After a two-year battle to keep their affordable housing standing at an Oakwood neighborhood apartment complex, residents of Breezes del Mar in Venice have reached an agreement that will maintain their status for the foreseeable future.
A lawsuit brought by the tenants of the affordable housing complex in June 2009 was settled July 8 between the United States Department of Housing and Urban Development (HUD), New Venice Partners and New Venice Investors.
The legal action, Venice Tenant Action Committee v. Donovan stems from the housing agency’s decision in March 2009 to allow GH Capital, which then owned the 246-unit apartment complex formerly known as Holiday Venice, to prepay its HUD-owned mortgages before their maturation date in 2011.
The Venice entities are limited partnerships that are owned by GH Capital, according to the California Secretary of State’s website.
The Argonaut reported in 2009 growing tension between the tenants and GH Capital. It began when they learned that Gregory Perlman, the principal at GH Capital, was seeking to prepay his mortgages before 2011. The residents of Breezes del Mar and other affordable housing advocates, as well as former Rep. Jane Harman and Sen. Barbara Boxer (D-CA) were concerned that this action could lead to the tenants losing their Section 8 status.
“I want to keep affordable housing in Venice, but if the tenants continue to try to stop the progress that I’m making with HUD, then those 246 units will become market rate housing in 2011,” Perlman told The Argonaut in a March 2009 interview.
The lawsuit challenged the prepayment of the development’s HUD-subsidized mortgages as a violation of the National Housing Act, which is meant to prevent displacement where the housing is still serving a need for low-income families.
Families at the low-income complex were facing possible rent increases of up to 70 percent and the loss of the largest federally subsidized housing development on the Westside if the mortgages were paid before their maturation date, according to the plaintiffs’ legal representatives.
“I think this is a great result for the tenants and the community,” Brandon Weiss, an attorney with the Public Counsel, which represented the Breezes del Mar tenants, said of the settlement. “The extension was done in such a way that it ensures affordable housing for the next generation of tenants.”
The settlement extends affordable housing protections for 20 years, ensures that no current households are displaced and gives tenants the right to purchase the properties through a tenant-endorsed non-profit in the event the owners choose to sell the development.
“Venice is a unique place with unique people, and that’s what we are fighting for,” said Kendra Moore, a longtime resident of Breezes del Mar.
Steve Clare, the executive director of the Venice Community Housing Corp., called the settlement a victory for low-income families.
“We’re delighted that we were able to secure a 20-year extension of affordability for the Venice Tenant Action Committee,” said Clare, whose organization was a co-plaintiff in the legal action.
Another resident, Maria Gallegos, said the settlement sets an example for others that may find themselves in similar circumstances.
“In this economy when many families are worried about just having a safe place to live, this agreement shows they can take action,” she said.
Attorney Michael Taitelman, who represented the Venice entities, said the agreement was a “win-win” for both parties and that his client never planned not to have affordable housing for his tenants.
“From my client’s standpoint, we’re very pleased with the deal,” Taitelman said. “My client always intended to hold the properties long-term and I thought the lawsuit did not have any merit.”
Harman and Boxer sent a joint letter to HUD two years ago, encouraging them to decline Perlman’s request to pay off his mortgages at Breezes del Mar.
“The owners had previously sought prepayment of the mortgages in 2001 and (in 2008). Both proposals were denied and in the 2001 decision, HUD acknowledged that prepayment would violate the owner’s contractual agreement and rightfully rejected the owner’s request,” they wrote in an August 2009 letter. “We see nothing new right now that should change that decision.”
Taitelman said he considered the dispute to be between the Breezes del Mar tenants and HUD and not with his client.
Weiss said in addition to the extended protections, there are also provisions in the legal agreement for capital needs assessments and for the owner of the complex to make necessary improvements.
Clare said there was one other thing that he wished would have been included in the settlement. “We would have liked to purchase the property, but 20 years is a long time,” he conceded.
Taitelman reiterated that his client never wanted the Breezes del Mar tenants to lose their status that allows them access to affordable housing. “It was a reasoned result, and I think all of the attorneys involved did a good job in working towards that goal,” he said.
Weiss credited his clients for showing determination in pursuing the legal action and not giving up. “We were their legal representatives, but they really drove the bus and fought for what they believed in,” the attorney said. “I think this shows that it’s possible for tenants to stand up for what they think is right.”
Moore said the settlement not only preserved affordable housing for current tenants but for future residents of Breezes del Mar as well.
“My family moved to Venice to make a better life for themselves,” she said. “Whether you’ve lived here your whole life or just arrived here, (now) families have a chance to build a new life.”
A community action group, People Organized for Westside Renewal (POWER), assisted the tenants during the litigation.