We Can Decommodify Housing Through Eminent Domain
Eminent domain has long been used to displace working-class people of color in Los Angeles, as in many cities. In a twist, a group of LA tenants is campaigning to use eminent domain to save themselves from eviction.
Hillside Villa tenants gather in front of their building in 2020. (Courtesy of Hillside Villa Tenants Association)
After trying to get an appointment for months, Rene AlexZander and four of his neighbors went to Los Angeles city councilmember Paul Krekorian’s office in December 2021. There, they met with Krekorian and members of his staff to discuss an unprecedented proposal: that the city acquire their building through eminent domain.
Krekorian heads up the committee that is currently reviewing the proposal. “I’ll never forget it,” AlexZander said of the meeting. Krekorian’s deputy chief of staff Matt Hale “looked at me and said, ‘We have to consider what’s best for the taxpayers.’ And I said, ‘We are the taxpayers!’ I called him out. I said, ‘What you’re saying right now is very insulting to us. You try to make us seem as if we’re not significant, when we really are.’”
AlexZander is a twenty-year tenant of Hillside Villa, a 124-unit affordable housing development in Chinatown, Los Angeles. The olive-green building with bright red wrought-iron balcony railings built in 1988 sits in view of several imposing new luxury apartment towers, a reminder of the recent wave of gentrification that has swept the area. For more than three years, AlexZander and his fellow tenants have waged an extraordinary fight to not only remain in their homes but to convince the city to purchase their building using eminent domain, a solution they argue would prevent displacement and create permanently affordable housing.
The thirty-year affordability covenant on the building (a condition of the tax credits and subsidized loans given to the developer in the 1980s) is set to expire, and the landlord, Tom Botz, has announced massive rent hikes that would mean de facto eviction of most tenants. Their fight for eminent domain offers a powerful template for other tenants looking to decommodify housing in hyper-financialized cities.
Eminent domain is a law that gives the government the right to seize, or expropriate, private property for public use, while compensating the property owner. The City of Los Angeles has a long, painful history of using eminent domain for highway expansion, stadium construction, and “urban renewal” efforts — usually displacing communities of color while benefiting corporate developers.
A glaring historical example is the Battle of Chavez Ravine, which resulted in the displacement of eighteen hundred families and the construction of Dodger Stadium. The land, previously held by Mexican-Americans who had gravitated there due to housing discrimination in other parts of the city, was acquired by the Los Angeles Housing Authority, primarily through eminent domain, in 1949.
The area was slated for public housing designed by modernist icon Richard Neutra that would hold thirty-six hundred units. However, with the 1953 election of conservative mayor Norris Poulson, who vehemently opposed public housing construction — and after years of the real estate lobby accusing the Los Angeles Housing Authority of communist infiltration, culminating in a referendum that banned public housing construction in the city altogether — the plans for public housing were abandoned, and City Council approved the sale of Chavez Ravine to Dodger owner Walter O’Malley in 1957.
There’s also the case of Bunker Hill, a once-exclusive enclave of Victorian mansions (and home to Angel’s Flight, the 298-foot funicular known as the “world’s shortest railway”) that became a working-class neighborhood during the interwar period. When City Council voted to purchase the “blighted” land through eminent domain in 1959 and then sold it to private developers to spur a “renaissance” of Downtown, a total of 7,310 units were razed.
Today, Bunker Hill houses a collection of luxury residential buildings, concert venues, museums, gleaming office towers, and hotels (including John Portman’s postmodern landmark Bonaventure Hotel), and heavily policed privatized plazas. These are just two examples of the City of Los Angeles using eminent domain to benefit for-profit projects with little concern for people who lose their homes and are displaced as a result — all of which raises the question of what the city believes constitutes “public use.”
The Hillside Villa tenants argue that eminent domain, rather than being used to benefit corporate developers, should be used to ensure that tenants are able to remain in their homes in a city that is growing increasingly expensive and unsustainable for working-class residents like them. In Los Angeles County, which has an average median rent of $1,773 for a one-bedroom apartment, 75 percent of households were rent-burdened (spending more than 30 percent of their income on housing) even prior to COVID-19, while nearly half were severely rent-burdened. Meanwhile, the number of unhoused Angelenos continues to increase, reaching 66,436 in the 2020 Greater Los Angeles Homeless Count — a number that is expected to rise significantly when the eviction moratorium expires.
By fighting for the use of eminent domain to secure their right to stay put, Hillside Villa tenants are reclaiming the law in a system that is otherwise set up to protect and benefit private developers and landlords, enforced by the Los Angeles Police Department (LAPD) and the Sheriff’s Department who carry out evictions, police private property, and clear encampments. To confront the growing and intersecting homelessness and affordability crises, housing must be decommodified and reclaimed as a public good and human right, not a commodity for profit maximization — and eminent domain can help get us there.
Arriving at Eminent Domain
Initially, the Hillside Villa tenants weren’t pushing for eminent domain. They spent months trying to get their city councilmember, Gil Cedillo, involved, only to see their landlord, Tom Botz, renege on a deal with Cedillo where the city would forgive a loan worth millions of dollars in exchange for a ten-year extension of the affordability covenant. “After the whole 10-year deal went to trash, Cedillo completely shut us down,” said Leslie Hernandez, who moved to Hillside Villa as a young child and has lived there for thirty years. “He told us, ‘Well, there’s nothing else that we could do.’ But before that, we had begun working on eminent domain.” They began to tirelessly lobby a reluctant Cedillo to introduce the motion to City Council. He ultimately did in January 2020.
After receiving notice of the upcoming rent increase in 2018, the tenants, who organize in Cantonese, Spanish, and English, formed the Hillside Villa Tenants Association with support from Chinatown Community for Equitable Development and Los Angeles Tenants Union. They meet weekly in their courtyard (although currently on Zoom due to the Omicron surge), and describe each other as more like family members than neighbors.
Many have lived in the building for decades, including some tenants who were displaced when their apartments were seized through eminent domain in the 1980s to facilitate the Los Angeles Convention Center expansion. Some have lost their jobs during COVID-19, and others have passed away. Some accepted “cash for keys” deals from the landlord and moved out, fearing potential eviction.
Over the years, the tenants have staged countless protests, including in front of the homes of city councilmembers and in front of their landlord’s Malibu residence. They’ve also arranged sit-ins at City Hall and protested in front of Frank Gehry’s Walt Disney Concert Hall, which is built on land seized through eminent domain during the Bunker Hill clearing.
It has been an exhausting three-year effort, but as the tenants see it, they have no choice but to continue. Sonia Rodriguez, who has lived at Hillside Villa for nine years, said (in Spanish): “We’re fighting for affordable housing because, in my case, I have a daughter and also a grandson. And I just wonder what’s going to happen to them if this place stops being affordable.”
The upward of 200 percent rent hikes announced by Tom Botz, which would bring the rent to market rate, reflect both the catastrophic consequences of the financialization of housing that has made Los Angeles one of the least affordable cities in the United States and a center of the nation’s homelessness crisis, as well as the disastrous public-private partnership paradigm that has shaped affordable housing construction over recent decades.
Between 2010 and 2019, rents in Los Angeles County increased by a staggering 65 percent, while median household incomes went up by 36 percent — a significant discrepancy that doesn’t account for the economic devastation experienced by many renters as a result of COVID-19. Meanwhile, more than five thousand affordable units in Los Angeles County were converted from affordable to market rate between 1997 and 2018, and nearly nine thousand units have affordability covenants set to expire over the next eight years, putting even more pressure on renters as each lost affordable unit is accompanied by another low-income household in need of an affordable home.
The expiring affordability covenants stem from the government’s approach to affordable housing construction that relies on private developers to build or rehabilitate rental housing for low- and moderate-income tenants through subsidized programs like the Low-Income Housing Tax Credit (LIHTC). Under LIHTC, state governments are issued tax credits by the federal government and award them to private developers who must meet certain income and gross rent standards for a percentage of units. That percentage of units — for instance 20 percent of units that are occupied by tenants whose incomes are 50 percent or less of the area median income — must be made temporarily affordable, meaning the gross rent does not exceed 30 percent of their income. After a fixed period, the property owner is free to increase the rent to market rate, as Tom Botz wants to do with Hillside Villa. The tenants who cannot afford to pay market rate — with few places to go in a city in need of nearly five hundred thousand affordable homes — are kicked out, allowing landlords to increase their profits.
It’s worth mentioning that affordable housing landlords like Tom Botz often receive additional taxpayer money through the Section 8 voucher program, in which tenants pay 30 percent of their monthly adjusted gross income in rent, while the government covers the rest of their “fair market rent.” Both Section 8 and LIHTC, products of the neoliberal shift in federal housing policy, serve as vehicles for a massive transfer of money from the public sector into the private for-profit housing market (states must only award ten percent of LIHTCs to nonprofits). The annual budget for the LIHTC program alone is around $8 billion, while the Housing Choice Voucher Program budget for 2022 is $30.4 billion.
Privatized affordable housing is folded into for-profit developments and built when and where it suits developers. Yet the provision of housing is incompatible with a public-private approach in which profit accumulation outweighs consideration of housing need; the use value of a place to live (a basic human need) is fundamentally at odds with its hypothetical value as real estate, as Peter Marcuse and David Madden write in In Defense of Housing: The Politics of Crisis. To address the crises affecting housing in any meaningful way, housing must be decommodified and removed from the speculative market.
This can be accomplished through measures that include universal rent control and an expansion of the public housing stock. However, Nixon’s 1973 moratorium on public housing construction, which has essentially remained in place ever since — its current iteration is the Faircloth Amendment, which prohibits federal funding for projects that increase the number of units owned or operated by Public Housing Agencies as of October 1, 1999 — precludes such an expansion, making an appeal of the law paramount to any consequential housing policy proposal. (Alexandria Ocasio-Cortez had attempted to secure a limited exemption of the amendment in Biden’s faltering Build Back Better Act.)
In the meantime, eminent domain presents a unique opportunity for decommodification and for socialized housing governance structures, although in the case of Hillside Villa the post-expropriation management structure has yet to be determined. City Council would first have to pay market rate for the building, which is appraised at $46 million. As several organizers point out, that would amount to a mere fraction of the ever-increasing LAPD budget ($1.76 billion in the fiscal year 2021–2022). And, considering the price of privatized and temporarily affordable housing construction, preserving affordability is actually cheaper than building the same number of new units; $480,000 per unit (2019 figure, so likely even higher now) versus $370,000 per unit under the Hillside Villa proposal.
The Potential of Eminent Domain
The Hillside Villa Tenants Association has shined a light on the inherent flaws of the privatized affordable housing program, while giving City Council an opportunity to break with the history of exploitative and dispossessive eminent domain use. They’ve also shown that organizing around eminent domain to decommodify and ensure permanent affordability has the potential to be a radical path forward for tenants at risk of displacement in Los Angeles and other cities, particularly in light of the moratorium on public housing construction in the United States. And they aren’t the only ones pursuing this path.
In Berlin, the Deutsche Wohnen & Co. enteignen campaign won a successful referendum to expropriate privatized housing from corporate landlords in September 2021, although so far, the new municipal government coalition, led by Social-Democratic Mayor Franziska Giffey, is refusing to implement it. There was also a proposal to expropriate vacant housing in California and make it affordable. And, in 2013, Green Party mayor Gayle McLaughlin pursued a strategy of acquiring and refinancing “troubled loans” through eminent domain to prevent another wave of foreclosures in the wake of the subprime mortgage crisis in Richmond, California, though ultimately the effort was unsuccessful. There are other examples of organizing to reverse the privatization and commodification of energy and water services after decades of neoliberalism, pointing to the possibility of a wider movement coalescing around reclaiming public infrastructure and provisions — including housing — through expropriation.
After a series of delays, requests for information, and dodging of tenants, the fate of Hillside Villa is currently in the hands of the Budget and Finance Committee under Paul Krekorian. If Krekorian’s committee decides to move forward with the proposal, and City Council votes to invoke eminent domain, the ramifications could extend beyond tenants securing the right to remain to potentially reshaping the way the city approaches expiring affordability covenants — but hopefully more fundamentally, how it approaches the provision of housing altogether.
While many critics, predictably, have argued that the proposal is too radical, too impractical, and too expensive, Leslie Hernandez says: “It’s just about keeping it affordable. We’re not asking for anything free.”