his watch. Could he have asked Champion to make some concessions in order to cool things down? Well, O’Farrell is up for re-election next year.

There’s no way of saying for sure what will happen next. Sasha said that at this point, eviction notices have not been served, and in fact Champion hasn’t actually bought the building yet. The tenants have retained a lawyer to help them negotiate with the developer.

I’m glad that the tenants at Yucca and Argyle are demanding a fair deal, and I wish them the best. But the dynamics that have created this situation are still wreaking havoc across LA. The eviction juggernaut is being driven by the huge profits developers can reap by buying an existing building, knocking it down, and putting up something much larger. This usually works pretty smoothly, because the City Council is mostly willing to grant whatever entitlements the developer asks for. Want a zone change? Sure! Boost the floor area ratio? No problem! Reduce setbacks to zero? Hell, yeah! Developers feel pretty confident they can make a bundle on these projects because they know all they have to do is hand a wish list to someone like O’Farrell, and he’ll do everything he can to make their wishes come true.

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The City Council has no legal authority to stop Ellis Act evictions, but they need to stop incentivizing the practice. They need to stop handing developers massive profits by approving endless entitlements. If you want to talk about building higher density, fine. Let’s create community plans that will allow the City to increase density in an orderly way. Let’s revise our zoning so that developers can work within a consistent framework. (And I’m not talking about wasting time on a worthless sham like re:code LA.) And then let’s make the City Council abide by those plans, instead of making exceptions for every project that comes their way.

Hopefully things will turn out okay for the folks at Yucca and Argyle. But we need to stop the practices that create these situations in the first place. The City Council needs to stop handing out favors and start doing some planning.

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A Big Win for Tenants

Members of Union de Vecinos and the LA Tenants Union at a gathering on Thursday.

Members of Union de Vecinos and the LA Tenants Union at a gathering on Thursday.

It’s not uncommon these days to hear about a group of investors buying an apartment building and forcing the tenants out. Sadly, this kind of thing happens all too frequently in LA, and we’ve seen thousands of apartment dwellers lose their homes in recent years. Many renters don’t know their rights and leave without putting up a fight. Those that try to stay can get ground down by long and costly court battles.

But every once in a while the tenants win out.

Apartments at 4330 City Terrace.

Apartments at 4330 City Terrace.

Earlier this year the apartments at 4330 City Terrace were bought by Manhattan Manor, LLC. (Love the name. It’s so classy.) The new owners immediately imposed a steep rent increase on the tenants, certainly knowing that most couldn’t pay and would have to leave. Carolina Rodriguez’ rent went from $1,250 to $2,000, far beyond what she could afford. She could have thrown in the towel and left, hoping to find another place she could afford. But she decided to fight, and last month, she won.

With the help of the Los Angeles Center for Community Law and Action (LACCLA), Carolina went to court, and the jury sided with her. In fact, not only did the jury decide that $2,000 a month was unfair, they said that the apartment she occupied needed major repairs and was only worth $1,050 in its current state. Must’ve been a shock to Manhattan Manor.

Celebration on City Terrace after the victory in court.

Celebration on City Terrace after the victory in court.

On Thursday a crowd of people gathered at 4330 City Terrace to celebrate this victory. In addition to residents from the building, members of Union de Vecinos (UV) and the Los Angeles Tenants Union (LATU) showed up to hear speakers talk about Carolina’s struggle, and to remind everyone that the struggle is still going on. Noah Grynberg, the lawyer from LACCLA who argued the case, gave an energetic speech about the importance of protecting people’s rights. Elizabeth Blaney, of UV, emphasized that there was still a long way to go in the battle against gentrification and displacement.

Noah Grynberg, of LACCLA, speaks to the crowd.

Noah Grynberg, of LACCLA, speaks to the crowd.

And Carolina took the mike to talk about how she came to the point where she felt she could stand up to the landlords. She mentioned another tenant who lived in the building, Jesus Baltazar, who had been a major influence. Though he was very ill, Jesus had insisted passionately that the tenants had to make a stand, that they shouldn’t be pushed around. His determination inspired her, and she decided to go to court. Sadly, he has passed away. His daughter, Georgina, is still fighting eviction.

Carolina Rodriguez tells how she decided to fight eviction.

Carolina Rodriguez tells how she decided to fight eviction.

The struggle goes on. Property owners will continue to kick people out of their homes in their pursuit of higher profits. But this story shows that tenants can fight back, and they can win.

If you’d like more info about the organizations mentioned above, the links are below. They all deserve your support.

Union de Vecinos

Los Angeles Tenants Union

Los Angeles Center for Community Law and Action

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