JULY 15, 2011 Public Counsel Law Center

Daily Journal: Settlement assures low rents

By Jason W. Armstrong
Hundreds of families living in one of West Los Angeles' last affordable housing complexes will get to hang on to their low-rent privileges under a lawsuit settlement announced Thursday.

The agreement, reached by residents of the Holiday Venice apartment complex and affordable housing advocates with the defendants - both the U.S. Department of Housing and Urban Development and the complex's owners - capped a two-year-old dispute in which the families contended they were at risk of being hit with a 70 percent rent hike.

The lawsuit alleged that by letting the owners pay off their HUD-backed loans early, the federal agency stripped the apartments of certain low-rent protections guaranteed for the period the loans were outstanding.

The settlement, reached Friday, extends affordable rental rates for the residents for 20 years; ensures that no residents are displaced; and gives tenants the right to purchase the properties through a nonprofit organization if the owners decide to sell the development.

The imbroglio involving the 40-year-old, 15-building apartment complex a mile from Venice Beach is one of several recent cases around the country in which tenants have sued to try to stop their buildings in pricey areas from becoming market-rent developments.

Hernan D. Vera, president and chief executive of Public Counsel in Los Angeles, which served as co-counsel for the plaintiffs, said the settlement "preserves Venice as a place where everyone can live."

Co-counsel Alfred M. Clark, a partner at Locke Lord Bissell & Liddell LLP in Los Angeles who also worked on the case pro bono, agreed.

"The potential loss of an already extremely limited supply of affordable housing for low-income families on the westside of Los Angeles threatened not only the residents of the 246 units comprising the Holiday Venice development, but also the rich racial, ethnic and socio-economic diversity that has characterized the Venice community for over a century," Clark said in a statement.

Also representing the plaintiffs was the St. Paul, Minn.-based Housing Preservation Project.

A spokesman for HUD could not be reached for comment at press time Thursday.

Michael A. Taitelman, an attorney for lawsuit co-defendants New Venice Partners and New Venice Investors, owners of Holiday Venice, said his clients are pleased with the settlement.

"The owners have always intended to own these properties long-term and keep them affordable," said Taitelman, a partner with Freedman & Taitelman LLP in Los Angeles.

The case is Holiday Venice Tenant Action Committee v. Donovan, CV09-3912 (C.D. filed June 2009).