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FINDING A WAY HOME

Bucking responsibility

May 15, 2006

FOR DECADES, CITY HALL has been trying desperately to woo more real estate developers to downtown Los Angeles, offering tax breaks and other incentives in the hopes of replenishing the decayed historic core with a new residential population of urban pioneers. Now that the long-promised revitalization is finally gathering steam, local politicians are trying to nip success in the bud by shifting their own shortcomings onto private citizens who have the nerve to want to participate in the boom.

Last week, the City Council approved a misguided one-year moratorium, with an option of a second year, on the conversion or demolition of low-cost residential hotels across the city. The move will have the biggest impact downtown, where a growing number of the area's 250 hotels are being transformed into higher-rent loft apartments and even commercial space. The measure was spearheaded by Councilwoman Jan Perry, whose district includes skid row, because she is concerned that many poor residents who live in the hotels will have nowhere to go once the buildings are sold. Even if the diagnosis is right, the cure is dead wrong.

According to estimates, the number of available low-income units downtown has fallen by almost 10% in the last decade, and an additional 2,000 are up for conversion. Assuming that it's a good idea to keep a cluster of run-down residential hotels near a permanent homeless population, the city has two basic options: build the housing itself, or offer incentives to builders. Instead, it chose a third way -- forcing private developers to deal with the region's affordable housing crunch by preventing them from freely managing their own property.

As real estate values have climbed into la-la land, and the ranks of the working poor and just plain poor have grown, city officials have made repeated noise about building as many as 5,000 units of affordable housing a year. Instead, they built only a fraction of that. The result is that people across the region are having a harder time finding low-cost housing.

It will take a long time for the city to make up for lost time. A good beginning could be Mayor Antonio Villaraigosa's proposed $1-billion housing bond -- which could be on the ballot in November -- to pay for thousands of heavily subsidized apartments. Or the city could follow the lead of San Francisco Mayor Gavin Newsom and save the buildings by offering to take over and drastically improve the day-to-day management of worn-down residence hotels. There are other solutions out there, but making a long-dormant property market less liquid isn't one of them.

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