Fri, Aug

Why is LA Turning Housing into Hotel Rooms?

THE REAL LA HOUSING CRISIS-It can be stressful being a tenant in LA these days. Don't take my word for it. Just ask the people living at 1719 Whitley in Hollywood (photo above).

A couple of years ago the owner of their property filed an application to demolish the existing 40 apartments on the site and build a 10-story hotel. Since then they've been living in a state of uncertainty, not knowing when they might be evicted from their homes.   

Not that their homes were ideal before the hotel project appeared on the horizon. For years the owner has refused to make repairs or replace broken appliances, meaning the tenants had to fix what they could themselves and tolerate whatever they couldn't fix. These are mostly low-income working-class people who were afraid to push the owner too hard. So they just did the best they could with what they had.

To be clear, owners of rent-stabilized properties can legally evict tenants through the Ellis Act. That is their right. But they do not have the legal right to build whatever they want on their property. If the project requires discretionary review, then the Department of City Planning (DCP) can approve or disapprove the application.

Amazingly, in the middle of a severe housing crisis, the DCP chose to approve the hotel project even though it involved the demolition of rent-stabilized units. To really understand what a bad decision this is, let's look at the housing numbers for last year. According to data from the DCP, in 2018 the City issued permits for 20,831 new residential units. Of that total, 19,236 were for Above Moderate-Income households. Compare that to 1,595, which is the total number of permits issued for Very Low, Low, and Moderate-Income households combined. In other words, over 90% of the housing permitted in the City of LA last year was for households making well over the area median income. 

But we’re not done yet. Last year in LA landlords withdrew 1,850 rent-stabilized units from the market.  If you take the number of Very Low-, Low-, and Moderate-Income Units permitted and subtract the number of RSO units withdrawn, you get a net loss of 255. While affordable units and RSO units aren't exactly the same thing, the result is pretty clear. In 2018 the City of LA added more than 19,000 new units for households making over 120% of the area median income. But households whose income falls below that threshold had 255 fewer units available to them. 

So you really have to wonder why the DCP would approve a project that removes 40 units of housing to make way for a hotel. Again, it’s up to the City’s discretion whether or not to allow this to go forward. While tourism numbers have been climbing steadily and there is a need for new hotel rooms, all you have to do is take a look at the growing number of homeless encampments to realize that the need for housing is far greater. And the City has approved over 1,400 new hotel rooms in the Hollywood area just since 2015, so it’s unlikely tourists will have a hard time finding places to stay. 

The DCP claims the hotel project is consistent with the City’s General Plan, but is that really true?  Let’s take a look at the first goal listed in the Housing Element of LA’s General Plan:

“Goal 1: A City where housing production and preservation result in an adequate supply of ownership and rental housing that is safe, healthy and affordable to people of all income levels, races, ages, and suitable for their various needs.” [Emphasis added.]

If that’s not enough, take a look at the Hollywood Community Plan, which includes as one of its stated objectives:

“To make provision for the housing required to satisfy the varying needs and desires of all economic segments of the Community, maximizing the opportunity for individual choice.” [Emphasis added.]

While the General Plan and the Hollywood Community Plan have a number of stated objectives, it should be brutally clear to anyone who lives in LA that right now housing is our number one priority.  At a time when homeless encampments are taking over LA’s sidewalks, how could any rational person argue that building a hotel is more important that preserving existing housing? If the owner does want to build something, it would make a lot more sense to build housing, especially a project with enough affordable units to offset the loss of the existing 40 apartments. But instead of using its authority to promote development that serves the people of LA, City Planning has chosen to reward a real estate investor who wants to turn housing into hotel rooms.

And this isn’t the first time the DCP has done this. 

In 2015 the DCP approved a conditional use to allow the conversion of an 18-unit apartment building at 1850 Cherokee in Hollywood (photo below) into a boutique hotel. In May 2017 they did the same thing with the Metropolitan Lofts on Sunset, allowing the owner to turn 52 apartments into 52 hotel rooms. And just a few months later they did it all over again, this time working their magic on what had been an 88-bed senior housing facility at 1449 Wellesley. 

But my favorite example of this trick is what they did with Level DTLA at 888 S. Olive. The building was approved in 2013 as a residential project with 303 condominiums, but early on the owners made the decision to turn it into an extended-stay hotel. It is legal to offer residential units for stays of 30 days or more. But in late 2017 local activists discovered that Level DTLA was advertising rooms for stays as short as a single night. How were they getting away with this? The Department of Building & Safety had quietly given them a permit to allow transient occupancy in 97 of the units. At a time when City Hall had been insisting there was a pressing need for new housing in Downtown, the City had turned almost a third of the building's residential units into hotel rooms. 

City Hall keeps telling us we're in a housing crisis, but City Hall keeps turning housing into hotel rooms. The DCP's approval of a hotel that will erase the 40 units at 1719 Whitley is just the latest example of this bizarre practice. You may think the number of units lost is relatively small, but when you look at the pathetic amount of housing the City has produced in recent years for Low- and Moderate-Income households, it should be clear that every unit counts. 

The good news is that after years of abuse, the tenants have gotten organized and are fighting back.  Working with the Los Angeles Tenants Union (LATU), the residents of 1719 Whitley took their case to the Housing + Community Investment Department (HCID). After looking at the long list of documented code violations, HCID ordered the landlord to fix the problems. When he failed to do so, the building was placed in the Rent Escrow Account Program, which means the owner can't collect rent until the building is brought up to code. 

This is an important win for the tenants, but it doesn't change the fact that the hotel project has already been greenlighted. The approval is being appealed both by LATU and United Neighborhoods for Los Angeles (UN4LA). A hearing is tentatively scheduled for October 22 before the Central Area Planning Commission. The action taken by HCID is a good first step. Now let's see if the Commissioners have the good sense to reverse the DCP's decision to turn housing into hotel rooms.

(Casey Maddren is President of United Neighborhoods for Los Angeles (UN4LA [www.un4la.com]), a community group advocating for better planning, and a CityWatch contributor.) Prepped for CityWatch by Linda Abrams.