Special Meeting - Ad Hoc on Community Care Facilities Committee

Called by Committee Chair SPECIAL MEETING - AD HOC ON COMMUNITY CARE FACILITIES COMMITTEE

Wednesday, April 2, 2014

ROOM 1010, CITY HALL - 9:00 AM 200 NORTH SPRING STREET, LOS ANGELES, CA 90012

MEMBERS: COUNCILMEMBER MITCHELL ENGLANDER, CHAIR COUNCILMEMBER JOSE HUIZAR COUNCILMEMBER MIKE BONIN COUNCILMEMBER FELIPE FUENTES COUNCILMEMBER CURREN D. PRICE, JR.

(Patrice Lattimore - Legislative Assistant - (213)-978-1056 or email [email protected]) Click here for agenda packets

Note: For information regarding the Committee and its operations, please contact the Committee Legislative Assistant at the phone number and/or email address listed above. The Legislative Assistant may answer questions and provide materials and notice of matters scheduled before the City Council. Sign Language Interpreters, Communication Access Real-Time Transcription (CART), Assistive Listening Devices, or other auxiliary aids and/or services may be provided upon request. To ensure availability, you are advised to make your request at least 72 hours prior to the meeting/event you wish to attend. Due to difficulties in securing Sign Language Interpreters, five or more business days notice is strongly recommended. For additional information, please contact the Legislative Assistant listed above.

ITEM NO. (1) 14-0118 Verbal report by the Department of City Planning and Building and Safety relative to definitions regarding family and types of shared housing arrangements, enforcement, and related matters.

If you challenge this Committee's action(s) in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice, or in written correspondence delivered to the City Clerk at or prior to, the public hearing. Any written correspondence delivered to the City Clerk before the City Council's final action on a matter will become a part of the administrative record.

Materials related to an item on this agenda submitted to the committee after distribution of the agenda packet are available for public inspection in the City Clerk's Office at 200 North Spring Street, Room 395, City Hall, Los Angeles, CA 90012 during normal business hours. MITCHELL ENGLANDER Los ANGELES CITY COUNCILMEMBER, TWELFTH DISTRICT

February 13,2014

Holly Wolcott, Interim City Clerk City Hall, Room 360 Los Angeles, CA 90012

RE: Council File 14-0118

Dear Ms. Wolcott:

As the Committee Chair, I request that CF 14-0118 be designated as the main Council File for the Ad Hoc Committee on Community Care Facilities. The Committee is tasked with discussing community care facilities, which may include topics such as shared housing, related federal and state laws, the City's Zoning Code, licensing, and enforcement.

I further request that all future reports, documents or records pertaining to or generated by this Committee be assigned to this file.

Sincerely,

~EN Los Angeles Ci Council President Pro Tempore Councilmember, Twelfth District

cc: Patrice Lattimore, City Clerk

City Hall Office It 200 N. Spring Street, Room 4050 Los Angeles, CA 90012. Phone (213) 473-7012" Fax (213) 473-6925 Chatsworth Office. 9207 OakdaJe Ave.• Chatsworth, CA 91311 • Phone (818) 882-1212· Fax (818) 701-5254 e'Ji:ffi~·.s- www.CD12.org @ Antonio R.Vlllaralgosa. Mayor ul\:~[jment Mercede$ Marql.le~. General Manager

1200 W. 7th Street. 9th Fl.. tos Angeles. CA 90017 Date:_e2- 5' -1""/ Ie! 213.808.8908 i [a~ 213.808.BoI6 www.1acily.orgllahd Submit.tedin.•.ltd. i/!)e.". . committeeettl/~~m.- e" Ft:.. .,....c:.~ rr~.1 Council File No: 1J./~aU'2 Item No.: ---- ~r_~JzlJdd.:#pp ley 'tf¥.!4fIt'tn-ey

ANALYSIS OF IMPEDIMENTS

FAIR HOUSING CHOICE

CITY OF LOS ANGELES

January 2006

An Equa! Opportunity Affirmative A

E.l Purpose of the Report

Through the federally funded Community Development Block Grant (CDBG) and HOME Investment Partnerships (HOME) programs, among other state and local programs, the City of Los AngeJes works to provide a decent living environment for all. Pursuant to CDBG regulations [24 CFR Subtitle A §91.22S(a)(1)J, to receive CDBG funds the City must certify that it "actively furthers fair housing choice" through the following:

• Completion of an Analysis of Impediments to Fair Housing Choice (AI); • Actions to eliminate identified impediments; and • Maintenance of fair housing records.

The City of Los Angeles is committed towards providing equal housing opportunities for all residents. The fundamental goal of this commitment is to eliminate housing discrimination and to make housing choice a reality.

This Analysis of Impediments (AI) to Fair Housing Choice report represents the City's objective assessment of the nature and extent of fair housing concerns in the City, and the potential impediments to making fair housing choice available to its residents. Based on this assessment, the City will develop an action plan with timeline and objectives to address the impediments Identified.

E.2 Defining Fair Housing ,

Throughout this report, fair housing is defined as;

A condition in which individuals of similar income levels in the same housing market have a like range of choice available to them regardless of race, color, ancestry, national origin, religion, sex, disability, age, marital status, familial status, sexual orientation, source of income, or any other category which may be defined by law now or in the future.

Impediments to fair housing choice are:

Any actions, omtsstons, or decisions taken because of race, color, ancestry, national origin, religion, sex, disability, agel marital status, familial status, sexual orientation, source of income which restrict housing choices or the availability of housing choices; or

Any actions, omissions, or decisions which have the effect of restricting housing choices or the availability of housing choices on the bests of race, color, ancestry,

Executive Summary E-l Analysis of Impediments to Fair Housing Choice

national origin, religion, sex, disability, age, marital status, familial status, sexual orientation source of income.

Though critical, the lack of affordable housing is not considered a fair housing issue in itself. Neither federal nor State fair housing laws identify low and moderate income households as a protected class. While housing affordability is not a fair housing issue per set the increased demand for housing and the dwindling supply may create conditions where fair housing violations become a common part of the competition in the housing market. This study therefore assesses the impact of high housing costs in the City on low and moderate income households, and households with special housing needs. Fair housing concerns may arise to the extent that the lack of affordable housing disproportionately impacts groups that are protected by fair housing laws.

.E.3 Scope of AI Analysis

This AI reviews the laws, regulations, conditions or other possible obstacles that may affect an individual or a household's accessto housing. Specifically, the AI contains:

m A comprehensive review of the laws, regulations, and administrative policies, procedures, and practices;

II An assessment of how those laws, regulations, policies, procedures, and practices affect the location, availability, and accessibility of housing; and

.. An assessment of conditions, both public and private, affecting fair housing choice.

E.4 Community Participation

As part of the AI process, the report incorporates the issues and concerns of residents, housing professionals, and service providers, To assure the report responds to community concerns, an outreach program consisting of the following was conducted:

• Five community workshops

II Residential fair housing survey .. Fair housing focus group meetings with service providers

II Interviews with key service providers .. Interviews with housing industry representatives • Interviews with financial institutions and housing companies

E.S Summary of Report

E.S.l Community Profile

The City of Los Angeles is the second largest city in the nation, with residents representtnq hundreds of countries and every continent. Race and ethnicity have implications on housing choice in that certain socioeconomic variables correlate with race. For instance, ethnic minority populations in Los Angeles have not achieved

E-2 Executive Summary \

City of Los Angeles homeownership as readily as the White population. Minority households are more reliant on the rental housing market for accommodation and may be disproportionately impacted by fair housing issues in the rental market.

Households with different characteristics have unique housing needs and may face different impediments in the housing market. Large households, seniors, and the disabled are "special needs" households examined in the AI, as summarized below.

Large households have special housing needs due to their generally lower per-capita income and the lack of adequately sized, affordable housing. Large households often face discrimination in the housing market, particularly in the rental housing market. This special needs group was found to have experienced a higher level of housing problems (cost burden, overcrowding, and substandard housing conditions) than other households did in Los Angeles. Almost all (93 percent) of large renter-households experienced housing problems.

Seniors, particularly those with disabilities, often face increased difficulty in finding housing accommodations or face targeted evictions. Their low-Income status limits their ability to balance the need for housing and other necessities such as healthcare.

Fair housing choice for persons with disabilities may be compromised based on the nature of their disability. While housing discrimination is not covered by the Americans with Disabilities Act (ADA), the Fair Housing Act prohibits housing discrimination against persons with disabilities, including persons with HIVjAIDS. Persons with physical, mental, and developmental disabilities often require special housing to accommodate their conditions, and may face discrimination in the housing market.

Homeless persons also face a range of housing issues including affordability, discrimination, and lack of adequate housing options. The housing needs of this group is further compounded by the fact that almost half of the homeless people have one or more disabilities.

Persons with HIV I AIDS face an array of barriers to obtaining and malntalning affordable, stable housing. For many, the persistent shortage of stable housing is the primary barrier to consistent medical care and treatment. Many people face illegal eviction from their homes when their illness is exposed.

E.S.2 Lending Practices

One of the key aspects of fair housing choice is equal access to credit for the purchase or improvement of a home. Using Home Mortgage Disclosure Act (HMDA) data, the AI reviews the lending practices of financial institutions and the access to financing for all households, particularly minority households and those with very low- or low- incomes. The AI also examines lending patterns in low and moderate-income neighborhoods and areas of minority concentration. Both conventional and government-backed loans were examined.

Executive Summary E-3 Analysis of Impediments to Fair Housing Choice

E.S.3 Public Policies

Public policies may affect the pattern of housing development, the availability of housing choices, and access to housing. The AI reviews the various policies that may impact housing choices in Los Angeles. Policy and planning documents adopted by the City and associated agencies were reviewed to evaluate the potential impediments to fair housing choice and affordable housing development, including local municipal, building, occupancy, health, and safety codes.

E.S.4 Current Fair Housing Profile

Implementation of fair housing practices is achieved through a network of realtors, apartment associations, housing associations, fair housing providers, and the courts. The AI provides an overview of issues identified by residents and service providers via interviews and surveys; institutional structure of the housing industry and how they may impact fair housing; and fair housing services available to residents.

E.6 Impediments and Recommendations

E.6.1 Impediments

Impediments identified can be grouped into private sector impediments induced by market conditions and socioeconomic characterlstlcs, and public sector impediments resulted from regulations, policies, and procedures. When identifying recommendations, this AI focuses on actions that are directly related to fair housing issues and can be implemented within the resources and authority of the participating jurisdictions, as well as within the five-year timeframe of this AI. General recommendatlons, such as supporting the efforts of other agencies or enhancing affordability, are not included.

Access to Financing

.. conventional home loan financing, income: Approval rates were highest among the upper-income applicants and lowest among lower-income applicants. The ability of lower-income households in accessing financing is an ongoing housing affordability issue, but not a fair housing issue per se.

• Conventional home loan financing, race/ ethnicity: White, JOint, and Asian applicants had the highest approval rates throughout the City while Black applicants consistently had the lowest approval rating. Additionally, approval rates vary widely among ethnic groups within the same income categories. Black and Hispanic applicants frequently received the lowest approval rate regardless of income.

.. Government-backed loans: Overall applications for government-backed loans were relatively low for most ethnlcttles. One exception is Hispanics who are overrepresented in the applicant pool.

• Lenders: Approval rates differ significantly between lenders in Los Angeles, with the largest discrepancy at 34 percentage points,

E-4 ExecutiveSummary \

City of Los Angeles

• Subprime lending activity: This AI found that loan applicants in the Harbor Area had significantly higher approval rates by subprime lenders than all lenders as a whole.

According to HUD's 2000 analysis of HMDA data for Los Angeles County, minorities and residents of low-income neighborhoods are more likely than others to receive loans on the subprime market. UCLAstudies.also found evidence of a relationship between subprime lending and low-income, highly tax-delinquent areas with many elderly and minority residents. It was also found that African- Americans are approximately twice as likely as White applicants to refinance on the subprime market.

• Purchased loans: In recent years, the practice of selling mortgage loans by the originators to other lenders is prevalent. Alleqations have been made that predatory lending is more likely to occur with this practice. Within the City's Neighborhood Service Areas, the percentage of loans purchased ranged as high as 43 percent in the North Valley area. Among racial groups, Blacks had the highest percentage of loans purchased, with 17.1 percent, followed closely by Hispanics with 16.9 percent.

Public Policies

• Zoning: Despite the apparent capacity of the City to accommodate additional housing for all income and special needs groups, a study prepared in 2000 concludes that most of the available development capacity is in small parcels that would be difficult to assemble for feasible residential projects and that differences in building code requirements for commercial and residential development could impede mixed-use projects in commercial areas.

• Regulations Affecting Housing Choice for Special Needs Groups: According to a study prepared for the Los Angeles Housing Department, the City's zoning code contains several potential impediments to fair housing choice. These potential impediments include definitions affecting occupancy of housing; use definitions; and reasonable accommodations for persons with disabilities. Additionally, recovery homes are currently not permitted within 600 feet of a school.

• Section 8 vouchers: Long waiting periods for assistance are common since demand often exceeds the limited resources available. The financial incentives to participate in the Section 8 program are less attractive in a tight housing market than in a housing market with high vacancy rates. Primarily in economically depressed neighborhoods, where the housing and neighborhood conditions are less than ideal, would voucher recipients likely find rental units that accept voucher payments. Researchershave also found that owners accepting Section 8 vouchers prefer senior households to families. This practice creates a potential fair housing concern.

• Coordination with Housing Authority: Housing Authority monitors only fair housing issues covered by Federal law. State protected classes are often not listed on Housing Authority materials. There have been complaints that the Housing Authority is non-responsive with regard to fair housing complaints.

Executive Summary E-S Analysis of Impediments to Fair Housing Choice

Fair Housing Services

• Need for expanded capacity: The City's geography and dense population make outreach and assistance to all residents difficult. The community outreach meetings conducted for the report revealed that residents are oftentimes simply unaware of their rights and do not know where to begin when they feel they have been discriminated against. There appears to be a need for additional fair housing service capacity in order to reach more residents and provide more comprehensive service.

• Need for increased assistance to homebuyers; Fair housing services often focus more on the rental market and less on the home purchase market. Although the majority of housing discrimination cases typically arise from rental situations, there are indications that potential homebuyers have experienced discrimination as well.

• Limited number of fair housing service providers: Only three fair housing service providers serve the entire County of Los Angeles - Housing Rights Center, Fair Housing Council of San Fernando Valley, and Fair Housing Foundation. Each of these three fair housing councils provides services for specific regions within the County. The limited number of qualified fair housing service providers offers little choice for the City.

E.6.2 Actions

While the AI identifies a number of potential issues, certain issues are beyond the ability of a local jurisdiction to address, such as those related to lending practices. The actions identified below represent those that can be feasibly addressed by the City.

Housing and Household Characteristics

Reasonable Accommodation Ordinance: In response to the increased concern over housing problems faced by persons with disabilities, the City Council approved the Reasonable Accommodation Ordinance that outlines provisions for reasonable accommodation and the process and procedure for requesting accommodation and zoning changes. The Ordinance also addresses most of the impediments identified in the November 2002 Fair Housing Impediments Study by Mental Health Services, Inc. The City will:

• Begin implementation of the ReasonableAccommodation Ordinance in 2006. • Explore solutions for addressing the 600-foot distance requirement between recovery homes and schools.

Access to Financing

Predatory Lending Ordinance: In response to the rising concerns regarding predatory lending practices in the Los Angeles area, the City adopted the Anti-Predatory Loans Ordinance. However, a Similar ordinance adopted by the City of Oakland was challenged in court. Supreme Court decision on the Oakland ordinance indicated that local jurisdictions have no authority to impose additional restrictions beyond state and federal regulations on lenders. The City of Los Angeles will pursue:

E-6 Executive Summary City of Los Angeles

• Further investigation to develop an ordinance to curb predatory lending practices in the City but meet the legal challenge; • Establish other programs/activities to increase awareness and reporting of predatory lending practices; • Work with fair housing service providers to expand outreach to homebuyers; and/or • Work with housing advocates to lobby for stronger State legislation to curb predatory lending.

Public Policies

Affordable housing pollcles and incentives: Many of the City's fair housing issues, particularly those faced by renters, stem from a lack of affordable housing choice for lower income households. The shortage of affordable housing is not a fair housing concern in itself; however, this situation created a market condition that is conducive to discriminatory practices. With an abundance of willing takers and short housing supply, landlords are more likely to discriminate and screen out "undesirable" tenants.

In addition to providing direct subsidies for the construction of affordable housing using a variety of funding sources (e.g. HOME,CDBG, HOPWA,and redevelopment housing set-aside funds), the City may consider developing appropriate incentives and policies to expand affordable housing opportunities. The City may explore the following options:

• Inclusionary housing policy (under study) i • Commercial linkage fees; • Housing options for the homeless, including emergency shelters, transitional housing, supportive housing, and permanent housing; • Use of City-owned vacant/underdeveloped properties for affordable housing; and/or • Incentives to consolidated small lots for affordable housing.

Improve coordination with Housing Authority: As an agency receiving HUD funds, the Housing Authority of the City of Los Angeles (HACLA) is also required to actively further fair housing choice through: 1) completion of an Analysis of Impediments to Fair Housing Choice; 2) Actions to eliminate identified impediments; and 3) Maintenance of fair housing records. HACLA is responsible for conducting Its own AI to evaluate impediments specific to the agency. However, as part of the City's AI, impediments relating to the policies, procedures, and operation of HACLAhave been identified. The City should coordinate with HACLAto address the following:

• Address findings in HACLA'sAI that relate to larger City policies, procedures, and operation; • Coordinate the distribution of fair housing materials that cover not only the federal but also the State protected classes; and • Arrange with the fair housing service providers to offer fair housing education workshops with Section 8 and public housing residents.

Fair Housing Services

Fair housing services review: In order to better design a fair housing program that addresses the specific needs of residents, the City should periodically review the scope of work for fair housing services.

Executive Summary E-7 Analysis of Impediments to Fair Housing Choice

Reporting on fair housing services should not only focus on "outputs" but also "outcomes" of services. Outcome-based performance measures allow the City to better evaluate the cost effectiveness of various service components. For example, instead of reporting outreach efforts based on the number of pieces of literature distributed or number of presentations made, reporting should include information on increased reporting as a result of outreach efforts.

Another concern regarding fair housing services is the lack of qualified comprehensive fair housing service providers in the region. Over the long term, lack of competition may potentially lead to decreased levels of services, responsiveness, and accountability.

Discussions with the fair housing service providers indicate that the appropriate scope of work is often a balance between needs and funding availability, If funding is available, the fair housing service providers recommend the following areas of improvements/additional services:

.. Proactive outreach to immigrant communities, persons with disabilities, and gay/lesbian/transgender/bisexual persons • Increased budget for sales audits .. Technology improvements

II Special study to evaluate the effectiveness of outreach approaches

To improve fair housing services, the City should:

" Initiate a comprehensive review of its contract requirements for providing fair housing services. .. Establish quantitative and qualitative performance measures and research into comparable cities' fair housing services, .. Consider expanding scope of work for future years to address discriminatory practices in the homebuying process, Specifically, audits/testing may need to be performed periodically for home sales and lending. ,. Restructure its RFP for fair housing services to allow for more competition in proposals from service providers in order to expand capacity, • Continue the Don't Borrow Trouble Campaign.

E-8 Executive Summary Introduction

1.1 Purpose of Report

Through the federally funded Community Development Block Grant (CDBG) and HOME Investment Partnerships (HOME) programs, among other state and local programs, the City of Los Angeles works to provide a decent living environment for all. Pursuant to COBG regulations [24 CFR Subtitle A §91.22S(a)(1)], to receive COSG funds the City must certify that it "actively furthers fair housing choice" through the following:

• Completion of an Analysis of Impediments to Fair Housing Choice (AI); • Actions to eliminate identified impediments; and • Maintenance of fair housing records.

This Analysis of Impediments (AI) to Fair Housing Choice report represents the City's efforts in making an objective assessment of the nature and extent of fair housing concerns in the City, and the potential impediments to making fair housing choice available to its residents. Based on this assessment, the City will develop an action plan with timeline and objectives to address the impediments identified,

1.2 State and Federal Fair Housing Laws

Fair housing is a right protected by both Federal and State of California laws. Among these laws, virtually every housing unit in California is subject to fair housing practices. Federal Laws

The federal Fair Housing Act of 1968 and Fair Housing Amendments Act of 1988 (42 U.S. Code §§ 3601-3619, 3631) are federal fair housing laws that prohibit discrimination in all aspects of housing, including the sale, rental, lease or negotiation for real property. The Fair Housing Act prohibits discrimination based on race, color, religion, sex, familial status, or national origin. In 1988, the Fair Housing Act was amended to extend protection to familial status and people with disabilities (mental or physical),

Introduction 1-1 Analysis of Impediments to Fair Housing Choice

Specifically, it is unlawful to:

II Refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin.

D Discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of race, color, religion, sex, familial status, or national origin.

II Make, print, or publish, or cause to be made, printed, or published any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin, or an intention to make any such preference, limitation, or discrimination.

II Represent to any person because of race, color! religion, sex, handicap, familial status, or national origin that any dwelling is not available for inspection, sale! or rental when such dwelling is in fact so available.

II For profit! induce or attempt to induce any person to sell or rent any dwelling by representations regarding the entry or prospective entry into the neighborhood of a person or persons of a particular race, color, religion, sex, handicap, familial status, or national origin.

Reasonable Accommodations and Accessibility: The Fair Housing Amendments Act requires owners of housing facilities to make "reasonable accommodations" (exceptions) in their rules, policies, and operations to give people with disabilities equal housing opportunities. For example, a landlord with a "no pets" policy may be required to grant an exception to this rule and allow an individual who is blind to keep a guide dog in the residence. The Fair Housing Act also requires landlords to allow tenants with disabilities to make reasonable access-related modifications to their private living space, as well as to common use spaces, at the tenant's own expense. Finally, the Act requires that new multi-family housing with four or more units be designed and built to allow access for persons with disabilities. This includes accessible common use areas, doors that are wide enough for wheelchairs, kitchens and bathrooms that allow a person using a wheelchair to maneuver, and other adaptable features within the units.

The Fair Housing Act also provides for remedies. Enforcement procedures are outlined in the act. California Laws

The State Department of Fair Employment and Housing (DFEH) enforces California laws that provide protection and monetary relief to victims of unlawful housing practices. The Fair Employment and Housing Act (FEHA) (Gov. Code §§12955 et seq.) prohibits discrimination and harassment in housing practices, including:

• Advertising • Application and selection process • Unlawful evictions • Terms and conditions of tenancy

1-2 Introduction City of Los Angeles

• Privileges of occupancy • Mortgage loans and insurance • Public and private land use practices (zoning) • Unlawful restrictive covenants

The following categories are protected by FEHA:

• Raceor color • Ancestry or national origin • Sex • Marital status • Source of income • Sexual Orientation • Familial status (households with children under 18 years of age) • Religion • Mental/Physical Disability • Medical Condition • Age

In addition, the FEHA contains similar reasonable accommodations and accessibility provisions as the Federal Fair Housing Amendments Act.

The Unruh Civil Rights Act provides protection from discrimination by all business establishments in California, including housing and accommodations, because of age, ancestry, color, disability, national origin, race, religion, sex, and sexual orientation. While the Unruh Civil Rights Act specifically lists "sex, race, color, religion/ ancestry, national origin, disability, or medical condition" as protected classes, the California Supreme Court has held that protections under the Unruh Act are not necessarily restricted to these characteristics.

Furthermore, the Ralph Civil Rights Act forbids acts of violence or threats of violence because of a person's race, color, religion, ancestry, national origin, age, disability, sex, sexual orientation, political affiliation, or position in a labor dispute (California Civil Code section 51.7). Hate Violence can be: verbal or written threats; physical assault or attempted assault; and graffiti, vandalism, or property damage. Fair Housing Defined

In light of the various pieces of fair housing legislation passed at the federal and state levels, fair housing throughout this report is defined as follows:

A condition in which individuals of similar income levels in the same housing market have a like range of choice available to them regardless of race, cotor, ancestry, national origin, religion sex, disability, age, marital status, familial status, sexual orientation, source of income, or any other category which may be defined by law now or in the future.

Introduction Analysis of Impediments to Fair Housing Choice

Impediments Defined

Within the legal framework of federal and state laws and based on the guidance provided by the U.S, Department of Housing and Urban Development (HUD) Fair Housing Planning Guide, impediments to fair housing choice can be defined as:

• Anv ections, omissions, or decisions taken because of race, color, ancestry, national origin, retiqion, sex, disability, age, marital status, familial status, sexuet orientstion, source of income which restrict housing choices or the availability of housing choices; or • Any actions, omissions, or decisions which have the effect of restricting housing choices or the availability of housing choices on the basis of race, color, ancestry, national origin, religion, sex, disability, age, marital status, remttiet status, sexual orientation, source of income,

1.3 Scope of Analysis

This Analysis of Impediments (AI) to Fair Housing Choice provides an overview of laws, regulations, conditions or other possible obstacles that may affect an individual or a household's access to housing. The AI involves:

" A comprehensive review of the City's laws, regulations, and administrative policies, procedures, and practices;

II An assessment of how those laws, requlatlons, and administrative policies, procedures, and practices affect the location, availability, and accessibility of housing; and

" An assessment of conditlons. both public and private, affecting fair housing choice.

1.4 Organization of Report

This report is divided into six chapters, as described below:

Chapter 1: Introduction w Explains the purpose of the Analysis of Impediments (AI) to Fair Housinq, defines "fair housing," and outlines the scope of this analysis,

Chapter 2: Community Outreach - Describes the community outreach program undertaken to solicit input from resldents, service providers, and housing professiona Is,

Chapter 3: Community Profile - Presents demographic, income, and housing characteristics in the City of Los Angeles, as well as transportation access to job centers. Evaluates if community care facilities and public and assisted housing projects are unduly concentrated. Presents the degree of housing segregation based on race.

1-4 Introduction City of Los Angeles

. Chapter 4: Lending Practices - Assesses the access to financing for different groups.

Chapter 5: Public Policies - Analyzes various public policies and actions that may impede fair housing in the City.

Chapter 6: Fair Housing Profile - Evaluates existing public and private proqrams, services, practices, and activities that aid in providing fair housing in the City: assessesthe nature and extent of fair housing complaints and violations in the City.

Chapter 7: Conclusions and Recommendations - Summarizes the findings regarding fair housing issues in the City of Los Angeles and provides recommendations for furthering fair housing practices.

1.5 Preparers of Report

This report was prepared by Cotton/Bridges/Associates under contract to the City of Los Angeles Housing Department, Preparation of this report was funded with Community Development Block Grant (CDBG) administration funds,

Introduction 1-5 Community Outreach

This Analysis of Impediments report has been developed to provide an overview of laws, regulations, conditions! or other possible obstacles that may affect an individual's or a household's access to housing. As part of this effort, the report incorporates the issues and concerns of residents, housing professionals, and service providers. To assure the report responds to community needs! an outreach program consisting of workshops, focused group meetings! interviews with service providers and housing experts, and a fair housing survey was conducted in the development of this report. This chapter describes the outreach program conducted.

2.1 Public Outreach

To reach the various segments of the City residents, several methods were used to obtain input:

.. Five public workshops .. Residential fair housing survey " Fair housing focus group meetings with service providers " Interviews with key service providers

II Interviews with housing industry representatives .. Interviews with financial instltutions and housing companies .. Public review of the Draft AI .. Public hearing before the Affordable Housing Commission Public Workshops

Workshops were held in neighborhoods throughout the City to gather input regarding fair housing issues. For each workshop, a brief introduction to fair housing laws was presented, followed by an open discussion period. A total of five workshops were held in June of 2004. The locations and dates of the meetings were as follows:

North and South Valley Marvin Braude Constituent Center June 9 West Los Angeles Oakwood Recreation Center June 10 South Los Angeles/Harbor Area Exposition Park Recreation Center June 15 Central Los Angeles Pio Pico Koreatown Library June 24 East Los Angeles Ramona Hall Community Center June 29

Community Outreach 2-1 Analysis of Impediments to Fair Housing Choice

To encourage attendance and parttctpatton, the workshops were publicized through the following methods:

• Flyers publicizing the June, 2004 workshops were mailed to over 500 organizations throughout the City. In addition to major service providers such as Housing Rights Center, Fair Housing Foundation, and the Fair Housing Council of San Fernando Valley, the mailing included civic organizations, advocacy groups, ethnic organizations, and religious organizations, among others.

• Flyers in English and Spanish were posted on the Housing Department website.

• Flyers in English and Spanish were placed at public counters such as Housing Department public counters (four locations), libraries, and community centers.

Despite extensive outreach efforts, resident attendance at these workshops was limited. In general, meetings on fair housing issues receive little attention from the public, according to fair housing service providers serving various parts of the City. Often, people participate in such meetings. only if they are directly impacted by fair housing issues.

Aside from interested individuals and staff from the City Housing Department, several service providers and housing professionals participated in the fair housing workshops, including representatives from the following:

• Housing Rights Center (HRC) • Fair Housing Foundation (FHF) • Fair Housing Council of the San Fernando Valley (FHCSFV) • Housing Authority of the City of Los Angeles (HACLA) • Assoclatlon of Community Organizations for Reform Now (ACORN) • Council District 8 • Housing Services Agency • Menorah Housing Foundation • Inquilinos Unidos • Inner City Law Center • Legal Aid Foundation • Valley Interfaith Council

The comments received during these public workshops have been incorporated into this AI as appropriate and summarized in Appendix A. Fair Housing Survey

The Fair Housing Survey sought to gain knowledge about the nature and extent of fair housing issues experienced by City residents. The survey consisted of ten questions designed to gather information on a person's experience with fair housing issues and perception of fair housing issues in his/her neighborhood. The survey also included an opportunity for respondents to write in any additional observations or concerns. A copy of the survey is included as Appendix B.

The survey was available in English, Spanish, Korean, Armenian, and Russian. The survey was distributed via the following methods:

2-2 Community Outreach City of Los Angeles

II Copies of the survey were sent to over 500 organizations, together with the flyers publicizing the workshops.

" The survey was posted on the City Housing Department website, City Community Development Department website, and Living Independently in LA website.

" Copies of the survey were placed at public counters such as Housing Department public counters (four locations), libraries, and community centers.

Because responses to the survey were not controlled', results of the survey are used only to provide insight regarding fair housing issues, and cannot be treated as statistically valid. Focus Group Meetings

Several representatives from service providers throughout the City attended two focus group meetings held on August 12 and October 6, 2004. Because they have frequent contact with those most likely to experience housing discrimination, housing, social service, and legal service providers were invited to attend and contribute their observations and insight. Attendees to both meetings included representatives from the following organizations:

" Housing Rights Center ,. Fair Housing Council San Fernando Valley ,. Department of Public Social Services " EI Proyecto del Barrio a Bienestar Human Services m Latin American Civic Association .. Council District 7 " Lutheran Social Services

D Independent Living Center of Southern California

B Neighborhood Legal Services of Los Angeles County " Inner City Law Center • Westside Center for Independent Living " Strategic Actions for a Just Economy " Los Angeles Homeless Services Authority " Pets Are Wonderful Support Los Angeles (PAWS LA) • AIDS Project Los Angeles

B Eviction Defense Network " Fair Housing Foundation " Inquilldos Unidos/United Tenants ,. California Department of Fair Employment and Housing .. Asian Pacific American Legal Center (APALC) .. Department on Disability " HUD Civil Rights Division

A survey with a "controlled" sample would, through various techniques, "control" the socioeconomic characteristics of the respondents to ensure that the respondents are representative of the general population. This type of survey would provide results that are statistically valid but is costly to administer.

Community Outreach 2-3 Analysis of Impediments to Fair Housing Choice

Interviews

In addition to the input given by service providers in attendance at the public workshops and focused group meetings, interviews were conducted via email and telephone to obtain input.

Service providers such as legal aid associations and housing foundations were contacted as these organizations work closely with some of the most vulnerable populations in the City - those who may be most susceptible to housing discrimination. Representatives from various organizations were asked about what they perceived to be the greatest needs of their clients and fair housing challenges they face. The following service providers were interviewed:

• Independent Living Center of Southern California • Los Angeles Family Housing Corporation • Jewish Family Service of Los Angeles • East LA Community Corporation • Asian Pacific American Legal Center • The Accessibility/Housing Foundation Inc. • Valley Interfaith Council

Rental companies and apartment associations involved in the rental process may impact access to housing choice. Different rental offices and apartment associations were contacted to collect information about how they deal with fair housing issues when they arise. Representatives from the following rental companies and apartment associations were interviewed:

• Oakwood Worldwide • Villa Azure • Archstone Playa del Rey • Fairfield Properties, Hampshire Place • Virgil Square and Tower • Apartment Association of Greater Los Angeles • Apartment Owner's Association • Multicultural Real Estate Alliance

Banks and lending institutions are part of the equation that determines whether homebuyers will be able to purchase a house. Active lenders in the Los Angeles area were contacted to get an understanding of their fair housing programs and training options available to employees, and to determine if there were working relationships with any fair housing organizations in the City. Although a number of lenders were contacted (see list below), few financial institutions were available or willing to be intervtewed. Fannie Mae, Century Housing, and Enterprise Foundation were the only lenders provided some input.

• Bank of America • California Mortgage Association • Century Housing • Chase Home Finance • CitiMortgage • Countrywide Home Loans • Enterprise Foundation • Fannie Mae

2-4 Community Outreach City of Los Angeles

.. Freddie Mac m Fieldstone Mortgage Company " Flagstar Bank " Greenpoint Mortgage

II Guarantee Residential Lending .. Metrocities Mortgage, LLC .. National City Bank .. New Century Housing

II WMC Mortgage Company Public Review of Draft AI

The Draft AI was available for public review between December 21, 2005 and February 1, 2006. The Draft AI was available online at the Housing Department's website, www.lacity.org/lahd or can be mailed upon request, In addition, copies of the Draft AI were available for public review at the following locations:

Regional Branch Libraries

.. Arroyo Seco Regional Branch (6145 N, Figueroa, Los Angeles 90042) " Will & Ariel Durant Branch (7140 W. Sunset Blvd., Los Angeles 90046) .. Exposition Park - Dr. Mary McLeod Bethune Regional Branch (3665 S. Vermont Ave., Los Angeles 90007) .. Mid-Valley Regional Branch (16244 Nordhoff Street, North Hills 91343) " North Hollywood - Amelia M. Earhart Regional Branch (5211 Tujunga Ave., North Hollywood 91601) • San Pedro Regional Branch (931 S. Gaffey Street, San Pedro 90731)

II West Los Angeles Regional Branch (11360 Santa Monica Blvd., Los Angeles 90025)

II West Valley Regional Branch (19036 Vanowen Street, Reseda 91335) .. Central Library (650 W. 5th Street, Los Angeles 90071)

Los Angeles Housing Department Public Counter locations

.. 3550 Wilshire Blvd., 15th Floor, Los Angeles 90010 " 6640 Van Nuys Blvd., Van Nuys 91405 .. 690 Knox Street, #123, Los Angeles 90502 .. 8475 S. Vermont Ave., 2nd Floor, Los Angeles 90044

B 3415 S. Sepulveda Blvd., #150, Los Angeles 90034 .. 1200 W. 7th Street, 15t Floor, Los Angeles, 90017

Copies of the Draft AI were also mailed to:

" Each of the City Council Offices " City Administrative Officer " City Attorney

II City Legislative Analyst

II Fair Housing Councils: Housing Rights Center, Fair Housing Foundation, Fair Housing Council of San Fernando Valley " U.S. Department of Housing and Urban Development, Los Angeles Office of Civil Rights .. State Department of Fair Employment and Housing, Los Angeles Office

Community Outreach Analysis of Impediments to Fair Housing Choice

A notice announcing the availability of the Draft AI for public review and opportunity to provide oral comment at a public meeting before the Affordable Housing Commission was mailed to 122 agencies and individuals that included housing professions, nonprofit service providers that serve the special needs populations, and other interested parties.

A comment letter was received from the Shelter Partnership. This letter is included in Appendix D. The Draft AI was revised to incorporate comments from the Shelter Partnershlp.

Public Meeting

The City conducted a public meeting before the Affordable Housing Commission on January 26, 2006, at noon, at the Los Angeles Housing Department (1200 W. 7th Street, 9th Floor, Room 912, Los Angeles 90017). Comments received at the hearing and a copy of the meeting minutes is included in Appendix D.

2-6 Community Outreach Community Profile

The City of Los Angeles is the second largest city in the nation, just behind New York. The people of Los Angeles represent hundreds of countries and every continent. In recent years, many of these people are immigrants from Latin American and Asia. The City's ethnic diversity reflects various socioeconomic characteristics, contributing to the unique spatial distribution of the Los Angeles population.

A key goal for fair housing is to foster an incluslve environment, one where people from all walks of life have the opportunity to live in a decent and SUitablehome, Fair housing is thus concerned with ensuring that: 1) a range in types and prices of housing is available; and 2) all people are treated equally in the rental, sale, or occupancy of housing. This chapter discusses the demographic and housing characteristics in Los Angeles that may affect the ability of households with similar income levels, in the same housing market, to have a like range of housing choices,

Neighborhood Service Areas

In an effort to give greater voice to local neighborhoods, the Los Angeles City Charter was amended in 1999 to create Neighborhood Service Areas (NSA). Areas within Los Angeles represented by an NSA include:

• North Valley • South Valley • West Los Angeles • East Los Angeles • South Los Angeles • Central Los Angeles (covering most of the central city in and around Downtown Los Angeles) • Harbor (including the Port of Los Angeles, Wilmington and San Pedro)

Figure 3-1 illustrates the Neighborhood Service Areas. In order to provide a more accurate representation of demographic, economic and social characteristics, information presented in this chapter is presented by NSA, when possible.

Community Profile 3-1 P d C j f j c

0(; eo a n

U G f NO

CJ NeightJorhood Service Areas D City of Los Angeles Cities/Unincorporated Areas - • - County Boundary -- Freeways - " - " • Major Roads

!E::::::":";:;:~:::J=="~:~":"""""::":=::lMile, m SaUIC8: ~eHSIIs ligal gal. loaD; ti!j tlllu~/iJlijeles GIS flGURf 3·1 CliV of LOS ANGUfS Neighborhood Service Areas Analvsis 01 Impediments to fair Housing Choice City of Los Angeles

3.1 Population Growth and Characteristics

3.1.1 Growth Trends

Consisting of 14 families, Los Anqeles' first settlers founded the City on September 4, 1781. They named the area "EI Pueblo de Nuestra Senora la Reina de los Angeles de Porcluncula" ("The Town of Our Lady, the Queen of the Angels of Porcluncula"). The City of Los Angeles was incorporated on April 4, 1850. At the time of its incorporation, the City had a population of 1,610 and an area of 28 square mlles.! By 1900, spurred by the completion of a railroad into the areal the City population jumped to 102/000. By 2000, Los Angeles had a population of over 3,600,000 and an area of 465 square miles.

The city boundary is irregularly shaped because the City has grown over the years through the annexation of surrounding territory and cities. Several cities - such as Beverly Htlls, Santa Monica, West Hollywood, and Culver City - are surrounded partially or completely by the City of Los Angeles.

Figure 3-2: Population Growth 1850 - 2000

4,000,000r--~. 3,500,000+------3.000,000-l-----~------2,500,000+-----.------:; 2,000,000+--~------: 1,500,000-~------,: 1,000,000+------; 500,000-/------:; O~_T--~~--~~~~ 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

Source: CA Department of Finance

Much of the City is built out except in the San Fernando Valley areas, Overall City population grew nine percent between 1990 and 2002, while North and South San Fernando Valley NSAs experienced a level of growth that almost doubled the citywide average (Table 3-1).

Among the NSAsI the two San Fernando Valley areas (North and South) are the largest with a land mass of approximately 229 square miles. These two NSAs have seen the highest rate of growth since 1990 (Table 3-1). By comparison, the Harbor NSA is the smallest in area (34 square miles) and in population, with the Port of Los Angeles comprising a significant portion of the area. The East Los Angeles areal encompassing neighborhoods such as Boyle Heights, Echo Park and Silverlake, is primarily built out and experienced little population growth in recent years (only one percent between 1990 and 2002),

The Central, West and South Los Angeles NSAs are most densely developed, Specifically, the South Los Angeles NSA had a population density (15,781 persons per square mile) twice of the citywide density (7/850 persons per square mile).

State Department of Finance, Population Estimates, 2004

Community Profile 3-3 Analysis of Impediments to Fair Housing Choice

T bl 3 1 P • I t' G th B A 1990 2002 0/0 Change 1990 2000 1990- I Census I Census 1:::c:r:r~~J2002 North Valley 582,008 651,944 673,137 18% 7,400 16% South Valley 634,800 703,013 724,804 19% 5,140 14% West Los Angeles 375,523 394,671 405,742 11% 4,496 8% Central Los Angeles 633,633 658,983 677,976 18% 14,148 7% East Los Angeles 410,426 405,114 416,063 11% 10,910 1% South Los Angeles 666,955 687,927 706,012 19% 15,781 6% Harbor 182,054 193,168 197,966 5% 5,763 9% Total 3,485,399 3,694,820 3,801,700 100% 7,850 9% Source: City of Los Angeles Planning Department 2004 3.1.2 Race/Ethnicity

Race and Ethnicity Defined

The federal government considers race and Hispanic origin to be two separate and distinct concepts. In the 2000 Census, the following race categories were used:

• "White" refers to people having origins in any of the original peoples of Europe, the Middle East, or North Africa.

• "Black or African American" refers to people having origins in any of the Black racial groups of Africa.

• "American Indian and Alaska Native" refers to people having origins in any of the original peoples of North and South America (including Central America), and who maintain tribal affiliation or community attachment.

• "Asian" refers to people having origins in any of the original peoples of the Far East, Southeast ASia, or the Indian subcontinent.

• "Native Hawaiian and Other Pacific Islander" refers to people having origins in any of the original peoples of Hawaii, Guam, Samoa, or other Pacific Islands.

• "Some other race" was included in Census 2000 for respondents who were unable to identify with any of the above race categories.

Hispanic origin is an ethnicity and in the Census, the terms Hispanic and Latino are used interchangeably. People who identify with the terms "Hispanic" or "Latino" are those who classify themselves in one of the following specific Hispanic or Latino categories: "Mexican", "Puerto Rican", or "Cuban", as well as those who indicate that they are "other Spanish, Hispanic, or Latino." A person of Hispanic Origin can be of any race.

3-4 Community Profile City of Los Angeles

Persons of Hispanic origins in Los Angeles have different socioeconomic characteristics than other ethnic groups, To more accurately portray the racial/ethnic composition of City residents and their associated fair housing concerns, this report isolates the Hispanics (of all races) from non-Hispanic Whites, non-Hispanic Blacks, non-Hispanic Asians, and non-Hispanic others. Throughout tbts report, unless otherwise noted, "Whites" refer to non-Hispanic Whites, "Blacks" refer to non-Hispanic, "Asians" refer to non-Hispanic Asians, and "Others" refer to non-Hispanic others.

Racial and Ethnic Composition

Increasingly, the nation is becoming more diverse in its race and ethnic compositions. The 2000 census shows that at least three out of ten U.s. residents are non-Whites. According to projections by the Census Bureau, the Hispanic population will outnumber the Black population in the U.S. in 2006 and in the year 2030, one out of four residents will be either Hispanic or ASian.2

One of the factors that distinguishes Los Angeles from other metropolitan cities across the nation is its rapid transformation into one of the most diverse and multicultural cities in the country. The City of Los Angeles has already surpassed the projected national profile for 2030 - as of 2000, one in every two City residents was either Hispanic or Asian (Table 3-2). The City's diversity is apparent in the countless restaurants offering a vast variety of world cuisine, as well as by public school children in the Los Angeles Unified School District who speak 90 different languages in their homes."

The City's diverse character is attributable primarily to the 1965 reforms in U,S. immigration policy, officially ending the bias in favor of Northern European immigrants and opening the doors to immigration from Latin America and Asia. Los Angeles, with its historic connections to and proximity with Mexico, as well as its prominent position on the Pacific Rim, became the nation's leading port of entry for immigrants.

The City has a significant Mexican-American population, with 64 percent of the City's Hispanic population being of Mexican heritage as of 2000.4 People from EI Salvador, Guatemala, and Nicaragua form the largest Hispanic communities after those of Mexican origin.

The City's ASian population is diverse. Originally, Chinese were the largest Asian group in the City until the early 20th century when Japanese immigrants began to arrive, Later, a community of Korean political exiles settled in Los Angeles during the Japanese

occupation of Korea in the first half of the 1900s, By 19901 Los Angeles was home to the largest Korean community outside of Korea, Filipinos have immigrated to Los Angeles primarily in search of economic opportunity. Vietnamese have come to the region principally as refugees at the end of the Vietnam War and because of other conflicts in Southeast Asia during the 1970s, In 2000, the largest Asian groups in Los Angeles were Filipinos (27 percent), Koreans (25 percent), Chinese (17 percent), Japanese (10 percent), and Vietnamese (5 percent)."

U.S. Department of State, International Information System, 2000 Los Angeles Unified School District, Office of the Superintendent, Communications & Media Relations, 2004 4 2000 Census 5 Residents indicating an Asian ethnicity alone and not in combination with another race or ethnicity

Community Profile Analysis of Impediments to Fair Housing Choice

Los Angeles is also home to one of the largest Jewish communities in the U.S. Jews from Eastern and Northern Europe first settled in the area in the 19th century, and Russian Jewish immigration increased dramatically during Germany's Nazi dictatorship. After World War II, large groups of Jews from the Middle East also made their home In Los Angeles. Prominent among these later Jewish immigrants are refugees from the 1979 Islamic Revolution of Iran, who usually identify themselves as Persians.

Other large Middle Eastern communities in Los Angeles include Armenians, Arabs, Iranians, and Israelis. These groups have grown dramatically since 1970 primarily because of conflict in their home regions, but also because of the search for educational and economic opportunities.

In 1990, Los Angeles became the first of the largest U.S. cities in which no ethnic or racial group formed a majority. According to the 2000 census, Hispanics, who may be of any race, became the largest ethnic group in the City, representing 47 percent of the City population. Whites made up 30 percent of the City population, Blacks 11 percent, and Asian/Pacific Islanders 10 percent.

Concentrations of White residents are apparent in the South Valley and West Los Anqeles areas (Table 3-2). Hispanicsare highly concentrated in East Los Angeles as well as in South Los Angeles and the Harbor area. Blacks are also concentrated in South Los Angeles, where the White population numbered only three percent of the population. In East LosAngeles where the majority of the population is Hispanic, Blacks comprised only two percent of the population. Asian/Pacific Islander concentrations are found in the Central area. Two predominantly Asian neighborhoods surround downtown Los Angeles - Chinatown to the northeast and Little Tokyo to the east. In addition, 25 percent of the residents in Koreatown are Asian, although today, almost two-thirds of the residents in this community west of the City are actually Hispanics (of any race).

Race/Ethnicity White 32% 50% 61% 27% 12% 3% 25% 30% Hispanic 51% 34% 17% 45% 71% 57% 56% 47% Black 4% 4% 5% 7% 2% 37% 8% 11% Asian 10% 7% 13% 18% 14% 2% 8% 10% Other 3% 4% 4% 3% 2% 2% 3% 3% Source: 2000 Census

Race and ethnicity have implications on housing choice in that certain demographic and economic variables correlate with race. Along with a more diverse population comes an increase in the number of families with children and increased homes with multiple generations living under one roof due to cultural preferences, resulting in larger household sizes. For example, the average household size for Los Angeles was 2.83 in 2000. The average household size for Hispanics was 4.01 while for Whites the average was 2.16.

Economic variables correlate with race/ethnicttv as well. Annual household incomes for many of the City's minority groups trail that of White households. Median household income was lower for Black households ($27,420) and Hispanic households ($28,759)

3-6 Community Profile City of Los Angeles

than for White households ($50,802) in 2000.6 With comparatively limited economic means, Hispanic and Black households face limited housing choice and are more likely to encounter discrimination in a highly competitive housing market.

Housing Discrimination Based on Race/Ethnic Characteristics

New estimates from the U.S. Department of Housing and Urban Development (HUD), based on Urban Institute" research, indicate that while discrimination persists against Blacks and Hispanics searching for homes in major metropolitan areas, its incidence has generally declined since 1989.8

According to Discrimination in Metropolitan Housing Markets, a study by the Urban Institute, when Blacks and Hispanics visit real estate or rental offices to inquire about the availability of advertised homes and apartments, they face a significant risk of receiving less information and less favorable treatment than comparable White customers receive. Specifically, compared with their non-minority counterparts:

II Black renters receive consistently unfavorable treatment in 21.6 percent of their inquiries, down 4.8 percentage points since 1989. Black homebuyers receive consistently unfavorable treatment in 17.0 percent of their inquiries, down 12.0 percentage points since 1989.9

.. Hispanic renters receive conslstentlv unfavorable treatment in 25.7 percent of their inquiries, essentially the same as in 1989. Hispanic homebuyers receive conslstentlv unfavorable treatment in 19.7 percent of their lnqulries, down 7.1 percentage points since 1989.10

Despite signs of progress, significant discrimination remains. This discrimination raises the cost of housing searches for Blacks and Hispanics, creates barriers to homeownership and housing choice, and helps perpetuate involuntary racial and ethnic segregation.

6 2000 Census 7 Urban Institute is a nonpartisan economic and social policy research organization established in 1968 by President Johnson, originally as a blue-ribbon cornmlsstonof government officials and civil leaders to look at the nation's cities and urban populations. The Urban Institute measures effects, compares options, shows which stakeholders get the most and least, tests conventional wisdom, reveals trends, and makes costs, benefits, and risks explicit. B Discrimination in Metropolitan Housing Markets: National Results from Phase I of HDS2000, Margery Austin Turner, Stephen L. Ross, George Galster, John Yinger, Urban Institute 2002 9 Ibid. 10 Ibid.

Community Profile 3-7 Analysis of Impediments to Fair Housing Choice

According to the fair housing service providers'! in the Los Angeles area, 20 percent of housing discrimination complaints filed in the City during FY 2004/05 were related to issues of race, the second most frequent among all types of complaints, after issues related to familial status.

For the Hollywood/Northeast and San Fernando Valley areas, the most prevalent housing discrimination complaints were based on familial status during FY 2004/05. Overall, familial status accounted for 26 percent of all discrimination complaints citywide. However, in the South Los Angeles service area, a higher percentage (28 percent) of the complaints was based on race, although familial status was an equally prevalent basis (26 percent) for discrimination as in other areas. The continuing demographic shift in the area from Blacks to Hispanic may be a cause of this. Many of the complaints alleged a pattern of eviction and harassment of Black tenants by new Hispanic managers and landlords."

Ethnic Neighborhoods

Recent immigrants tend to concentrate in ethnic neighborhoods within metropolitan areas (Figure 3-3). Many of these neighborhoods have their origins in discriminatory housing practices in the early part of the 1900s. As specific groups moved into the region and began to have a larger presence in the City, many graVitated to ethnic neighborhoods where services catered to their language and culture. Not until they reached a certain economic status could they afford to move to other areas.

Highly segregated neighborhoods play a contributing factor in many fair housing violations when rea! estate advertisements are geared towards people speaking a certain language or owners and managers prefer tenants of one ethnlclty to another. Apartment vacancies that are filled by word-of-mouth advertising in concentrated ethnic neighborhoods may result unintentionally in limiting the choices of residents who speak a different language and are looking for a home. .

Some of the more well-known ethnic neighborhoods include:

Boyle Heights: From the 1920s to the 1950s Boyle Heights, located in East Los Angeles, was the City's most diverse neighborhood, serving as home to large concentrations of Jews, MeXicans, and Japanese Americans, as well as Russian Molokans, Blacks, and people of Armenian, Italian, and Chinese descent. Today Boyle Heights is primarily Latino and continues to serve as a port-of-entry for the City's Latino immigrant groups,u

Pico-Union: Located west of Downtown, the Pico-Union neighborhood caters to Latinos, particularly of Central American descent. Pica-Union has served as an attractive destination point for new immigrants. Early residents of the area

11 The Housing Rights Center serves the West, East, and Central Los Angeles areas; the Fair Housing Foundation serves the South Bay and Harbor areas; and the Fair Housing Council of San Fernando Valley serves the North and South Valley areas (see Figure 6-1 in Chapter 6, Current Fair Housing Profile). 12 Ibid. 13 Boyle Heights Neighborhood Sites and Images. University of Southern California website.2004. http://www.usc.edu/dept/LAS/pasejbhprojectjindex01.htm

Community Profile City of Los Angeles

included middle- and upper-income Norwegians, Swedes, Welsh, and Russian Jews. Presently, the Pico-Union neighborhood is predominantly Latino.!"

Chinatown: The present day Chinatown is the City's second Chinatown; the original one was located where Union Station now rests. Many Chinese settled in this once-rural area during the second half of the 19th century. Although most Angellnos of Chinese descent are well integrated into the City's suburbs, many new low to moderate income and elderly Chinese immigrants still regard Chinatown as their entry community because of language and culture. The more affluent have settled and conduct business in the suburban centers of the San Gabriel Valley, PalosVerdes, and Cerritos.

Leimert Park Village: Located southwest of Downtown and bounded by Crenshaw Blvd., Vernon Ave., Leimert Blvd., and 43rd Place, Leimert Park Village has emerged as one of Los Angeles' premier Black cultural centers and commercial districts. is

Little Tokyo: Like the nearby Chinatown, this redeveloped ethnic neighborhood is no longer home to the majority of Angelenos of Japanese ancestry; the neighboring City of Gardena has that distinction. However, Little Tokyo functions as the cultural focal point of the Japanesecommunity.

Fairfax District/Pico Robertson: Since the 1940s, the Fairfax district has been the best-known distinctively Jewish section of Los Angeles with the presence of Orthodox synagogues, kosher butcher shops, and Israeli/Russian/Hebrew bookstores.16 The district is home to many Orthodox, Hasidic, and Reform Jews and is an intricate part of the City's Jewish community. As the neighborhood declined, many affluent and assimilated Jews moved out of the area into the Plco/Robertson neighborhoods and Cheviot Hills.

San Fernando Valley: While Jews initially settled in neighborhoods such as Boyle Heights and the Fairfax district, the allure of new housing and higher status jobs in close driving location from earlier settlements led many Jews to move into the Westside of LosAngeles and the San Fernando ValleyY Following World War II, the valley experienced substantial housing growth and between 1951 and 1979, the Jewish population grew seven-fold in this area." Most Jews settled in the South San Fernando Valley area along a corridor that extends west on either side of Ventura Boulevard into Encino, Sherman Oaks, Tarzana and Woodland Hills. The establishment of the Skirball Cultural Center for Jewish Heritage, University of Judaism, and Stephen S. Wise Temple near 1-405 and Mullholland Drive has made the area a focus of the Jewish community in Los Angeles.

Koreatown: Generally bounded by Western Avenue, Melrose Avenue, Vermont Avenue and Olympic Boulevard, Koreatown is a hub for cultural, social, and business life for Korean Americans. From a modest population of less than

14 Loukaitou-Sideris, Anastasia. The Byzantine Latino Quarter: Creating Community in Los Angeles' Inner City. Journal DISPVolume 140, 2000 15 LANI and the Leimert Park Project. Public Roads Vol. 64 Number 2. U.s. Dept. of Transportation 16 Allen, James P. and Turner, Eugene. The Ethnic Quilt; Population Diversity in Southern California. California State University, Northridge, 1997 17 Ibid. 18 Ibid.

Community Profile 3-9 Analysis of Impediments to Fair Housing Choice

10,000 in 1970, the Korean population in this area once grew to an estimated 160,000 people, making it the largest concentration of Koreans outside of Korea. Because of the changing demographics in Los Angeles, most of the people now living in this area are Mexican or Central American, but Koreans are the predominant business owners.

3-10 Community Profile \ \ '. \. \

VENTURA COUNTY

ltGE~n II Boyle Heights EJ Pico-U nion lEI Chinatown D Leimer! Park Village III Little Tokyo m Fairfax District/Pco-Robertson D San Fernando Valley m Koreatown

CJ Neighborhood Service Areas o City of Los Angeles [ill Cities/Unincorporated Areas - • - County Boundary -- Freeways - - - - - Major Roads 6 .-0-I I I Milt;:; - Sou[ce: Ge~,,,, Tioor Oala 2000; m City 01to; ArlO.I.; GIS;

fiGURE 3-3 LIlY of LOSANGElES Ethnic Neighborhoods Analysis of Impediments to fair Housing Choice Analysis of Impediments to Fair Housing Choice

Residential Segregation

Residential segregation refers to the degree to which groups live separately from one another. The term segregation historically has been linked to the forceful separation of racial groups. However, as more minorities move into suburban areas of Los Angeles County and outside of urban areas, segregation is becoming increasingly self imposed. Originally, many ethnic groups gravitated to ethnic neighborhoods where services catered to them, and not until they reached a certain economic status could they afford to move to suburban areas. Today, living in an ethnic neighborhood is often a rational choice many are making. While some people believe that newly arrived immigrants in highly concentrated ethnic communities may resist blending into the mainstream, primarily because of the proliferation of native-language media and retail businesses, others feel that immigrants living with persons of similar heritage create a comfort zone that may help them transition to the mainstream and improve their economic situation.

The Dissimilarity Index is the most commonly used measure of segregation between two groups, reflecting their relative distributions across neighborhoods (as defined by census tracts). The index represents the percentage of the minority group that would have to move to new neighborhoods to achieve perfect integration of that group. An index score can range in value from 0 percent, indicating complete integration, to 100 percent, indicating complete segregation.

The Dissimilarity Indices among different racial/ethnic groups are presented in Tables 3- 3. Citywide, the highest level of segregation exists between Whites and Blacks (73.7 percent) and the lowest between Asian and Whites (47.1 percent). In most NSAs, the greatest level of segregation was between Whites and Hispanics. The exceptions are West Los Angeles, where Blacks and Whites are most segregated (57.1 percent) and South Los Angeles, where Hispanics and Asians are most segregated (60.98 percent). Compared to other racial/ethnic groups, Asians seemed to be more integrated with the White population.

The Los Angeles Commission on Human Relations annual hate crime reports indicated that race related hate crimes often occur due to interracial association. The most common scenario is Hispanic males targeting other Hispanicsfor associating with Blacks. The report also indicated that rapid demographic shifts are one source of animosity between Blacks and Hispanics, especially in South Los Angeles, which has been predominantly Blacks until more recent large influxes of Hispanics, The Commission's 2002 annual report referenced a study called "Taking America's Pulse II" conducted by the National Conference of Community and Justice. The study found that while Whites see race relations with Blacks as the worst, minorities see relations between themselves and other minorities as the worst. These occurrences may also tend to keep neighborhoods segregated, as the two races might not want to bring unwanted violence into their neighborhoods.

3-12 Community Profile City of Los Angeles

T ble 3 3 I d f Di "I lt -:;~~,:~~City of LosAngeles White 1,095,619 29.6% -- 65.8 Minorityl 2,601,720 70.4% 59.6 -- Hispanic 1,720,045 46.5% 65.8 -- Black 399,099 10.S% 73.7 54.5 Asian 370,336 10.0% 47.1 50.5 NSA: North Valley

~ White 206,071 31.5% -- 58.1 Minority 447,466 6S.5% 48.8 -- Hispanic 335,775 51.4% 58.1 -- Black 27,154 4.2% 48.4 40.2 Asian 65,733 10.1% 27.3 50.9

~ White 352,017 50.01%c -- 52.8 Minority 351,S24 49.99% 44.0 -- Hispanic 239,742 34.06% 52.S -- Black 29,862 4.24% 33.1 31.2 Asian 52,501 7.46% 32.5 35.3 NSA: Central -:-c;~i~T~ White 180,083 27.02% -- 68.0 Minority 486,302 72.98% 60.S -- Hispanic 297,625 44.66% 6S.0 -- Black 48,957 7.35% 57.9 54.4 Asian 117,617 17.65% 63.0 43.0 NSA: East Los Angeles ~~~~~: White 47,S94 11.96% -- 52.6 Minority 352,701 88.04% 46.8 -- Hispanic 284,080 70.91% 52.6 -- Black 6,476 1.62% 35.2 49.2 Asian 54,091 13.50% 30.S 39.5

Community Profile 3-13 Analysis of Impediments to Fair Housing Choice

Table 3 3- Index of Dissimilarit ~:~:~NSA: South Los Angeles White 19,532 2.9% -- 54.5 Minority 665,473 97.1% 51.3 -- Hispanic 387,843 56.6% 54.5 -- Black 251,262 36.7% 57.8 37.7 Asian 15,042 2.2% 35.3 60.9 -:;;:r~~ White 241,240 61.1% -- 50.6 Minority 153,684 38.9% 41.5 -- Hispanic 66,070 16.7% 50.6 -- Black 20,357 5.2% 57.1 38.9 Asian 50,475 12.8% 39.0 35.9 ~:O:~I~:.t~NSA: Harbor White 48,782 25.3% -- 55.1 Minority 144,270 74.7% 50.8 -- Hispanic 108,910 56.4% 55.1 -- Black 15,031 7.8% 51.0 38.2 Asian 14,877 7.7% 48.5 46.0 Note: 1. Minority includes all non-White population.

Source: 2000 Census; Cotton/Bridges/Associates.

3.2 Household Profile

Household composition is important when analyzing housing needs. Households with different characteristics have unique housing needs and may face different impediments in the housing market. For instance, communities with a large proportion of families with children tend to have a large average household size. Such communities have a greater need for larger units with adequate open space and recreational opportunities for children. Many families with children may face housing discrimination by landlords who fear that children would cause property damage or excessive noise, or other safety and liability issues. Discrimination can manifest itself in the form of higher security depostts or outright retusat to rent to families with children. Special needs households'" and their specific fair housing concerns are discussed below.

19 Both the Federal Consolidated Plan regulation and California Housing Element law define "special needs households" to include: large households (five or more members); elderly households; female-headed households, particularly those with Children; and households with persons with disabilities.

3-14 Community Profile City of Los Angeles

Large 24% 12% 6% 12% 25% 27% 20% 17% Households Elderly 17% 17% 19% 16% 17% 18% 17% 17% Households Female-Headed 13% 11% 8% 12% 17% 26% 16% 14% Households Female-Headed Households with 7% 6% 4% 7% 10% 16% 10% 8% Children Notes: 1. Large household is one with five or more members. 2. Elderly household is one headed by an elderly person age 65 or over Source: Census 2000 3.2.1 large Households

Many ethnic minority groups have a younger age profile and tend to have larger families than the White population. Having more children translates into a higher cost of living and the need for larger homes,

Large households, defined as those with five or more persons, have special housing needs due to their income and the lack of adequately sized; affordable housing, To save for necessities such as food; clothing; and medical care, low and moderate income large households may reside in smaller units, resulting in overcrowding that tends to accelerate deterioration of the structure,

The 2000 Census reported 213,997 large households in the City; representing 17 percent of all households (Table 3-4). The North Valley, East Los Angeles and South Los Angeles had the highest proportions of large households, with approximately a quarter of all households in those NSAs having five or more persons. This special needs group experienced a higher level of housing problems than other households did. Low and moderate income large households (those earning up to 80 percent of the County Median Income or MFI) made up over half of all large households. Low and moderate income households experienced a much higher rate (85 percent) of housing problems, which include overcrowding, cost burden, or substandard housing conditions, than the general population (Table 3-5).

Large households often face discrimination in the housing market, particularly in the rental housing market. Some landlords and managers may be concerned with the potential increase in wear and tear and liability issues related to large households, especially those with children.

Community Profile 3-15 Analysis of Impediments to Fair Housing Choice

Table 3-5: Large Households:Low/Moderate Income and Housin Problems

Large Households All Households Notes: 1. Low/Moderate Income households with incomes not exceeding 80 percent of the County Median Income 2. "Housing Problems" include housing cost burden (paying more than 30 percent of household income on housing), overcrowding (more than one person per room, not counting bathroom, kitchen, or hallway), and inadequate housing (lacking complete kitchen or bathroom)

Sources: 1. 2000 Census 2. HUD CHAS,2003

3.2.2 Seniors

One of the fastest growing segments of the population in the next 20 to 30 years is expected to be those aged 65 years and older. The aging of the "baby boomer" generation (currently in their middle ages) will increase the demand for a wider range of housing types. Senior households (householder 65 years or older) are also vulnerable to housing problem and discrimination. Due to limited income, prevalence of physical or mental disabilities (e.g. dementia), limited mobiltty, and high health care costs, seniors are considered a special needs group.

In a tight houslnq market, seniors, particularly those with disabilities, often face increased difficulty in finding housing accommodations or face targeted evictions. Many seniors have only limited incomes and cannot afford the risinq market rents. Some landlords may also be concerned with the potential liability of frail elderly persons sustaining injuries on the apartment premise. A senior on a fixed income faces great difficulty finding safe and affordable housing or relocating after an eviction. Subsidized housing and federal housing assistance programs (such as Section 8) are increasingly challenging to secure and often involve a long waiting list.

According to the 2000 Census, the City had 357,100 persons over the age of 65, representing about 10 percent of all residents citywide. Also, approximately 17 percent of all households were headed by seniors. Table 3-4 shows that the proportion of elderly households in each NSA, with West Los Angeles having the highest proportion (19 percent). A disproportionate percentage (53 percent) of seniors had low and moderate incomes compared to all resldents (46 percent). Approximately 43 percent of elderly residents experienced housing problems such as cost burden or substandard housing.

Community Profile City of Los Angeles

Table 3-6: Elderly Households: low/Moderate Income and Housin Problems

Elderly All residents Notes: 1. Low/Moderate Income households with incomes not exceeding 80 percent of the County Median Income 2. "Housing Problems" include housing cost burden (paying more than 30 percent of household income on housing), overcrowding (more than one person per room, not counting bathroom, kitchen, or hallway), and inadequate housing (lacking complete kitchen or bathroom)

Sources: 1. 2000 Census 2. HUD CHAS,2003

In addition to affordable housing located near transportation, the housing needs of the elderly also include supportive housing, such as intermediate care facilities, group homes, and other housing that includes a planned service component. Approximately 600 state-licensed residential facilities for seniors and 57 adult day care facilities serve the elderly population throughout the City. The elderly residential facilities have a combined capacity of 13,053 beds. Figure 3-4 shows the distribution of licensed care facilities in the City. Additional facllltles are available throughout the County.

The Housing Authority of the City of Los Angeles (HACLA) offers the Hope for Elderly Independence Program that provides tenant-based rental assistance with supportive services to elderly people. HACLAworks with the City of Los Angeles Department of Aging in determining who meets the program's special requirements.

Community Profile 3-17 VENTURA COUNTY

licensed Community Care facilites o Residential care - elderly • Adoption agency • Adult day care o Adult day support center G Community treatment facility • Fosteriamilyagency .. Foster family agency suboHice e Group home (jI Residential facility chronically ill II) Small family home • Social rehabilitation facility • Transitiona! housing placement

lfGfNO

_ LowlModerate Income Areas (census block group wilh 51 % or more low/moderate income population) oNeighborhood Service Areas o City of los Angeles Cities/U nincorporated Areas - • - County Boundary -- Freeways - - - - - Major Roads

.0- I I ,;IMiles - Somoo: Census l1gm Oala 1000:C.~lo"'i" Dept of m Social Svc, 2002; aly of Los A"IIole, GIS:HUO fiGURE 3·4 CITY of LOS ANGHfS Licensed Care facilities Analysis of Impediments to fair Housing Choice City of Los Angeles

3.2.3 Single-Parent Householdswith Children

Single-parent households are likely to have special needs for housing near day care and recreation facilities and to have accessto public transportation. Households headed by females are especially likely to need assistance because women continue to earn less on average than men do in comparable jobs. Low and moderate income female-headed households with children experience additional burdens when combined with limited transportation resources. Women in general are disproportionately responsible for household-supporting actlvitles, such as trips to the grocery store or accompany young children to and from schools. Women using public transit are often forced to look for employment near home that will allow them time to complete these household- sustaining trips.2o Therefore, housing choices for female-headed households are comparatively more limited than for two-parent families.

In 2000, households headed by women comprised According to statistics provided approximately 14 percent of all households in Los by the fair housing service Angeles and 8 percent of all households with providers serving the City of Los children under 18 years were headed by females. Angeles, 20 percent of housing The area with the highest proportion of residents discrimination complaints were under the age of 18 and of single-mother based on familial status (of households is South Los Angeles (Table 3-7), which 22 percent were from Some landlords and managers are reluctant to rent female-headed households). to single mothers, due to concerns about their ability to pay and to manage the children.

Table 3-7: Household Characteristics I North I South I West Central South Valley Valley LA I LA I East LA I LA I Harbor I Total Presence of Children <18 years 29% 24% 16% 21% 30% 34% 30% 26% Household Type Total 190,536 268,062 178,164 262,704 119,453 196,406 62,371 1,277,696 Married Couple wi 33% 23% 15% 18% 28% 26% 28% 24% Children Father wi 3% 2% 1% 2% 4% 4% 4% 3% Children Mother wi 7% 6% 4% 2% 10% 16% 10% 8% Children Source: Census 2000

3.2.4 Householdswith Personswith Disabilities

Both federal and California laws prohibit housing discrimination against persons with disabllities, including persons with HIV/AIDS. Under the federal Fair Housing Act, a disability, with respect to a person, is defined as: • a physical or mental impairment which substantially limits one or more of such person's major life actlvltles: • a record of having such an impairment; or

20 Blumenberg, Evelyn, "Reverse Commute Transit Programs and Single Mothers on Welfare: A Policy Mismatch?" Institute of Transportation Studies, Volume 1, Number 2: December 2002

Community Profile 3-19 Analysis of Impediments to Fair Housing Choice

• being regarded as having such an impairment, but such term does not include current, illegal use of or addiction to a controlled substance.:

The California Fair Employment and Housing Act provides protections independent from those in the federal law, Although the federal law provides a floor of protection; California law affords additional protections and contains broad definitions of physical disability, mental disability, and medical condition, In addition, the definitions of "physical disability" and "mental disability" under the California require a "limitation" upon a major life activity, but do not require a "substantial limitation" as under the federal law. This distinction is intended to result in broader coverage under the California law than under that federal law. Both federal and California laws offer protection for persons in recovery from substance abuse.

Fair housing choice for persons with disabilities can be compromised based on the nature of their disability. Persons with physical disabilities may face discrimination in the housing market because of the use of wheelchairs, need for home modifications to improve accessibility, or other forms of assistance, Landlords/owners sometimes fear that a unit may sustain wheelchair damage or may refuse to exempt disabled tenants with service/guide animals from a no-pet policy. Refusal to make such reasonable accommodations for persons with disabilities is a direct violation of fair housing laws.

A major barrier to housing for people with mental disabilities is opposition based on the stigma of mental disability. Landlords often refuse to rent to tenants with a history of mental illness. Neighbors object when a house becomes a group home for persons with mental disabilities. Often jurisdictions use special-permit requirements and other zoning restrictions to deny housing to people with (or perceived as having) a mental disability.

According to the 2000 Census, almost 734,000 City residents over the age of five had sensory, physical, mental, work, mobility, and/or self-care limitations, representing approximately 22 percent of the City's populattcn." Residents between the age of 16 and 64 years reported the majority of disabilities tallied (72 percent). Within this group, employment disabilities accounted for 28 percent and mobility disabilities accounted for 21 percent of all disabilities tallied.

Mental disabilities comprised 12 percent of all disabilities tallied. Mentally disabled persons are those with psychiatric disabilities that impair their ability to function in varying degrees. Physical disabilities comprised 18 percent of all disabilities tallied. Personswith physical disabilities include those individuals with any physical impairment. Others include persons with very disabling chronic diseases.

Persons with disabilities are overrepresented in the homeless population. The Los Angeles Homeless Services Authority (LAHSA) conducted a homeless count in Greater Los Angeles (excluding Glendale, Long Beach, and Pasadena) in 2005. At a given point in time the homeless population in the County is estimated at 82,291 people. Approxlmatelv 72,413 (88 percent) were unsheltered, and 9,878 people (12 percent) were living in either emergency shelters or transitional housing programs at the time of the census. More than half of the homeless people (48,103) were in the City of Los Angeles. The homeless count also documented that approximately 46 percent of homeless persons self-reported having a disability.

21 The 2000 Census used a broader set of criteria to define disability (e.g. age range, types of disabilities recorded) than in the 1990 Census, Therefore, the disabled population includes a larger pool of individuals in 2000 than in 1990.

3-20 community Profile City of Los Angeles

Given the prevalence of disabilities among the homeless people, the need for emergency shelters and transitional or supportive housing is evident. A continuum of housing options for this special group is needed, ranging from short-term emergency shelters, transitional housing, supportive housing, to permanent housing. Specifically, housing that connects to substance abuse treatment programs and other supportive services is much needed.

The LAHSA homeless count indicated that 28 percent of the homeless people sought shelter within the 30 days prior to the count but were turned away, primarily due to a lack of available beds. These homeless people also had problem re-securing permanent housing, pointing to the absence of financial resources as the biggest obstacle.

While fair housing practices apply also to most shelters and transitional housing facilities, anecdotal evidence indicates that fair housing laws are not well understood by some shelter providers, and that homeless individuals with disabilities face discrimination accessing this type of housing.22

Persons with physical, mental, and developmental disabilities often require special housing to accommodate their special conditions. For many who are physically dlsabled, features such as handrails, ramps, wider doorways, specially designed cabinetry and electrical outlets, special door and faucet handles, and non-skid flooring are necessary.

The Fair Housing Amendment Act of 1988 requires that new multi-family housing with four or more units be designed and built to allow access for persons with disabilities. However, over 90 percent of the City's rental housing stock was built prior to 1990 and therefore may not be accessible to persons with disabilities.

Furthermore, pursuant to Section 504 of the Rehabilitation Act of 1973, each area housing authority is required to assess its public housing stock for handicap accessibility. Section 504 requires five percent of the units in a public housing project be accessible to the mobility impaired and two percent of the units be accessible to the visually/hearing impaired. On an ongoing basis, the area housing authorities utilize funding from the HUD Comprehensive Grant Program to complete the required modifications in compliance with ADA.

A number of City agenCies/programs assist persons with disabilities. Specifically, the Department on Disability (DOD) for the City of Los Angeles is responsible for:

• Proposing, developing and implementing pol iciest programs, services, and activities that will improve the quality of life for persons with dlsablllttes:

• Developing and implementing of the City's federally mandated ADA Transition Plant which is designed to guide the City into full ADA Compliance; and

• Providing ADA Compliance training for City departments and private entities,

.2 Shelter Partnership, comment letter on the Draft Analysis of Impediments to Fair Housing Choice, dated February 13, 2006.

Community Profile 3-21 Analysis of Impediments to Fair Housing Choice

HACLA'sSection 8 Medicaid Waiver Program is designed to help eligible persons with disabilities and their families afford decent and safe housing. The waiver allows Medicaid-eligible individuals at risk of being placed in hospitals, nursing facilities, or intermediate care facilities the alternative of being cared for in their own homes and Section 8 rental assistance helps the families pay for the housing costs.

HACLA's Aftercare Program is designed to provide affordable housing to persons with disabilities who are participating in on-going programs of rehabilitation, education, or receiving supportive services related to their disability.

3.2.5 Persons living with HIV I AIDS

Personswith HIV/AIDS face an array of barriers to obtaining and maintaining affordable, stable housing. For persons living with HIV/AIDS , access to safe, affordable housing is as important to their general health and well-being as accessto quality health care. For many, the persistent shortage of stable housing is the primary barrier to consistent medical care and treatment. Despite federal and state anti-discrimination laws, many people face illegal eviction from their homes when their illness is exposed.

In 2003, Los Angles had the second highest number of cumulative AIDS cases, after New York City. As of December 2003, 10,480 persons with AIDS were living in the City of Los Angeles. Of those cases, 1,670 cases were reported in 2001 and 2002.23 The majority of persons living with AIDS are male (90 percent) and between the ages of 30 and 49. Among ethnic and racial groups, Blacks were overrepresented in the number of AIDS cases. While constituting 11 percent of the City population, Blacks constituted 23 percent of all AIDS cases. Hispanics make up 39 percent and Whites 35 percent of the people living with AIDS in Los Angeles. In 2002, the rate of persons diagnosed with AIDS was 22 cases/l00,OOO people. This figure was significantly higher for Blacks (46/100,000) and for men (39/100,000),24

Housing resources for persons living with HIV/ AIDS is an important component of consistent medical care and treatment. In 1999, the City commissioned Shelter Partnership, Inc. to conduct a study and prepare a report on the housing and social service needs of persons living with HIVjAIDS throughout the County of Los Angeles. According to the study, 65 percent of the people with AIDS surveyed had been homeless at some point in their lives and had experienced homelessness an average of 2.3 times in the past three years. Also, 50 percent of the people with AIDS who were not homeless at the time believed that they were at risk of becoming homeless. The two most significant factors that prevented people with AIDS from getting housing were not having enough money to pay for housing and not knowing what was available or how to access available housing.

The Housing Opportunities for Personswith AIDS (HOPWA)program provides support for housing assistance and services to low income persons with HIV/AIDS and their families. In Los Angeles, the Los Angeles Housing Department is the coordinating agency administering HOPWAfunds for the entire County. The HACLASection 8 HOPWAFast Track Program also provides housing assistance to persons with HIVjAIDS.

23 Los Angeles County HIV Epidemiology Program, 2004 24 Ibid.

3-22 Community Profile City of Los Angeles

3.3 Housing Characteristics

Household characteristics (seniors, large households, families with children) described in previous sections strongly influence housing preferences and needs, For instance, single-person households often occupy smaller apartments or condominiums, such as one-bedroom units. Married couples often prefer larger single-family homes, particularly if they have children. These patterns underscore the need to provide a diversity of housing types that allow different households the opportunity to live in the City. Table 3-8 describes characteristics of the housing stock in Los Angeles.

Housing Units1 1990 187,457 269,128 182,142 263,897 123,688 210,547 63,165 1,300,024 2002 196,754 278,550 186,614 275,371 127,560 213,978 65,473 1,344,300 % change 5% 4% 2% 4% 3% 2% 4% 3% Housing Type (2002}1 Single-Family 61% 44% 36% 15% 46% 42% 42% 39% Multiple Family 37% 55% 64% 85% 53% 58% 56% 60% Other 3% 0.4% 0.3% 0.1% 0.3% 0.3% 2% 1% Tenure2 Owner 39% Renter 61°/Q Sources: 1. City of Los Angeles Planning Department 2. Census 2000

Housing Growth

Comparing Table 3-8 (Housing Characteristics) and Table 3-1 (Population Growth by Area) shows that housing production between 1990 and 2002 lagged behind population growth. At the City level, the population grew nine percent between 1990 and 2002 while housing units increased only by three percent. The North and South Valleys increased in population by 16 and 14 percent, respectively, but only five- and four- percent growth in the number of housing units.

In a tight housing market, where demand far exceeds supply, housing costs increase as potential homebuyers and renters compete with each other for the limited housing. As a result, sellers, realtors, lenders, landlords, and managers can afford to choose the preferred buyers or renters, potentially giving room to engage in discriminatory practices.

Tenure (Owner versus Renter)

Tenure is primarily related to household income and composition, and age of the householder. Table 3-8 shows that, except for the North Valley area, most households in the City are renters. Citywide, 61 percent of households rent. In the Central area, due to the high proportion of rental housing in and around downtown, that figure jumps to 84 percent.

Com m u n it Y P ro f iI e 3-23 Analysis of Impediments to Fair Housing Choice

Tenure in Los Angeles is closely related to the cost of land and corresponding lack of available Single-family housing and slow housing production. Only 39 percent of the City's housing stock is single-family; the majority is multi-family housing. With the current climate of low mortgage interest rates, the competition for the scarce supply of available single-family homes cause home prices to skyrocket and put homeownership even further away from many low and moderate-income families.

Ethnic minorities in Los Angeles have not achieved homeownership as readily as the White population. Census figures compiled by the Southern California Association of Non-Profit Housing (SCANPH) indicate that homeownership rates for Blacks (31 percent), Hispanics (27 percent) and Asians (36 percent) were much lower than for Whites (46 percent). Minority households are more reliant on the rental housing market for accommodation and may be disproportionately impacted by fair housing issues in the rental market.

During FY 2002/031 fair housing service providers serving the City of Los Angeles received a total of 11043 inquiries from City residents regarding fair housing and 86 percent of these calls came from in-place tenants (renters).

Housing Costs and Affordability

The costs and affordability of housing are not fair housing issues per se. A seller or a landlord is not obligated to sell or rent a unit if the prospective buyer or renter lacks the financial means to afford the unit. However, when housing costs and affordability issues disproportionately impact households or individuals that are protected by fair housing laws, fair housing concerns may arise.

Housing Costs

Limited growth in housing compared to population increase has meant that housing prices in the City increased significantly in recent years. The City's median home price as of March 2004 was $340,000, experiencing a 32-percent increase from just one year before. Home prices in the City place homeownership out of reach for most low and moderate income households. Table 3-9 shows the change in housing prices in specific areas of the City. As of March 2004, South Los Angeles had the lowest median home prices but experienced a 28-percent increase since last year. The increase in home prices is similar throughout the City and is consistent with State and County trends.

Table 3~9: Median Home Prices for Selected Areas 0/0 Area I March 2003 I March 2004 I change West Los Angeles $459,000 $572,000 25% Downtown/Central Los Angeles $420,000 $540,000 29% South Los Angeles $170,000 $217,000 28% Northeast Los Angeles $218,000 $290,000 33% South Bay $395,000 $510,000 29% San Fernando Valley $302,000 $395,000 31% West San Fernando Valley $323,000 $425,000 32% Northeast San Fernando Valley $268,000 $350,000 31% Southeast San Fernando Valley $321,000 $415,000 29% Source: 2004 California Association of Realtors, Market Trend Data

3-24 Community Profile City of Los Angeles

Given the high costs of homeownership in the City, low and moderate income households are usually confined to the rental housing market. Yet the problem of affordability also persists in the rental market. The median gross rent in the 2000 Census was $679 with 45 percent of renters paying over $700. The 2002 American Community Survey conducted by the Census Bureau indicated that median monthly housing cost for renters in Los Angeles was $739, representing a nine-percent increase in two years. Livable Places, a nonprofit development and public policy organization, estimates that in Los Angeles a decent one-bedroom apartment rented for about $1,200 per month as of February 2004. This rent, according to Livable Places, is affordable to someone earning $23 per hour (or $48,000 annually). A $1,400-per-month apartment is affordable to someone earning at least $27 per hour ($56,000 annually). As the following section will indicate, these rental prices are at odds with a population where 48 percent of households earn under $35,000 per year.

Housing Affordability

Housing affordabilltv can be estimated by comparing the cost of renting or owning a home with the maximum affordable housing costs to households at different income levels.

HUD conducts annual household income surveys nationwide to determine the maximum affordable housing payments of different households and their eligibility for federal housing assistance. Table 3-10 shows the annual income for low and moderate income households by size and the maximum affordable housing payment based on the federal standard of 30 percent of household income. General cost assumptions for utilities, taxes, and property insurance are also shown. These figures are meant as general estimates onlv: individual households may have different circumstances that impact their ability to afford decent housing. Comparing the housing costs presented earlier and the affordability matrix in Table 3-10 indicates that housing affordable to low and moderate income housing is limited in Los Angeles. Certain groups are specifically impacted by the lack of affordable housing, as discussed below.

Community Profile 3-25 Analysis of Impediments to Fair Housing Choice

T bl 3 10 H • Aff d bTt M t . L A • c t

Income Group ~~ Extremelylow (30% MFI) One Person $12,500 $313 $50 $200 $11,583 $263 Small Famify $16,050 $401 $100 $200 $18,764 $301 Large Family $19,300 $483 $150 $350 $15,289 $333 low (50% MFI) One Person $20,850 $521 $50 $200 $50,269 $471 Small Family $26,800 $670 $100 $250 $59,304 $570 Large Family $32,150 $804 $150 $300 $65,558 $654 Moderate(80% MFI) One Person $33,300 $833 $50 $200 $107,951 $783 Small Family $42,850 $1,071 $100 $250 $133,665 $971 Large Family $51,400 $1,285 $150 $300 $154,746 $1,135 Notes: 1, MFI in Los Angeles County in 2004 = $53,500 2. Small Family = 3 persons: Large Families = 5 or more persons 3. Utility costs for renters assumed at $50/$100/$150 per month 4. Monthly affordable rent based on payments of no more than 30"/" of household income 5. Property taxes and insurance based on averages for the region 6. Calculation of affordable home sales prices based on a down payment of 10%, annual interest rate of 6%, 30-year mortgage, and monthly payment of gross household income 7. Maximum affordable price refers to the maximum amount that could be afforded by households in the upper range of their respective income categories.

Housing Problems

Combined, housing problems (cost burden, overcrowding, and inadequate housing) affect more than 56 percent of the households in Los Angeles (Table 3-11). According to the Comprehensive Housing Affordability Strategy (CHAS) data developed by the Census Bureau for HUD, housing cost burden issues affect minority and renter- households more significantly than White and owner-households. Specifically, large households, which often include large families with children, and Hispanic households are most impacted by housing problems.

Renters 63% 60% 93% 47% 58% 80% 62% Owners 44% 31% 72% 33% 45% 67% 48% Total 56% 43% 85% 40% 54% 77% 57% Source: Comprehensive Housing Affordability Strategy (CHAS) data, HUD, 2004

3-26 Community Profile City of Los Angeles

Housing Cost Burden

According to the Los Angeles Housing Crisis Task Force, the City of Los Angeles is in the grip of a profound crisis of housing affordability, The majority of the City's households are renters paying higher percentages of their incomes for rent than anyone else in California, This issue disproportionately impacts immigrant households, which tend to generate less income compared to their domestic-born counterparts. While housing construction was active in the 1980s, the 1990s saw a drastic reduction in housing construction blamed on everything from over-burdensome housing and construction codes, to lower demand for housing by growing number of immigrant households, which have larger household sizes and greater willingness to tolerate overcrowding than American-born residents." Whatever the causes, the reduction in housing production has resulted in high and rapidly increasing housing prices.

State and federal standards specify that households experience housing cost burden if they pay 30 percent or more of their gross household income on housing. In 2000, 42 percent of all households experienced housing cost burden. By tenure, 45 percent of renters experienced housing cost burden, compared to 37 percent of homeowners. Among the NSAs, South Los Angeles had a significantly higher proportion of households who experienced housing cost burden (Table 3-12).

Renters 44% 44% 41% 45% 44% 52% 44% 45% Owners 37% 37% 32% 37% 35% 45% 33% 37% Total 40% 41% 38% 44% 41% 49% 40% 42% Note: Cost burden is defined as a household spending more than 30 percent of its gross household income on housing costs, including utilities, taxes, and insurance.

Source: Census 2000

Overcrowding

Overcrowding occurs when housing costs are so high relative to income that families have to live in small units or double up to devote income to other basic needs. In general, an overcrowded household is defined as one with more than one person per habitable room (defined as a room or enclosed floor space used or intended to be used for livinq, sleeping, or eating purposes. Bathrooms, hallways, closets and similar areas are not considered habitable space). Overall, 26 percent of households in the City were overcrowded, with renters experiencing more than twice the rate of overcrowding as homeowners (Table 3-13). Among the seven NSAs, areas with high proportions of minority and low/moderate income populations (North Valley, Central, East Los Angeles, South Los Angeles and Harbor) had higher levels of overcrowding.

25 Johnson, p.Hans, et. al. In Short Supply? Cycles and Trends in California Housing. Public PolicyInstitute of California 2004

Community Profile 3-27 Analysis of Impediments to Fair Housing Choice

Renter 40% 27% 13% 35% 43% 41% 37% 33% OWner 17% 7% 3% 10% 23% 28% 14% 14% Total 26% 18% 8% 31% 36% 37% 27% 26% Source: Census 2000

Housing Condition

Age of housing: The age of housing is commonly used by state and federal housing programs as a factor to estimate the condition of housing stock. Typically, most homes begin to require major repairs or rehabilitation at 30 or 40 years of age. Approximately 68 percent of homes in the City were 30 years or older (Table 3-14). This proportion was significantly higher in areas such as East Los Angeles (78 percent) and South Los Angeles (80 percent).

Source: Census 2000

To improve the overall housing conditions in Los Angeles, the City offers assistance for lower-income homeowners, low and moderate-income first-time buyers, and property owners renting to lower-income tenants. Programs include:

• Comprehensive Single Family Rehabilitation Program: Provides 3 percent deferred loans for low-income, owner-occupied, Single-family homeowners to rehabilitate their homes. Grants of up to $10,000 are available for lead paint hazard removal and/or exterior improvements of major-systems (plumbing, heating, etc.)

• Mom & Pop Program: Provides 3 percent deferred loans for low-income, owner-occupied small rental buildings (2-4 units) to correct code citations and make other habitability improvements. Grants of up to $10,000 are available for lead paint hazard removal and/or exterior improvements of major-systems (plumbing, heating, etc.)

• Small Rental Rehabilitation Program: Provides 3 percent fully amortized loans to owner of primarify low-income occupied rental properties up to 28 units to correct code violations and make other habitability improvements. Grants of up to $5,000 per unit are available for lead paint hazard removal and or visible exterior improvements.

• Handyworker and Home Secure Program: Free minor home repairs are available to homeowners who are low income senior citizens (62 years of age or older) or physically disabled through the Housing Department and the Department of Aging, Emergency repairs that directly affect the health and safety of occupants are also provided to other homeowners if their income does not exceed income limits (regardless of age or disability status),

3-28 Community Profile City of Los Angeles

II Low-Income and Moderate Income first-time Purchase Assistance with Rehabilitation Loan Program: Deferred loans of up to $115,000 to low- income buyers and up to $80,000 to moderate income buyers to purchase and rehabilitate a home in the City of Los Angeles

~ EHOP Program: In cooperation with HUD and the Enterprise Foundation, this program helps rehabilitate HUD-foreclosed homes for sale to low-income first- time homebuyers. LAHD offers deferred loans of up to $90,000 purchase these homes.

Lead Based Paint: The age of the housing stock is the key variable for estimating the number of housing units with lead-based paint. Starting in 1978, the use of all lead- based paint on residential property was prohibited. National studies estimated that 75 percent of all residential structures built prior to 1978 contain lead-based paint (LBP) and that older structures have the highest percentage of LBP. In Los Angeles, almost 70 percent of housing was built prior to 1970 and thus, household lead exposure is a major concern for the City.

Lead poisoning is the number one environmental hazard to children in America today. Lead's health effects are devastating and irreversible. Lead potsonlnq causes IQ reductions, reading and learning disabilities, decreased attention span, and hyperactivity and aggressive behavior. The National Institute of Environmental Health Science found that delinquent children - both White and Black - have higher blood lead levels than children from Similar backgrounds without a criminal history.

Several factors contribute to higher incidences of lead poisoning:

B Low income children are at a risk eight times higher than children from wealthy families

B Black children have a risk five times higher than White children

B Hispanic children are twice as likely as White children to have lead poisoning due to the likelihood of living in older neighborhoods with deferred maintenance issues • Children in older housing are at higher risk .. Up to 50 percent of children in some distressed neighborhoods have some level of lead poisoning

Los Angeles County's Childhood Lead Poisoning Prevention Program (CLPPP)provides services and information to City and County residents regarding childhood lead poisoning and prevention. The CLPPPcollects data to monitor and evaluate the extent of the lead poisoning problem in Los Angeles County.

The cases of children with elevated blood lead levels are tracked by zip code. This data assists staff in focusing efforts on areas with the greatest potential for problems. According to CLPPP,children under the age of five, Hispanics and Black, made up a large portion of all lead poisoning cases. Using zip code-based data from the Los Angeles County Department of Health Services, Figure 3-5 demonstrates the strong correlation between minority concentration areas and high-risk zip codes. These zip codes with a high risk of lead exposure are based upon four risk factors for lead poisoning:

Community Profile 3-29 A n.a Iy sis 0 f r m p e dim e n t s to Fa i rHo us In 9 Choi c e

1) Pre-1960 housing; 2) Population below poverty; 3) Children less than five yeas of age; and 4) Uninsured population

The High Risk Areas were defined as areas that ranked in the highest 50 percent in the county-wide distribution of all four risk factors, The Agency for Toxic Substances and Disease Registry indicates that poor children and children from rectal/etnntc minority backgrounds are more likely to have elevated blood lead levels but children from wealthier backgrounds and White children can also be at risk if, for example, they live in homeowner-renovated housing. According to the CLPPP,in addition to lead-based paint, many cases of childhood poisoning come from ingesting lead through lead-based dishes, pots, and ethnic candies.

Comprehensive Housing Affordability Strategy (CHAS) data developed by the Census Bureau for HUD provides the number of housing units constructed before 1970 that might be occupied by low and income households. National studies estimated that 75 percent of all residential structures built prior to 1978 contain lead-based paint (LBP) and that older structures have the highest percentage of LBP. This data can be used to approximate the extent of LBP hazards among low and moderate income renter- households. According to CHASdata, between 63 and 73 percent of low and moderate income households live in rental housing built prior to 1970 (318,746 units). Using this figure, 70 percent of these units (223,122 units) may contain lead based paint.

Cases by Age 0-2 2,220 59% 65 56% 3-5 1,173 31% 30 26% 6-9 247 7% 7 6% 10-12 35 1% 4 3% 13-15 24 1% 2 2% 16-20 70 2% 8 7% Total 3,769 100% 116 100% Cases by Ethnicity Hispanic 3,193 85% 101 87% Non-Hispanic 575 15% 15 13% Unknown 1 0% o 0% Total 3,769 100% 116 100% Cases by Race Asian 33 1% 2 2% Black 474 13% 10 9% Native American 1 0% 0 0% White 3,237 86% 103 89% Other 24 1% 1 1% Total 3,769 100% 116 100% Source: Los Angeles County Dept. of Health Services, Childhood Lead POisoning Prevention Program, 2004.

3-30 Community Profile City of Los Angeles

The Lead Hazard Control (LHC) Program is funded by HUD to remove lead hazards from housing occupied by low-income families with young children. The Los Angeles Housing Department's (LAHD) lead hazard abatement programs focus primarily on three activities: (a) lead hazard control and reduction; (b) outreach to low-income renter- households with young children in areas identified as having a high percentage of older housing, and; (c) lead certification training (to recruit contractors doing abatement work and to teach lead-safe work practices). The program is administered by the Lead Grant Unit in LAHD/sHome Ownership and Preservation Division.

Over the last several years, LAHD has received four grants from HUD to address lead hazards. Two of the grants have already been exhausted, and two are still operating. The Lead Hazard Reduction Demonstration Grant started October 1, 2003, and will operate through March 31, 2007. With this $2.6 million qrant, LAHDprojects that it will complete lead hazard control/reduction work on 180 units, complete additional tests on young Children, and conduct lead certification training. The Lead-Outreach Grant funds a two-year pilot program that started October 2003 and will end September 2005. The program, funded at $514,764, is a partnership between LAHD and the Southern California Healthy Homes Collaborative, which represents community-based organizations committed to the prevention of lead poisoning and other health hazards in homes. The outreach program will be conducted in five City Council Districts (1, 8, 9, 13, and 14) identified as having housing with a high risk of lead-based paint (see Figure 3-5). The program will be administered and coordinated by LAHD, and community based organizations (CBOs) will provide the direct services.

LAHD will be applying for additional federal lead-based paint hazard control and outreach grants in 2005 under HUD's Super Notice of Funding Availability (NOFA). Additionally, in 2003, LAHD was awarded $265,000 from the State of California (Proposition 46 funds) to purchase equipment for two specific purposes:

• Collaboration with the Los Angeles County Childhood Lead Poisoning Prevention Program to enforce compliance with lead-safe work practices

• Technology enhancements for the City's Systematic Housing Code Enforcement Program (SCEP),s responsibilities in emergency response collaboration with Building and Safety, Los Angeles Police Department, Los Angeles Fire Department, Los Angeles County Department of Health Services, and the Red Cross

Community Profile 3-31 V£NTI)RA COUNiV

l[GENU

~ High Risk Areas for Lead Poisoning

.. Minority Population Concentration (Minority population greater Ihcn Citywide overage ~ 70.4%)

oNeighborhood Service Areas D City of Los Angeles I:'" I Cities/Unincorporated Areas - "- County Boundary -- Freeways • - • - - Major Roads ___ (~_:;::~~~:::==_\1_::==::::::::::::=1 Mil,," _ Source: Census 1ilJe, Dow 2000; Cityo! r.n los Mgele, GIS; BUD tos Angeles COIiOty u.:.a De~1.of He.lrh Sel~c,s fiGURE 3-5 CITY of lOS ANGElES Areas of High Risk for Lead Poisoning Analysis of Impediments to fair Housing Choice City of Los Angeles

Homelessness

The limited supply and high costs of housing exacerbate the problem of hornelessness. Formerly homeless persons have a very difficult time finding housing to move from a transitional housing or other assistance program to permanent housing. Housing affordability for those who are or were formerly homeless is challenging from an economics standpoint, but this group may also encounter fair housing issues when landlords maintain a stigma of homeless persons as economically (and sometimes mentally) unstable, These difficulties are more severe for homeless families that need larger affordable units.

The National Coalition for the Homeless found LAHSA is a City-County Joint Powers that poverty and the lack of affordable Authority, an independent unit of housing are the principal causes of local government, formed to address homelessness .among families.26 A 2003 the problems of homelessness on a Economic Roundtable study commissioned by regional basis. As an administrative the Los Angeles Homeless Services Authority entity, LAHSA contracts with (LAHSA) indicated that the City's homeless community-based nonprofit agencies rate is higher than most U.S. cities because of to provide homeless services the pervasive~ess of poverty and the high throughout Los Angeles County. cost of housing. However, due to the transient nature of the homeless, specific homeless counts for the City are not available. For 2003/ the Economic Roundtable study reported a "point in time" estimate of the countywide homeless population at 78/600.

In General, Los Angeles County homeless persons tend to be younger than the general population (62 percent were under the age of 30). Certain groups are overrepresented in the homeless population. These include Blacks (five times their proportion in the general population) and the disabled (twice their proportion in the general population). Also, a significant proportion of the homeless population was comprised of single mothers with children, The Economic Roundtable study also differentiated between persons who were homeless for extended periods, and those who experienced homelessness for a short period. The first group was found to occupy most beds in homeless shelter programs. The second group tended to be low-income families in a precarious housing situation and accounted for the majority of homeless persons presented in annual statistics. This indicated the need for homeless prevention programs for low-income families. Among all homeless persons in the County, only 14 percent were able to gain access to subsidized public housing.

LAHSA provides funding and guidance for a vast network of local, non-profit agencies with missions to help people leave homelessness permanently. LAHSA manages a year- round planning process for the Los Angeles Continuum of Care (CoC). The purpose of the CoC process is to determine needs for housing and services for homeless persons in the City and County of Los Angeles.

26 National Coalition for the Homeless, 2002. http://www.nationalhomeless.org/

Community Profile 3-33 Analysis of Impediments to Fair Housing Choice

3.4 Income and Employment 3.4.1 HouseholdIncome

Household income is the most important factor determining a household's ability to balance housing costs with other basic life necessities. While economic factors that affect a household's housing choice are not a fair housing issue per se, the relationships among household income, household type, race/ethnicttv, and other factors often create misconceptions and biases that raise fair housing concerns. To the extent that affordability issues disproportionately Impact a particular group that is protected by fair housing laws, fair housing concerns may also arise.

The median household income for the City of Los Angeles in 1999 was $36,687,21 Figure 3-6 shows the income distribution for the City, which is skewed toward the low end of the income range. Figure 3-7 overlays the areas with minority population concentrations with areas considered low and moderate income areas according to HUD guidelines. The figure reflects a high correlation between low income and minority concentrations. This correlation is further illustrated in Table 3-16, which shows that households with very young or old householders have a lower median income. Families with children and especially female-headed households with children have lower median incomes than families with no children. Lastly, median household income is lower for Black households ($27,420), Hispanic households ($28,759), and Asian households ($37,123) than it is for White households ($50,802).

Figure 3-6: Income Distribution, 2000

25% .r------

21%

15%

10%

0% ... <$15,000 $15000 - $25,000 - $35,000 - $50,000 - $75,000 - $100,000 - >$150,000 $24,999 $34,999 $49,999 $74,999 $99,999 $150,000

Source: 2000 Census

27 The 1999 median household income information is used as a threshold because the 2000 Census measures household income earned in 1999.

3-34 Community Profile City of Los Angeles

Table 3-16: Median Household Income

All Households $36,687 Median Household Income by Age of Householder Householder under 25 years $20,802 Householder 25 to 34 years $34,485 Householder 35 to 44 years $40,503 Householder 45 to 54 years $47,025 Householder 55 to 64 years $45,540 Householder 65 to 74 years $31,985 Householder 75 years and over $23,841 Median Household Income by Family Status Families with children under 18 years $33,050 Families without children under 18 years $49,177 Female-headed households with children $17;263 Median Household Income by Race White Households $50,802 Hispanic Households $28,759 Black Households $27,420 Asian Households $37,123 Source: Census 2000

For planning purposes, special income data based on 2000 Census in the Comprehensive Housing Affordability Strategy (CHAS) are used (see Table 3-17).28 According to CHAS, 16 percent of the City's total households in 2000 were Extremely Low Income (0-30 percent of the County Median Family Income or MFI), 13 percent Low Income (31-50 percent MFI), and 16 percent were Moderate Income (51-80 percent MFI). Approximately 54 percent of households had incomes above 80 percent of the median in 2000. Overall, low and moderate income households comprised 46 percent of all households in 2000. Consistent with the median household income presented in Table 3-16 above, certain groups had higher proportions of low and moderate income households. Specifically, 63 percent of the Hispanic households and 55 percent of the Black households were low and moderate income (Table 3-17). Proportionally fewer White households (29 percent) fell in the low and moderate income category compared to the City average. Similarly, special needs groups such as elderly, large renter- households had higher proportions of low and moderate income households.

Livable Places29 profiles the low and moderate income households in the City (Table 3- 18) to disband the perception of such households as essentially welfare recipients. In Los Anqeles, a two-income household can still be a low income household if they are making only minimum wages.

28 For planning purposes, HUD uses the Census data to develop special tabulations by HUD income group and special needs category. This dataset is collectively known as the Comprehensive Housing Affordability Strategy (CHAS). 29 Livable Places is a nonprofit development and public policy organization working to make the Los Angeles region more livable and environmentally sustainable. They are concerned that sprawl, the housing crisis and the lack of investment in older urban areas has adversely affected the quality of life in the Los Angeles region.

Community Profile 3-35 VENTURA COUNTY

~(\-,\, :,.:"::\-.-). - .. -<": i~:~;.r··J·~d':~~~~..~..-..~..

lEGEND l1li Minority Population Concentration {Minorily Populolion greo!er then Cilywide overage - 70.4%j W Low!Moderate Income Areas {census block group wilh 51% or more low/moderate income populationj oNeighborhood Service Areas CJ City of Los Angeles 1<.,) Clties/Unincorporated Areas - • - County Boundary -- Freeways - - - - - Major Roads .0-I I - Sc",e.: Ceo,".' Tig~.IOal' 2000: m Cityof los Angele, GIS:HUD fiGURE 3-7

CITY of lOSANGHES Areas of Minority Concentration Analysis 01 Impediments to Fair Housing Choice City of Los Angeles

Table 3-17: Household Income Characteristics

Household ~ Race/Ethnicity White 29% 9% 8% 11% Hispanic 63% 20% 19% 23% Asian 44% 19% 11% 14% Black 55% 26% 13% 16% All Households 46% 16% 13% 16% Household Type Elderly 53% 22% 16% 15% Small Families 41% 14% 12% 16% Large Families 55% 16% 17% 22% All Others 42% 18% 10% 14% Renters 59% 23% 17% 19% Owners 24% 6% 7% 12% .. Source: Comprehensive Housing Affordablhty Strategy (CHAS), 2004 Note: The CHAS data was provided by HUD in 2004 using 2000 Census data. The income limits based on the 1999 Median Family Income (MFI) was used to develop CHAS data because the 2000 Census asked respondents to report on their incomes earned in 1999.

Table 3-18: "livable Places" Income Profile Who lives on 500/0 of the median income? • A single person working full-tlrne earning a wage of $10/hour • A single parent with a child earning $1,840/month • A couple with one child earning $24,800fyear • Two minimum wage workers with two children earning $28,OOOfyear

Who lives on 80% of the median income? • A Single person working full time at about $16/hour • A single parent with one child earning $3,200/month • A couple with one child earning about $42,OOOfyear

Who lives on 100% of the median income? • A single person earning $18.50/hour • A couple with no children earning $3,67S/month • A single parent with two children earning $49,600fyear • A couple with two children earning $5S,1001Year

Who lives on 120% of the median income? • A Single person earning working full time earning about $22/hour • A single parent with one child earning $4,400/month • A couple with one child earning $S9,500/year • A couple with two children earnlno $66 OOO/year Source: Livable Places 2004

Community Profile 3-37 Analysis of Impediments to Fair Housing Choice

3.4.2 Employment

A major factor in income levels is the type of occupation that residents are employed in. Los Angeles is a major trade, manufacturing, and distribution center for the U.S., the Pacific Rim, and the world. Its leading economic sectors include shipping, manufacturing, communications, finance, and fashion. The Port of Los Angeles is among the busiest in the country. Los Angeles is a center for advanced industries, notably high technology and information-related industries. It is also the world capital of the motion picture, television, radio, and recording industries. However, Downtown Los Angeles, which still has a concentration of jobs, Is being superseded by areas such as the San Fernando Valley, the Westside along Wilshire Boulevard, the South Bay (EI Segundo, Torrance and Long Beach), and the northern San Gabriel Valley, particularly Pasadena.

The Los Angeles Unified School District, with approximately 800,000 students, is one of the largest employers in the City. Major employers in the City also include the two largest universities in the City that employ close to 50,000 persons and hospitals that have more than 22,600 employees in thirteen locations (Table 3-19).

Combined, sales and office occupations comprised about one-third of all employees in the Los Angeles area. The lowest paid occupations (service, sales/office, farming, and production/transportation) accounted for over half of all employment in the City according to the 2000 Census (Table 3-20).

Figure 3-8 shows the distribution of major employers (over 500 employees) in the City in relation to low and moderate-income population and transit lines. A concentration of employers can be found in Downtown Los Angeles. Major employers can also be found in the San Fernando Valley, the Westside along Wilshire Boulevard, and the area near LAX. South and East Los Angeles, as well as the eastern portions of San Fernando Valley have concentrations of low and moderate income residents and a lack of employers that offer large number of job opportunities. In other parts of the County, the South Bay (EI Segundo, Torrance and Long Beach), Burbank, Glendale and the northern San Gabriel Valley, particularly Pasadena, are developing into important employment centers, offering residents additional job opportunities but a farther commute.

3-38 Community Profile City of Los Angeles

Ta ble 3- 19 : Ma or Em 0 ers In los A n e es • .. . • • • • .. • • • Northrop Grumman Corp Los Angeles 122,600 Search Detection/Navigation Systems LAUSD Los Angeles 70,0001 K-12 Schools UCLA Los Angeles 35,571 Higher Education and Medical Center Universal Studios Universal City 16,000 Entertainment AECOMTechnology Corp Los Angeles 16,000 Engineers-Consulting Platinum Equity Holdings Los Angeles 15,000 Holding Companies (Non-Bank) University of Southern Cal. Los Angeles 13,400 Higher Education and Medical Center Robinsons-May N. Hollywood 13,000 Department Stores UNIHEALTH Foundation Woodland Hills 11,367 Home Health Service Harman International Northridge 10,776 Stereophonic/HiFi Equipment Cbre Holding Inc Los Angeles 9,500 Real Estate Health Net Inc Woodland Hills 8,629 Health Maintenance Organizations Worldwide Restaurant Concepts Sherman Oaks 8,450 Restaurants California Pizza Kitchen Inc Los Angeles 8,400 Restaurants Farmers Group Inc Los Angeles 8,379 Insurance-Property & Casualty Technicolor Inc Studio City 8,000 Motion Picture Producers & Studios 99 Cents Only Stores Los Angeles 7,620 Variety Stores Occidental Petroleum Corp Los Angeles 7,133 Oil & Gas Exploration & Development Superior Industries Inti Inc Van Nuys 7,000 Automobile Parts & Supplies Tarrant Apparel Group Los Angeles 6,990 Apparel Design & Manufacturing Southern California Gas Co Los Angeles 6,400 Gas Companies Los Angeles Times Los Angeles 5,800 Newspapers (Publishers) Teledyne Technologies Inc Los Angeles 5,300 Aircraft Engines & Engine Parts Reliance Steel & Aluminum Los Angeles 5,200 Meta1-Distri butors ROLL International Corp Los Angeles 5,100 Holding Companies (Non-Bank) Kaiser Permanente Los Angeles 5,000 Physicians & Surgeons Note: 1. Number of employees shown for LAUSDincludes teachers, certified support personnel, certified administrative personnel, and classified personnel. October 25, 2005, LAUSD.

Source: InfoUSA 2004

Community Profile 3-39 Analysis of Impediments to Fair Housing Choice

T bl 3 20 E • t dW • l A • R •

Census2000 c of All Mean Annual I Employment I Employees I Wage Occupation Estimates1 (2000) (2003)2 Management, business, and financial operations 193,353 12.6% na • Management 125,650 8.2% $98,994 • Business and financial operations 67,297 4.4% $61,411 Professional and related 331,087 21.6% na • Computer and Mathematical 30,041 2.0% $65,134 • Architecture and Engineering 21,565 1.4% $66,499 • Life, Physical, and Social Science 13,470 0,9% $54,286 Service 245,498 16.0% na • Healthcare support 25,380 1,7% $25,200 • Protective service 23,398 1.5% $34,409 • Food preparation and serving 72,940 4,8% $18,605 • Personal care and service 49,461 3.2% $25,024 Sales and office 409,696 26.7% na • Sales and related 175,152 11.4% $34,958 • Office and administrative support 234,544 15.3% $30,955 Farming, fishing, and forestry 2,511 0.2% $21,904 Construction, extraction, and maintenance 117,561 7.7% $38,237 Production, transportation, and material moving 232,368 15.2% na • Production 150,806 9.8% $25,365 • Transportation and material moving 81,562 5.3% $27,472 Total employees across all occupations 1,532,074 100.0% $39,756 Sources; 1. 2000 Census 2. CA EDD, Occupational Employment (2002) & Wage Data (2003) Los Angeles-Long Beach MSA (Los Angeles County)

Employment Access

Transit Dependency

Minority and low and moderate income persons tend to be transtt-dependent, According to the Census, ten percent of the City residents depend on public transportation to go to work. The number of private vehicles available to households varies by race/ethntcttv. Only nine percent of the White households in the City do not own a car, compared to 25 percent of the Black households, 23 percent of the Hispanic households, and 15 percent of the Asian households. When job centers and housing are inadequately served by public transportation, minority households, many of whom are low and moderate income, are impacted disproportionately.

Public Transportation System

Low income workers, especially female heads of household with children; have unique travel patterns that may prevent them from obtaining work far from home. As discussed earlier in this chapter, women in general are disproportionately responsible for household-supporting activities. Women dependent on public transit often need to look

3-40 Community Profile City of Los Angeles for employment near horne;" For other low income workers, long and unreliable commutes on public transit may limit their ability to travel to and from work."

As shown in Figure 3-8, most major employers are located on or near a public transit line! with many employers in low- and moderate-income areas. Furthermore, most low- and moderate-income areas are served by MTAtransit lines and/or Metro Links. The Los Angeles County Metropolitan Transportation Authority (MTA) serves as transportation planner, coordinator, designer, builder, and operator for Los Angeles County, Besides the Metro Bus fleet, the MTA also designed, built, and now operates Metro Rail service. In addition to operating its own services, the MTA funds 16 municipal bus operators many of which offer connections in to employment centers within the City such as Downtown and the Wilshire Corridor.

In addition to the MTA,the City of Los Angeles and the Southern California Regional Rail Authority (SCRRA) offer transit options for City residents: the City of Los Angeles Department of Transportation (LADOT) operates the Commuter Express lines which are express services geared to shuttling residents from suburban communities into Los Angeles business centers and the SCRRAoperates the Metrolink rail system that runs commuter trains in the six southern California counties of San Bernardino, Riverside, Ventura; Orange, Los Angeles and North San Diego. The Metrolink trains travel from communities throughout Southern California to Downtown Los Angeles and from Los Angeles, throughout the San Fernando Valley and into Ventura County and Antelope Valley.

30 Blumenberg, Evelyn, "Reverse Commute Transit Programs and Single Mothers on Welfare: A Policy Mismatch?" Institute of Transportation Studies, Volume 1, Number 2: December 2002. 31 Blumenberg, Evelyn and Paul Ong, "Cars, Buses, and Jobs: Welfare Perticipents and Employment Access in Los Angeles". The University of California Transportation Center, Spring 2002.

Community Profile 3-41 ~~ VENTUR COUNTY

LEGtND Transit Lines --- MTA Bus Lines Metro Blue Line Metro Green Line Melro Red Line Metro Gold Line

---l-l--+ Metrolink Pac i ( i c.

Maior Employers o 500 " 1,000 employees o c e a Il- o LOOI - 2,500 employees • 2.501 - 7,500 employees e 7,501 " 122,600 employee

_ low/Moderate Income Areas

D Neighborhood Service Areas oCiwof Los Angeles Cities/Unincorporated Aleas

- • - County Boundary -- Freeways

-E=:~:::":~"=1:-~~-'"'-~JMite, _ S"UlC': CO,,,", T~.' 0,," 2000: Cilyn! In, A"golo, GIS; HUD FIGUH 3-8 CITY 01 lOS ANGfUS Employment Access Anal sis of 1m ediments to Fair Housin Choice Lending Practice

One of the key aspects of fair housing choice is equal access to financing for the purchase or improvement of a home. This chapter reviews the lending practices of financial institutions and the accessto financing for all households, particularly minority households and those with low and moderate incomes. This chapter will also examine lending patterns in low and moderate-income neighborhoods and areas of minority concentration.

4.1 Legislative Protection

Financial institutions have not always employed fair lending practices. Credit market distortions and other activities such as "redlining" and "steering" were prevalent and prevented some groups from having equal access to credit. The 1977 Community Reinvestment Act (CRA) and the subsequent Home Mortgage Disclosure Act were designed to improve accessto credit for all members of the community, as well as hold the lending industry responsible for community lending.

Definitions

Racial Redlining: Racial redlining is the practice whereby mortgage lenders and insurers figuratively draw a red line around minority neighborhoods and refuse to make mortgage loans or insurance available inside the redlined area. Broadly defined, racial redlining encompasses not only the direct refusal to lend or provide insurance in minority neighborhoods, but also procedures that discourage the submission of mortgage loan and insurance applications from minority areas, and marketing policies that exclude such areas.1

Steering: From a lending perspective, steering is defined as a practice where a borrower with adequate credit is steered into a higher-interest loan and/or higher upfront costs than the borrower can qualify.

4.1.1 Community Reinvestment Act

The Community Reinvestment Act (CRA) is intended to encourage regulated financial institutions to help meet the credit needs of communities, including the needs of low and moderate income households, CRA applies to federally insured depository institutions, national banks, thrifts, and state-chartered commercial and savings banks. Depending on the type of institution and total assets, a lender may be examined by different supervising agencies for its CRAperformance.

Definition adopted from Racial Redlining: A Study of Racial Discrimination by Banks and Mortgage Companies in the United States by Jonathan Brown and Charles Bennington, 1993. lending Practice 4-1 , Analysis of Impediments to Fair Housing Choice

CRAratings are provided by the Federal Reserve Soard (FRS), Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), and Office of Thrift Supervision (OTS). The FRS is responsible for providing CRA evaluation of state- chartered banks that are members of the Federal Reserve. The FDIC conducts CRA examinations of State-chartered institutions that are not a member of the Federal Reserve System. The OCC assesses CRA compliance for national banks and the OTS assesses compliance for thrifts and savings banks. However, the CRA rating is an overall rating for an institution and does not provide insights regarding the lending performance at specific locations by the institution. The Federal Financial Institutions Examination Council (FFIEC) promotes consistency in the implementation of the CRA Regulation by periodically publishing information to assist the various monitoring agencies and by facilitating uniform data reporting. 4.1.2 Home Mortgage DisclosureAct

In tandem with the CRA, the Home Mortgage Disclosure Act (HMDA) requires lending institutions to make annual public disclosures of their home mortgage lending activity.

Under HMDAt lenders are required to disclose information on the disposition of home loan applications and on the race or national origin, gender, and annual income of loan applicants.

Two types of financing are covered by HMDA - conventional and government-backed. Conventional financing refers to market-rate loans provided by private lending institutions such as banks, mortgage companies, savings and loans, and thrift institutions. Government-backed financing refers to loans often at below-market interest rates that are typically issued by private lenders that are guaranteed by federal agencies. These loans are offered to lower and moderate-income households who may experience difficulty in obtaining home mortgage financing in the private market due to income and equity issues. Several federal government agencies offer loan products that have below-market interest rates and are insured ("backed") by the agencies. Sources of government-backed financing include the Federal Housing Administration, the Department of Veterans Affairs, and the Rural Housing Services/Farm Service Agency (RHA/FSA). Although government-backed loans are usually offered to consumers through private lending institutions, loans backed by local jurisdictions (such as silent second loans by cities and counties) are not covered under HMDA.

HMDA data provide some insight into the lending patterns that exist in a community. However, HMDAdata is only an indicator of potential problems; the data cannot be used to conclude definite redlining or discrimination practices. This is due to the lack of detailed information on loan terms or specific reasons for denial.

This chapter examines detailed HMDA data for the City of Los Angeles for 2002, the most recent year of available data at the writing of this report. Data are aggregated by Nelghborhood Service Areas (NSAs). To provide proper context for discussions in this Chapter, Table 4-1 summarizes the demographic and housing characteristics in each NSA (see Chapter 3 for details). Homeownership rate by race/ethnlcity is also presented.

4-2 lending Practice City of Los Angeles

Table 4-1: Demographic and Housing Characteristic by Neighborhood Service Area

Neighborhood Service Area ~~ North Valley 32% 51% 4% 10% 61% 61% South Valley 50% 34%· 4% 7% 44% 45% West Los Angeles 61% 17% 5% 13% 36% 42% Central 27% 45% 7% 18% 15% 16% East Los Angeles 12% 71% 2% 14% 46% 38% South Los Angeles 3% 57% 37% 2% 42% 34% Harbor 25% 56% 8% 8% 42% 42% Total 30% 470/0 11% 10% 39% 39%

~.-:tm~ ~ __ Source: 2000 Census

4.2 Conventional Loans

The City of Los Angeles has an active housing market, as evidenced by the nearly 74,000 loan applications processed in 2002 (Table 4-2). Citywide, approximately 73 percent of the loan applications were approved, 15 percent were denied, and 13 percent were withdrawn or closed by the applicant. South Valley had the most loan applications, while the Harbor area had the fewest.

Table 4-2: Disposition of Conventional Home Purchase loan A lications b Nei hborhood Service Area

North Valley 11,652 72.2% 2,484 15.4% 2,012 12.5% 16,148 South Valley 15,173 75.8% 2,517 12.6% 2,339 11.7% 20,029 t Los Angeles 8,087 78.7% 1,028 10.0% 1,165 11.3% 10,280 Central 5,396 73.1% 1,023 13.9% 964 13.1% 7,383 East Los Angeles 4,299 70.9% 894 14.7% 873 14.4(1/0 6,066 South Los Angeles 6,450 61.1% 2,458 23.3% 1,640 15,5% 10,548 Harbor 2,489 73.0% 514 15,1% 406 11.9% 3,409 Total 53,546 72.5% 10,918 14.8% 9,399 12.7% 73,863 Source: Home Mortgage Disclosure Act (HMDA), 2002. Note: 1. "other" includes applications withdrawn by applicant or incomplete applications,

As demonstrated in Table 4-2, Disposition of Conventional Home Purchase Loan Applications by Neighborhood Service Area, loan approvals vary by geographic area. The areas of West Los Angeles and South Valley exhibit the highest approval rates (78.7 percent and 75.8 percent! respectively). By comparison, loan applications in the

Lending Practice 4-3 Analysis of Impediments to Fair Housing Choice community of South Los Angeles had the lowest approval rating of 61.1 percent. West Los Angeles and South Valley have the highest White population among the seven NSAs, while South Los Angeles has the highest proportion of minority population (see Table 4- t), As further explained in the following section, variations in loan approval rates are often associated with the incomes and ethntctty of applicants. 4.2.1 Disposition of Loan Applications by Race/ Ethnicity of Applicant

Within the City of Los Angeles, Hispanic households represent the largest racial/ethnic group at 47 percent of all households. This is followed by White households at 30 percent, Black households at 11 percent, and Asian households at 10 percent (Table 4- 1). Native American and other ethnic groups accounted for three percent of all households.

White households represent the largest proportion of homeowners in the City of Los Angeles at 54.5 percent. This is followed by Hispanics/Latinos at 22.9 percent, with Black households representing lOA percent of homeowners, Asians 9.7 percent, and Native Americans at 0.5 percent. Since Hispanics comprise the largest racial/ethnic group, it appears that they are under-represented in the homebuyer market.

Citywide, White residents submitted the most home loan applications, accounting for approximately 44 percent of all applications. Hispanic residents accounted for 20 percent of applications, while Asians comprised nine percent. Black applicants accounted for six percent of applications, while Native Americans comprised less than one percent. Approximately two percent of the applications were filed by joint applicants; the detailed race information on these applications is not tabulated. Furthermore, 21 percent of the applicants did not provide race data.

In addition to geographic area, home loan approval rates vary across racial and ethnic groups, as shown in Tables 4-3. Different racial/ethnic groups had varying approval rates within each NSA. White, Joint, and Asian applicants had the highest approval rates throughout the City, at 77.9 percent, 75.8 percent, and 75.2 percent, respectively. Black applicants had the lowest approval rate throughout the City at 62.8 percent. All ethnic groups other than Black applicants achieved highest approval rates in West Los Angeles and lowest approval rates in South Los Angeles.

• Native American applicants had the greatest variation in approval rates among jurisdictions. Approval rates ranged from 80 percent in West Los Angeles to 47.5 percent in South Los Angeles. Native American applicants experienced the second-lowest application approval throughout the City at 6504 percent approval.

• Asian applicants had one of the highest approval rates throughout the City, with rates above 70 percent in all but one area (South Los Angeles at 62.8 percent). This group rated highest in West Los Angeles and lowest in South Los Angeles.

• Black applicants experienced the least variation in approval ratings, ranging from 61.5 percent to 71.1 percent, and had the lowest approval rates in the City at 62.8 percent. This group fared best in the South Valley and worst in East Los Angeles.

4-4 lending Practice City of Los Angeles

.. Hispanic applicants had an overall approval rate of 68.1 percent, the third lowest in the City. Hispanic households fared best in West Los Angeles at 73 percent and worst in South Los Angeles at 64.1 percent.

.. White applicants experienced the highest overall approval rate throughout the City at nearly 78 percent overall. With the exception of the South Los Angeles area (with an approval rate of 58.9 percent), White household loan approval rates had little variation, differing at the most by only 4.3 percent. As with the majority of the other groups, White households fared best in West Los Angeles and worst in South Los Angeles.

.. Joint applicants had the second highest overall approval rate in the City after White households at 75.8 percent, rating highest in West Los Angeles and lowest in South Los Angeles. Table 4~3: Approval Rate by Race/Ethnicity of Applicant - Conventional Home Purchase Loans

Neighborhood Service Area ~ North Valley 72.6% 77.5% 63.8% 70.5% 76.8% 70.2% 69.0% 61.6% South Valley 70.6% 76.6% 71.1% 71.4%1 78.5% 79.2% 73.2% 68.8% West Los Angeles 80.0% 81.4% 66.0% 73.0% 80.7% 83.5% 70.6% 72.3% Central 56.3% 71.7% 62.8% 59.1% 79.1% 69.6% 64.8% 65.2% East Los Angeles 69.6% 73.4% 61.5% 66.8% 76.4% 81.4% 67.1% 63.4% South Los Angeles 47.5% 62.8% 61.9% 64.1% 58.9% 65.3% 57.4% 53.6% Harbor 60.0% 77.4% 62.1% 71.6% 78.7% 72.9"/0 76.4% 61.5% Total 65.4% 75.2% 62.8% 68.1% 77.9% 75.8% 69.5% 64.7% Source: Home Mortgage Disclosure Act (HMDA), 2002.

4.2.2 Disposition of loan Applications by Applicant Income

Income is one of the most important factors in determining access to credit. Therefore, loan approval rates generally have a positive correlation to household income. In Los Angeles, this correlation was present among loans processed in 2002, as approval rates were highest among the upper-income applicants and lowest among lower-income applicants (Table 4-4). Among applicants earning less than 50 percent of the County Median Family Income (MFI), only 47.7 percent of applications were approved. By contrast, 75.5 percent of applications from households earning more than 120 percent of MFI were approved. This is a difference of 27.8 percentage points,

South Valley, West Los Angeles, Central Los Angeles and the Harbor area all had approval rates that exceeded the citywide rates across nearly all income levels. The highest approval rates were experienced by West Los Angeles, while the lowest approval rates were located within South Los Angeles. Differences between local and citywide loan approval rates were greatest for households earning more than 120 percent of MFI, which ranged from 60.7 percent in South Los Angeles to 80.1 percent in West Los Angeles.

Lending Practice 4-5 Analysis of Impediments to Fair Housing Choice

Table 4-4: Approval Rate by Applicant Income - Conventional Home Purchase Loans

Neighborhood Service Area North Valley I:r;;;r:~~~~48.9% 62.2% 70.8% 72.2% 75.1% 64.3% 72.2% South Valley 51.3% 70.9% 73.0% 75.2% 77.5% 65.0% 75.8% West Los Angeles 41.9% 67.1% 75.0% 75.1% 80.1% 60.6% 78.7% Central 42.6% 57.1% 62.7% 68.3% 75.9% 56.6% 73.1% East Los Angeles 53.2% 61.4% 69.0% 71.5% 74.0% 64.7% . 70.9% South Los Angeles 44.2% 63.5% 64.9% 63.4% 60.7% 50.5% 61.1% Harbor 51.3% 69.6% 72.0% 75.5% 75.0% 53.1% 73.0% Total 47.7% 64.4% 69.3% 71.2% 75.5% 60.4% 72.5% Source; Home Mortgage Disclosure Act (HMDA), 2002. 4.2.3 Race Differences by Income of Applicant

Analyzing the differences in loan approval rates by race/ethntcltv separately from income does not always reveal important differences among groups. For this reason, an analysis of lending patterns for both race/ethntcitv and income together is useful in revealing differences among applicants of different races/ethnlcities within the same income level. While this analysis provides a more in-depth look at lending patterns, it still cannot provide a definitive reason for any discrepancy. ASide from income, many factors can contribute to the availability of financing, including credit history, the ability to provide a down payment, and knowledge of the home buying process, among others. The HMDA data does not provide insight into these and many other factors. However, the City should continue to monitor the approval rates among racial and ethniC groups and take appropriate actions to remove barriers to financing, including credit counseling, down payment assistance, and home buyer education programs.

As indicated in Table 4-5, approval rates vary widely among ethnic groups within the same income categories. It is important to note that the overall number of Native American applicant numbers was lower than other ethnic groups, often not reaching double digits, and thus results are skewed. Black and Hispanic applicants frequently received the lowest approval rate regardless of income. Exceptions include South Los Angeles, where Hispanics received the highest approval rating (other than Native applicants, of which there were only four) at nearly 66 percent, and the Harbor area, where Joint applicants received the lowest approval rating in both the low and middle income categories.

Within the low/moderate income category, Asians had the highest approval rates while Black applicants had the lowest approval rates. Within the middle income category, Asians again had the highest approval rating, while Native Americans and Blacks had the lowest ratings. Within the upper income level, Joint applicants had the highest ratings, followed by White applicants, while Native applicants fared the worst with the lowest approval rates in five NSAs.

4-6 Lending Practice City of Los Angeles

Table 4-5: Approval Rate by Applicant Race and Income Conventional Home Purchase loans

District IEthnicitv~~~;- Native 3 66.7% 13 69.2% 33 72.7% Asian 108 71.3% 361 79.8% 1,403 78.3% North Black 37 51.4% 95 58.9% 297 67.3% Valley Hispanic 805 60.6% 1,635 71.3% 2,352 73.8% White 399 66.9% 1,103 75.7% 3,872 78.6% Joint 27 63.0% 63 73.0% 319 71.2% Native 4 100.0% 8 50.0% 32 71.9% Asian 69 71.0% 255 79.2% 851 76.6% South Black 25 48,0% 82 73.2% 416 72.4% Valley Hispanic 242 62.4% 727 72.9% 1,301 73.1% White 552 73.0% 1,649 78.0% 9,107 79.6% Joint 15 86.7% 53 73,6% 436 80.5% Native 2 100.0% 0 -- 13 76.9% Asian 16 75.0% 86 82.6% 598 81.6% West Los Black 9 66.7% 25 64.0% 140 65.7% Angeles Hispanic 19 47.4% 42 73.8% 320 76.6% White 81 70.4% 374 77.5% 5,979 81.7% Joint 7 85.7% 12 83,3% 296 83.1% Native 1 100.0% 3 66.7% 12 50.0% Asian 64 65.6% 196 74.5% 1,217 72.2% Black 19 26.3% 32 34.4% 202 71.3% Central Hispanic 64 46.9% 124 58.9% 281 64.4% White 69 68.1% 246 73.6% 3,244 80.5% Joint 0 -- 12 33.3% 146 72.6% Native 2 0.0% 9 100.0% 9 55.6% Asian 79 70.9% 180 73.3% 432 74.5% East Los Black 12 33.3% 39 64.10/0 80 65,0% Angeles Hispanic 343 60.6% 659 69.0% 824 67.8% White 144 66.7% 399 73.9% 1,467 78.9% Joint 7 57.1% 24 75.0% 127 83.5% Native 4 100.0% 16 50.0% 18 33.3% Asian 27 63.0% 76 76.3% 262 60.3% South Los Black 449 57.7% 844 63.4% 1,365 62.0% Angeles Hispanic 1,220 65.9% 1,728 66.4% 1,065 60,9% White 109 53.2% 212 57.5% 668 73.8% Joint 14 21.4% 36 66.7% 69 75.4%

Lending Practice 4-7 Analysis of Impediments to Fair Housing Choice

Table 4-5: Approval Rate by Applicant Race and Income Conventional Home Purchase Loans

District IEthn;CitY~~ Native 1 100.0% 1 100.0% 10 50.0% Asian 37 75.7% 73 78.1% 182 78.6% Harbor Black 15 60.0% 68 57.4% 91 69.2% Area Hispanic 138 70.3% 294 73.8% 404 70.0% White 108 65.7% 278 80.9% 874 80.0% Joint 6 50.0% 37 54.1% 137 79.6% Source: Home Mortgage Disclosure Act (HMDA), 2002.

4.2.4 Disposition of Loan Applications by Gender

Historically, females tend to have limited access to mortgage financing when compared to mares. This is primarily due to income. However, while female applicants comprised a smaller proportion of loan applicants in all NSAs, loans for female applicants were approved at a similar rate as male applicants according to the 2002 HMDAdata (Table 4-6).

In all NSAs, the approval rates of males and females were within three percentage points of each other. Female applicants generally experienced the same or slightly higher approval rates than males except in Central Los Angeles, where their approval rate was three percentage points lower than that of mares.

Table 4-6: Approval Rate by Gender - Conventional Home Purchase Loans

Neighborhood Service Areas t::~T~~~,;e~ North VaUey 16,148 72% 5,520 71% 3,810 72% South Valley 20,029 76% 7,172 73% 5,115 76% West Los Angeles 10,280 79% 3,231 76% 2,266 79% Central 7,383 73% 3,250 74% 1,994 71% East Los Angeles 6,066 71% 2,244 69% 1,641 70% South Los Angeles 10,548 61% 4,304 60% 3,274 60% Harbor 3,409 73% 1,136 71% 756 72% Total 73,863 72% 26,857 71% 18,856 72% Source: Home Mortgage Disclosure Act (HMDA), 2002.

4-8 Lending Practice City of Los Angeles

4.2gS Lending in low/Moderate Income and Minority Neighborhoods

HMDA data may also be used to measure lending activities in low- and moderate-income neighborhoods and in minority concentrated areas, as illustrated in Table 4-7. South Los Angeles had the most applications from low- and moderate- income neighborhoods (8,936 applications), with more than twice the number of the next closest area - East Los Angeles (2,928 applications). In contrast, West Los Angeles had only 306 applications from low- and moderate-income neighborhoods. Overall, approval rates from low- and moderate-income neighborhoods were lower than area-wide approval rates.

Table 4-7: Conventional lending in low/Moderate Income and Minorit Nei hborhoods

North Valley 16/148 72.2% 2,037 65.9% 6/533 68.7% South Valley 20/029 75.8% 1,684 71.7% 3/127 71.6% West Los Angeles 10/280 78.7% 306 71.2% 770 76.8%

Central 71383 73.1 % 21813 67.8% 31264 68.4%

East Los Angeles 61066 70.9% 2,928 66.3% 5,730 70.1% South Los Angeles 10,548 61.1% 8,936 60.2% 10,545 61.1%

Harbor 3,409 73.0% 1,118 65.8% 11825 69.1%

Total 73,863 72.5% 191822 64.2% 311794 66.9%

Source: Home Mortgage Disclosure Act (HMDA), 2002.

South Los Angeles realized the lowest rate of 60.2 percent. The South Valley realized the highest rate of 71.7 percent followed by West Los Angeles at 71.2 percent. The difference between the highest and lowest approval rates was nearly 12 percentage points. The greatest difference between the overall approval rate and the approval rate realized in low-and moderate-income neighborhoods was 8 percentage polnts in West Los Anqeles, While the least difference was experienced in South Los Angeles. Since income is one of the crucial factors in obtaining financing, lower approval rates in low- and moderate-income areas can be expected.

South Los Angeles also had the greatest number of minority applicants at 10,545 applications, or nearly 100 percent of the area's total applicants, 61.1 percent of which were approved for a loan. This represents the lowest approval rate of all minority neighborhoods. The highest approval rates within minority neighborhoods were experienced in West LosAngeles at 76.8 percent. Overall, the approval rates in minority neighborhoods were lower than area-wide approval rates by flve percentage points.

Lending Practice 4-9 Analysis of Impediments to Fair Housing Choice

4.3 Government-Backed Loans

Government-backed loans offer an alternative to conventional financing. According to HMDA data for the City of Los Angeles, government-backed loans were approved at significantly higher rates than were conventional loans for lower-income applicants (Table 4-8). Among households earning less than 50 percent of MFI, the approval rate for government-backed loans was 72 percent. That is in contrast to the 47.7 percent approval rate for conventional loans, a difference of 24.3 percentage points. As illustrated in Figure 4-1, as household income increases for loan applicants, the gap between approved government-backed and conventional loans becomes narrower, Whereas lower-income applicants are more likely to be granted government-backed loans than conventional loans, those applicants with higher incomes experience similar rates of approval. Overall, government-backed loans tended to have higher approval rates.

Figure 4-1: Comparison of Approved Conventional Loans and Government-Backed Loans

75% "C ~ 0 Q.... Q. 65%

t1Government Backed EDConventional

It is important to note that more people applied to conventional loans than government- backed loans. In most cases, those communities with fewer government-backed loan applications were the same as those with fewer conventional loan applications. The exception is the West Los Angeles service area, which applied for less than one percent of the City's government-backed loans, but applied for approximately 14 percent of the City's conventional loans.

4-10 Lending Practice City of Los Angeles

Table 4-8: Approval Rate by Applicant Income - Government-Backed Loans

Neighborhood Service Areas ~g:~2tJ:;]3~ North Valley 75.8% 76.4% 80.2% 80.2% 79.0% 50.0% 77.7% South Valley 84.0% 78.0% 76.5% 80.7% 77.5% 58.1% 76.9% West Los Angeles -- 66.7% 66.7% 100.0% 55.0% 42.9% 62.2% Central 33.3% 72.2% 68.2% 40.0% 71.6% 46.2% 63.8% East Los Angeles 67.6% 77.3% 72.0% 71.0% 72.7% 41.9% 70.9% South Los Angeles 70.10/0 68.9% 74.0% 74.9% 69.5% 41.6% 69.6% Harbor 66.7% 80.0% 79.7% 74.0% 79.2% 57.1% 77.6% Total 72.0% 73.1% 75.9% 76.1% 74.4% 46.2% 73.1% Note: Total Service Area Approval IS based on all applications 111 the entire Neighborhood Service Area - "weighted average" of approval rates by income categories. Source: Home Mortgage Disclosure Act (HMDA), 2002.

4.3.1 Race Differences by Income

As was the case among conventional home loans, approval rates for government-backed loans tend to vary among ethnic groups of similar income levels (Table 4-9). Overall applications for government-backed loans were relatively low for most ethnicities. One exception is Hispanics who are overrepresented as an applicant group. As with conventional loans, the number of Native American applicants overall was lower than other ethnic groups, and in several NSAs, Native Americans had no applications.

Among low- and moderate-income applicants, Whites had the greatest approval rates, while Asians had the lowest. Among middle-income households, Asians had highest approval rates, while Joint applicants had the lowest. Within upper-income households, White and Joint applicants fared best, while Hispanic applicants fared worst.

Table 4-9: Approval Rate by Applicant Race and Income Government-Backed Loans

District IEthn'city~ Native 0 -- 1 100.0% 0 -- Asian 13 76.9% 23 87.0% 50 84.0% North Black 12 75.0% 15 93.3% 13 92.3% Valley Hispanic 309 75.7% 436 79.6% 278 78.4% White 35 77.1% 67 79.1% 62 71.0% Joint 3 66.7% 7 57.1% 13 92.3% Native 0 -- 0 -- 0 -- Asian 11 63.6% 16 62.5% 13 92.3% South Black 4 100.0% 17 88.2% 16 81.3% Valley Hispanic 76 80.3% 119 75.6% 99 71.7% White 36 80.6% 56 85.7% 63 76.2% Joint 1 100.0% 4 75.0% 10 100.0%

Lending Practice 4-11 Analysis of Impediments to Fair Housing Choice

Table 4-9: Approval Rate by Applicant Race and Income Government-Backed Loans

District IEthnicitY~~P~~ Native 0 -- 0 -- a -- Asian 1 0.0% 1 100.0% 1 0.0% West Los Black 1 0.0% 3 66.7% 2 50.0% Angeles Hispanic 2 100.0% 4 75.0% 3 33.3% White 2 100.00/0 2 100.0% 8 87.5% Joint a -- 0 -- 0 -- Native 0 -- 0 -- 0 -- Asian 4 33.3% 2 100.0% 6 83.3% Black 0 -- 0 -- 3 66.7% Central Hispanic 17 64.7% 23 56.5% 36 66.7% White 3 66.7% 9 44.4% 18 72.2% Joint 0 -- 0 -- 0 -- Native 0 -- 1 100.0% 0 -- Asian 5 60.0% 10 60.0% 11 90.9% East Los Black 1 100.0% 6 83.3% 3 33.3% Angeles Hispanic 143 73.4% 196 68.9% 132 72.7% White 8 100.0% 25 84.0% 27 66.7% Joint 2 100.0% 6 83.3% 3 100.0% Native 2 100.0% 0 -- 2 100.0% Asian 6 66.7% 9 66.7% 9 66.7% South Los Black 122 68.9% 184 73.9% 138 73.2% Angeles Hispanic 487 70.6% 557 75.9% 277 69.0% Whlte 19 68.4% 22 63.6% 43 69.8% Joint 4 25.0% 5 60.0% 1 0.0% Native 0 -- 0 -- 0 -- Asian 1 100.0% 3 66.7% 8 75.0% Harbor Black 4 75.0% 7 85.7% 16 87.5% Area Hispanic 44 61.4% 70 81.4% 46 67.4% White 2 100.0% 26 69.2% 23 95.7% Joint 2 100.0% 1 0.0% 4 100.0% Source: Home Mortgage Disclosure Act (HMDA), 2002.

4-12 Lending Practice City of Los Angeles

4.4 Performance by Lender

The top lenders in the City included the following for the year 2002:

.. Countrywide Home Loans .. Washington Mutual Bank II World Savings Bank " Wells Fargo Home Mortgage • First Franklin Financial .. Greenpoint Mortgage • WMCMortgage Corp. • Metrociti Mortgage, LLC • Fieldstone Mortgage Company • Bank of America, N.A. a Flagstar Bank

As shown in Table 4-10, Countrywide and Washington Mutual were among the top five lenders in all seven NSAs, while First Franklin Financial, Bank of America, and Wells .Fargo Home Mortgage were leading lenders in four of the NSAs and Metrociti Mortgage was a top lender in three NSAs.

Among the top five lenders (Washington Mutual, Countrywide, First Franklin Financial, Bank of America, and Wells Fargo), Wells Fargo had the highest approval rates, while First Franklin Financial had the lowest (in two NSAs). Wells Fargo had the highest approval rate (90.5 percent) in West Los Anqeles, while World Savings Bank had the overall lowest (56.5 percent) in North Valley.

Much of the difference in loan approval rates among lenders is due to the percentage of withdrawn or closed loan applications. An understanding of the home buying and loan processes, income/equity requirements, and financial responsibility are important to a successful loan application and home purchase. Many households, particularly those entering the homeownership market the first time, lack financial knowledge to deal with the home buying process.

A high rate of withdrawn or closed applications can indicate a lack of knowledge of the loan application and/or homebuying process or a lack of adequate assistance by the lender throughout the process. Among the top lenders, World Savings Bank had the highest percentage of loans withdrawn or closed at 29.8 percent in the North Valley, followed by Fieldstone Mortgage Company at 26.7 percent in the Harbor Area. As shown in Table 4-10, every NSA with the exception of East Los Angeles experienced at least one case of withdrawn or closed loans above 20 percent.

lending Practice 4-13 Analysis of Impediments to Fair Housing Choice

Table 4-10: Disposition of Conventional Home Purchase Loans by Lending Institution

Ne;.hbor-Ihood Service Area Lender Name Countrywide Home Loans r~1,410 8.7 1,170 83.0% 40 2.8% 200 14.2% Washington Mutual Bank 953 5.9 772 81.0% 104 10.9% 77 8.1% North First Franklin Financial 829 5.1 593 71.5% 144 17,4% 92 11.1% Valley WMC Mortgage Corp. 827 5.1 533 64,4% 276 33,4% 18 2.2% World Savings Bank 781 4.8 441 56.5% 107 13.7% 233 29.8% Countrywide Home Loans 1,810 9 1,486 82.1% 62 3.4% 262 14.5% Washington Mutual Ban 1,647 8.2 1,398 84.9% 142 8.6% 107 6.5% South Metrociti Mortgage LLC 1,059 5.2 887 83.8% 15 1.4% 157 14.8% Valley World Savings Bank 1,011 5 605 59.8% 138 13.6% 268 26.5% Wells Fargo Home Mortg. 888 4.4 793 89.3% 50 5.6% 45 5.1% Washington Mutual BanK 1,335 12.9 1,130 84.6% 104 7.8% 101 7.6% Wells Fargo Home Mortg. 844 8.2 764 90.5% 38 4.5% 42 5.0% West Los Bank of America, N.A. 757 7.3 611 80.7% 52 6.9% 12.4% Angeles 94 Countrywide Home Loans 639 6.2 535 83.7% 14 2.2% 90 14.1% Greenpoint Mortgage 469 4.5 311 66.3% 50 10.7% 108 23.0% Washington Mutual Bank 907 12.2 780 86.0% 66 7.3% 61 6.7% Countrywide Home Loans 546 7.3 439 80.4% 25 4.6% 82 15.0% Central Metrociti Mortgage LLC 423 5.7 354 83.7% 11 2.6% 58 13.7% Wells Fargo Home Mortg. 393 5.3 340 86.5% 21 5.3% 32 8.1% Bank of America, N.A. 383 5.1 303 79.1% 38 9.9% 42 11.0% Washington Mutual Bank 559 9.2 458 81.9% 37 6.6% 64 11.4% Countrywide Home Loans 474 7.8 382 80.6% 19 4.0% 73 15.4% East Los Bank of America, N.A. 287 4.7 203 70.7% 41 14.3% 43 15.0% Angeles First Franklin Financial 273 4.5 178 65.2% 32 11.7% 63 23.1% Metrociti Mortgage LLC 256 4.2 220 85.9% 2 0.8% 34 13.3% Washington Mutual Bank 966 9.1 757 78.4% 76 7.9% 133 13.8% Wells Fargo Home Mortg. 701 6.6 562 80.2% 87 12.4% 52 7.4% South Los First Franklin Financial 529 5 327 61.8% 73 13.8% 129 24.4% Angeles Countrywide Home Loans 521 4.9 397 76.2% 48 9.2% 76 14.6% Bank of America, N.A. 471 4.4 322 68.4% 99 21.0% 50 10.6% Countrywide Home Loans 254 7.4 203 3.5% 42 16.5% Fieldstone Mortgage Co. 206 6 139 67.7~ 5.8% 55 26.7% Harbor Washington Mutual Bank 186 5.4 148 79.6% 12 6.5% 26 14.0% Area Flagstar Bank 179 5.2 157 87.7% 20 11.2% 2 1.1% First Franklin Financial 168 4.9 137 81.5% 15 8.9% 16 9.5% Note: Percent of Total Applications represents a lender's market share wlthln a Neighborhood Service Area. For example, among 16,148 households applied for home purchase loans in the North Valley (Table 4-7),1,410 (8.7 percent) were applying for a loan from Countrywide.

Source: Home Mortgage Disclosure Act (HMDA), 2002.

4-14 Lending Practice City of Los Angeles

As discussed in Chapter 2, Community Outreach, several lending institutions were contacted to get an understanding of their fair housing programs and employee training options, and to determine if working relationships had been established with any fair housing organizations in the City. However, only Fannie Mae was available or willing to be interviewed to offer some insight into the workings of their company. Fannie Mae, which is authorized to buy mortgages from lender partners to expand the flow of mortgage money thereby replenishing the supply of lendable money, will not purchase loans that are considered predatory. If a loan is discovered to be predatory, Fannie Mae requires the lender to repurchase it. The company provides guidelines to lender partners as to what constitutes a predatory loan, provides education for lenders that want diversity training for their company, and educates consumers about borrowing through workshops and their webslte.?

4.4.1 eRA Rating

Community Reinvestment Act (CRA) performance reviews of financial institutions are conducted by the Federal Reserve Board (FRB), Federal Financial Institutions Examination Council (FFIEC), Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC). CRA ratings are provided for the main or regional headquarters of the financial institutions. Among the top 11 lenders active in Los Angeles, only four received ratings from the FFIEC- Washington Mutual Bank, World Savings Bank, Bank of America, N.A., and Flagstar Bank. OTS awarded an "outstanding" rating for Washington Mutual and World Savings Bank in 2000 and 2001, respectively, and a "satisfactory" rating to Flagstar in 2001.3 Bank of America received an "outstanding" rating from OCCin 1997.

4.5 Subprime Lending Market

In general, lending institutions target two markets of clients: prime and subprime. According to the Federal Reserve, prime mortgages are offered to persons with excellent credit and employment history, and income adequate to support the loan amount. Subprime loans are loans to borrowers who have less-than-perfect credit history or employment history, or other factors such as limited income. These borrowers typically do not satisfy the standard Fannie Mae or Freddie Mac underwriting guidelines. In general, the quality of the loan applicant defines the loan as subprlme. Subprime loans usually have an interest rate of at least one to six percentage points above that of a prime mortgage.

Another important distinction is the lack of regulatory oversight of many lending institutions that originate subprime loans. According to a Federal Reserve report, many subprime lenders are not owned by regulated financial institutions. Unlike banks and savings and loans, which must submit regular regulatory compliance audits and whose activities are overseen by a variety of institutions such as the FDIC and OTS, many subprime lenders are not subject to rigorous oversight. Independent mortgage companies do most of the subprime lending in the United States, and only the Federal Trade Commission (FTC), which has limited resources for the immense market it

Zeeda Daniele, Senior Deputy Director of the LA Partnership Office. Fannie Mae. November 2004. 3 No CRA rating information beyond 2001 was available for the major lenders in Los Angeles after 2001. Lenders are not rated annually by the overseeing agencies. lending Practice 4-15 Analysis of Impediments to Fair Housing Choice monitors, regulates subprime lenders." An important trend to note, however, is that an increasing number of large banks such as Citibank, Countrywide, and Washington Mutual have entered the subprime market either directly or through the acquisition of other financial institutions.

Subprime lenders play an important role in the market by providing financing to those persons who might not otherwise be able to obtain credit from the prime market, The subprime market not only serves those who may have past credit problems or other financial risk factors, but many others as well. For example, the subprirne market may be more attractive to a borrower who may have a good credit history but may not have sufficient assets, Similarly, the subprime market may be more attractive to someone who is self-employed, has variable income, or simply wants to limit disclosure of a financial situation, Evidence shows that some subprime lenders, which generally operate outside the federal regulatory structure, engage in abusive practices that strip borrowers' home equity or place them at increased risk of foreclosure." 4.5.1 Lending in Low- and Moderate-Income/Minority Neighborhoods

As discussed above, a CRA rating does not always reflect a lender's performance in a specific geographic area. Examining the presence of identified subprime lenders in specific areas can better illustrate lending practices by specific institutions and reveal possible trends. Four of the most active lenders in the City -- First Franklin Financial, WMC Mortgage Company, Greenpoint Mortgage, and Fieldstone Mortgage Company -- were identified as subprime lenders by HUD, Table 4-10 illustrates these institutions' activity in low- and moderate-income neighborhoods and minority concentrated areas. As shown, First Franklin Financial was the most active lender, with loans in four of the City's seven Neighborhood Service Areas. WMC Mortgage had the lowest approval rating within low- and moderate-income neighborhoods in North Valley, with a difference of nearly eight percentage points from the overall approval rate in the area. WMC Mortgage also had the lowest ratings in minority neighborhoods for that NSA, at seven points lower than the overall approval rate of 68.7 percent.

Unlike in the prime lending market, overly high approval rates in the subprime market is a potential cause for concern when the target clients are considered high risk. High approval rates may indicate aggressive lending practices. According to Table 4-11, loan applicants in the Harbor Area had significantly higher approval rates by subprime lenders than all lenders as a whole.

4 Federal Reserve Governor Edward M Gramlich, "Predatory Lending" Cascade (Federal Reserve Bank of Philadelphia), Summer/Fall, 2000. 5 U.S. Department of Housing and Urban Development. Unequal Burden In Los Angeles: Income and Racial Disparities in Subprime Lending. April 2000.

4-16 Lending Practice City of Los Angeles

Table 4-11: Subprime lending in low- and Moderate-Income/Minority Nei hborhoodsb Lendin Institution

City of Los An eles Subprime Lenders North Valley 67.2% 65.9% 68.3% 68.7%

First East Los Angeles 63.8% 66.3% 65.7% 70.1% Franklin South Los Angeles 62.0% 60.2% 61.8% 61.1% Financial Harbor Area 73.6% 65.8% 77.9% 69.1% Total 64.2% 68.8% 65.8% 65.8% WMC North Valley 58.0% 65.9% 61.4% 68.7% Mort a e Greenpoint West Los Angeles 61.5% 71.2% 61.9% 76.8% Fieldstone Harbor Area 75.6% 65.8% 71.4% 69.1% Source: Home Mortgage Disclosure Act (HMDA), 2002.

Though the subprime market usually follows the same guiding principles as the prime market, a number of specific risk factors are associated with the subprime market. According to a joint HUD/Department of the Treasury report, subprime lending generally has the following characteristics;6

" Higher Risk: Lenders experience higher loan defaults and losses by subprime borrowers than by prime borrowers.

" Lower Loan Amounts: On average/ loans in the subprime mortgage market are smaller than loans in the prime market. Estimates for average subprime loan size range between $58,000 and $85/000, compared to an average of $133,000 for all mortgages.

" Higher costs to originate: Subprime loans may be more costly to originate than prime loans since they often require additional review of credit history, a higher rate of rejected or withdrawn applications, and fixed costs, such as appraisals, that represent a higher percentage of a smaller loan.

.. Faster prepayments: Subprime mortgages tend to be prepaid at a much faster rate than prime mortgages.

• Higher Fees: Subprime loans tend to have significantly higher fees due to the factors listed above.

Anecdotal evidence and research indicate that predatory lending is an increasing problem in the Los Angeles area with subprime lenders. For instance, according to

6 U.S. Department of Housing and Urban Development and the U.S. Department of Treasury, Curbing Predatory Home Mortgage Lending. June 2000.

Lending Practice 4-17 A n a I y sis 0 f Imp e dim en t 5 to F air H 0 u 5 i n 9 C hoi c e

HUD's 2000 analysis of HMDAdata for Los Angeles County, minorities and residents of low-income neighborhoods are more likely than others to receive loans on the subprime market. UCLAstudies found evidence of a relationship between subprime lending and neighborhood conditions within the City of Los Angeles, namely, that subprime lenders are most likely to receive refinance applications and originate refinance loans in low- income, highly tax-delinquent areas with many elderly and minority residents." 8 One UCLAstudy found that "[e]ven when controlling for differences in income and financial capacity, African-Americans are approximately twice as likely as White applicants to refinance on the subprime market." 9

Additionally, the California Reinvestment Coalition (CRC) recently completed a study on subprime lending in several areas throughout the state, including Los Anqeles.r? The study consisted of interviews with reclplents of 125 subprlme loans in San Diego, Los Angeles, Sacramento, and Oakland. The key findings of the study are summarized below:

• More than one third of borrowers included in the study may have been victimized by predatory lending. .

• Nearly three-fourths of borrowers did not approach a bank or thrift for their loan. CRCspeculates that banks, thrifts, and other prime lenders are doing a poor job of making loans available to vulnerable communities due to a low number of branches in low-income and minority areas, inadequate outreach efforts, a perceived history of discrimination, and inflexible loan products.

• More than one-third of study participants reported that the idea to take out a loan secured by their home came through aggressive and targeted marketing efforts by subprime lenders.

• Nearly 70 percent of participants reported that key loan terms changed for the worst at closing, including 80 percent of African-American borrowers and 70 percent of borrowers age 55 and over.

• African-American and Latino participants were twice as likely as Whites to have prepayment penalty provisions in their loans.

• Approximately half of borrowers had points and fees exceeding five percent of the loan amount,

7 Subprime Lending and Neighborhood Conditions in the City of Los Angeles. Bill Pitkin and Neal Richman, UCLA Advanced Policy Institute. November 11, 2001. B Urban Disinvestment Revisited: Subprlme Mortgage Lending and Slum Housing in the City of Los Angeles. William Charles Pitkin, Dissertation submitted to UCLA Department of Urban Planning. 2004. 9 Ibid. 10 Stolen Wealth, Inequities in California's Subptime Mortgage Market. California Reinvestment Committee. November 2001.

4-18 Lending Practice City of Los Angeles

4 ..6 Predatory Lending

The following discussion provides an overview of predatory lending, examples of predatory lending practices, recent trends, and existing and proposed regulations. 4.6.1 Defining Predatory Lending

With an active housing market, potential predatory lending practices by financial institutions may arise. Predatory lending occurs when potential buyers are looking to purchase a new home, or when existing homeowners refinance their home to consolidate current debts such as credit cards and car payments. Predatory lending involves abusive loan practices usually targeting minority and/or low-income homeowners or those with less-than-perfect credit history.

Predatory lending often is difficult to define, since a 1S-percent interest rate on a loan to one person could be predatory while it might be appropriate for another, based on the borrower's risk factors. Predatory lending has become a growing issue in California and especially Los Angeles due to a tight housing market, high home costs, and a large minority population - typical targets for predatory lending practices.

On August 10, 2000, the Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, announced its national effort to alert Americans of the dangers of predatory lending through its "Don't Borrow Trouble" campaign. Beginning in 2001, Freddie Mac and the Los Angeles City Housing Department launched local outreach efforts through ads, Internet websites, public service announcements in English and Spanish, and a toll free number for referrals to alert the public of predatory lending practices.

The following set of general definitions for predatory lending is provided by the Federal Home Loan Mortgage Corporation (Freddie Mac):

.. High Interest Rates: Interest rates that are more than seven to eight percentage potnts above market rates.

• Excessive Fees: For example, fees charged up-front without lowering the interest rate; costs and fees above normal.

• Negative Amortization: Repayment schedules set up so that the monthly payment fails to payoff accrued interest and actually increases the original amount borrowed.

.. Balloon Payments: In this payment structure, the balance due on the mortgage must be paid at the end of the loan, usually is years. At the end of the loan, the balloon payment that is suddenly due will be a large sum of money, probably beyond one's ability to repay, forcing the borrower to borrow more money to pay back the loan.

• High Loan-to-Value (LTV) Loans: Loans that are more than 100 percent LTV may lock the borrower into additional debt.

• Credit Insurance: Lifer accident, and health insurance should not be included as a condition of a loan. It will increase the total amount the borrower owes.

Lending Practice Analysis of Impediments to Fair Housing Choice

• Mandatory Arbitration: Loan contracts requiring mandatory, binding arbitration instead of the court system. Arbitration is more favorable to lenders than to consumers.

• High-Pressure Sales Tactics: Frequent calls and letters asking the borrower to refinance.ll 4.6.2 Examples of Predatory Lending

As defined above, predatory lending includes a wide variety of improper practices. In fact, over 39 different types of predatory lending have been documented. These practices involve all aspects of the lending process, from origination to the collection of the 10anY These practices typically target low-income persons, minorities, or the elderly and steer them to high-rate lenders."

In particular, HUD has raised concern about two categories of improper or predatory lending practices. The first type, which generally is easier to identify, involves blatant fraud or acts of deception such as forging signatures or obtaining signatures on blank documents, falsifying loan applicant income or appraised value of the property, or employing bait and switch tactics.

A second type, which is often more difficult to identify, involves various manipulative practices that cause borrowers to enter into abusive loans. Common abusive loans include:

• Equity Stripping: This type of practice occurs when a loan is based on the equity of a home rather than the borrower's ability to repay. This type of loan often has high fees, prepayment penalties, and different terms and conditions than a regular home loan.

• Packing: This involves the practice of adding credit insurance or other extras onto the loan. The supplements to the loan are often very profitable to the lenders and are typically financed in a single up-front or balloon payment.

• Flipping: This practice is a form of equity stripping and happens when a lender convinces a borrower to repeatedly refinance a loan within a short period of time. The lender typically charges high points and fees each time as part of the mortgage. 14

11 "Don't Borrow Trouble" Federal Home Loan Mortgage Corporation. 2002. 12 Bill Brennan of Atlanta Legal Aid, Testimony before the u.s. Senate Special Committee on Aging, March 16, 1998. 13 Testimony of Assistant Secretary for Housing/Federal Housing Commissioner William Apgar before the House Committee on Banking and Financial Services, May 24, 2000. 14 Dan Tatar, Community Affairs Office of the Federal Reserve Bank of Richmond, "Predatory Lending: The American Nightmare," Marketwise, Winter 2001.

4-20 Lending Practice City of Los Angeles

4.6.3 Protections against Predatory lending

Federal Legislative Changes and Actions

Predatory lending is a growing fair housing issue. However, no law currently administered by the Federal Reserve Board contains a statutory or regulatory definition of predatory lending. Predatory lenders who discriminate receive some scrutiny under the Fair Housing Act of 1968, which requires equal treatment in terms and conditions of housing opportunities and credit regardless of race, religion, color, national origin, family status, or disability. This applies to loan originators as well as the secondary market. The Equal Credit Opportunity Act of 1972 requires equal treatment in loan terms and availability of credit for all of the above protected categories, as well as age/ sex, and marital status. Lenders that engage in predatory lending would violate these acts, if they target Black, Hispanic or elderly households to buy higher priced and unnecessary loan products; treat loans for protected classes differently than those of comparably credit-worthy applicants; or have policies or practices that have a disproportionate effect on the protected classes.

In additlon, the Truth in Lending Act (TILA) promotes the informed use of consumer credit, through disclosure of loan costs and terms. To comply with this act, lenders must disclose information about payment schedules, prepayment penalties, and the total cost of credit. In 1994/ Congress amended the TILA in response to abusive lending practices. The new legislation, referred to as the Home Ownership and Equity Protection Act (HOEPA)rprovides new information to protect borrowers. HOEPAidentifies a specific class of high-cost mortgage loans that may put consumers at risk of losing their homes. HOEPArequires disclosure of information if the annual percentage rate (APR) is ten percentage points above the prime or if fees are above eight percent of the loan amount, HOEPAalso prohibits balloon payments for short-term loans. In addition, for covered loans, HOEPAprovides a warning if the lender has a Hen on the borrower's home and the borrower could lose the home if default on the loan payment,15

Furthermore, HUDt in conjunction with the U.S. Department of Treasury, formed the JOint-Task Force on Predatory Lending in 2000. The Task Force conducted an in-depth investigation of the problem and issued recommendations to Congress regarding improving consumer literacy and disclosure, reforming sales practlces, improving market structure, and restricting abusive terms and conditions.

State of California AB 489 (as amended by AB 344)

California became the second state to pass :a law banning predatory lending in September 2001, following North Carolina's lead. The law enables state regulators and the Attorney General to attempt to prevent "predatory" lending practices by authorizing the state to enforce and levy penalties against licensees that do not comply with the provisions of this blll. The law provides protections against predatory lending to consumers across the state as summarized below:

" Financing of Credit Insurance: On all home loans, the bill prohibits the financing of single premium credit insurance policies as part of a loan. Credit

15 Federal Reserve Governor Edward M. Gramlich, "Predatory Lending" Cascade (Federal Reserve Bank of Philadelphia), Summer/Fall 2000.

Lending Practice 4-21 Analysis of Impediments to Fair Housing Choice

insurance policies on home loans may stHI be sold as long as they are paid off monthly like other insurance.

• Covered loans: The legislation's other protections apply to home loans with very high fees and rates when the total loan amount is $250,000 or below. For borrowers in these higher-cost home loans, the bill extends additional consumer protections against some of the most abusive practices.

• Financing of Points and Fees: The bill prohibits the financing of lender and broker fees beyond six percent of the original loan amount, minus the fees.

• Steering: The bill prohibits borrowers in covered loans from being steered or counseled into loans with rates above what is appropriate for their credit risk, according to the lender's classifications.

• Ability to Repay: The bill prohibits lenders from making a covered loan, knowing that the borrower cannot repay.

• Home Improvement Contracts: The bill prevents home improvement contractors from getting paid directly out of the proceeds of covered loans. The loan proceeds must go directly to the borrower, or otherwise must be paid out to an escrow account or to the borrower and contractor jointly only in increments with written certification that the work has been finished.

• Fiduciary Responsibility of Brokers: The legislation establishes that any mortgage broker providing a covered loan has a responsibility to protect the borrower's financial interests, regardless of any of the broker's other financial relationships (including their status as an agent of the lender), and that any violation of those duties constitutes a violation of the law.

• Loan Flipping: The bill prohibits covered loans where there is no clear benefit to the borrower, taking into account the costs of the loans, but also the borrower's reasons for seeking it.

• Prepayment Penalties: When a prepayment penalty is included in a loan, the borrower must pay a penalty to refinance out of that loan into another loan within a certain time period. In the prime market, prepayment penalties are generally accompanied by a slightly lower interest rate on the loan. But in the subprime market, these penalties are commonly used to trap borrowers at higher interest rates than they should be paying or force them to pay an extra fee to receive a loan with a more reasonable interest rate. The bill sets restrictions on some of the worst abuses - limiting such penalties on covered loans to no longer than three years and requiring the originator to offer a choice of a loan without a prepayment penalty at least three days before closing.

• Balloon Payments: No balloon payments are allowed in the first five years of the loan, as in the federal Home Ownership Equity Protection Act (HOEPA).

• Negative Amortization: The principal amounts of second mortgages may not increase over the course of a covered loan.

• Prepaid Payments: Prepaid installments may not be financed into the loan, resulting in extra interest charges.

4-22 Lending Practice City of Los Angeles

• Call Provisions: Call provrsions, which permit the lender to call in the entire balance of the loan immediately, may not be included in covered loans.

a Interest Rate Changes upon Default: The interest rate may not increase as a result of the borrower defaulting.

.. Encouragement of Default: A lender or broker may not encourage a consumer to default on the consumer's existing home loan when soliciting to refinance the consumer into a new covered loan.

.. Disclosures. Originators of covered loans are required to provide borrowers with one page of disclosures about the availability of loan counseling services and other information about the loan.

'City of los Angeles Anti-Predatory Loan Ordinance, Chapter XVIII

In response to mounting concern over predatory lending practices, the City Council approved the Los Angeles Anti-Predatory Loan Ordinance in November of 2002. If adopted, the ordinance would address the conditions particular to the City and provide broader protection to consumers than the existing State and Federal laws." The ordinance would apply to home loans with an annual percentage rate at least six percent above the comparable yield on Treasury securities, or having total points and fees that exceed four percent of the total loan amount, or $1,500, whichever is greater.17 Specifically, the ordinance would contain a number of measures to curb predatory lending activity, including the following requirements:

" Loans may not be made without the verification of home loan counseling to the borrower.

m There must be reasonable belief in the borrower's ability to repay the loan.

• Lending is not permitted without the disclosure to the borrower of credit sources and appraisals.

• Lenders must promptly report high-cost refinance home loan repayments to credit reporting agencies,

Mayor James K. Hahn signed the Los Angeles Anti-Predatory Loan Ordinance on December 18, 2002. Before the ordinance could become effective, rules and regulations had to be approved and published. A lawsuit filed by the American Financial Services Association (AFSA) held up the implementation of the ordinance. AFSA also filed a lawsuit against a Similar ordinance passed in Oakland, California in 2001.

The California Supreme Court ruled on January 31, 2005, that state law pre-empted Oakland's anti-predatory lending ordinance. The ruling applies to other cities, thereby blocking Los Angeles from implementing its ordinance and preventing other cities from adopting similar laws. Both the Oakland and Los Angeles ordinances, adopted in 2001

16 "Los Angeles Unanimously PassesAnti-Predatory Lending Ordinance," ACORNPress Release. November 22, 2002. 17 "Industry Pressures City to Relax Subprime Lending Law," Los Angeles Business Journal. November 10, 2003.

lending Practice 4-23 Analysis of Impediments to Fair Housing Choice and 2002, respectively, provided greater protections against predatory loans than state law and would have required sub-prime home loan applicants to get counseling before signing loan documents.

4.7 Purchased Loans

Secondary marketing is the term used for pncmq, buying, selling; securitizing and trading residential mortgages. The secondary market is an informal process of different financial institutions buying and selling home mortgages. The secondary market exists to provide a venue for lending institutions to raise the capital required to make additional loans. In the 19605, many regions, induding California, had more demand for mortgage credit than the lenders could fund as interest rates became unstable, housing starts declined, and the nation faced capital shortages.

The need for new sources of capital prompted Congress to reorganize the Federal National Mortgage Association (FNMA) into two entities: a private corporation (today's FNMA) and a government agency, the Government National Mortgage Association (GNMA). In 1970, Congress chartered the Federal Home Loan Mortgage Corporation (FHLMC) to purchase conventional loans. Both FHLMC and FNMA have the same goals: to increase the liquidity of the mortgage market and make homeownership more widely available to the average citizen. The two organizations work to standardize the documentation, underwriting, and financing of home loans nationwide. They purchased loans from originators, hold them, and issue their own debt to replenish their cash. They are, essentially, very large, massive savings and loan organizations. These two organizations set the standards for the purchase of home loans by private lenders in the U.S. 4.7.1 Fair Housing Concerns

In recent years, the practice of selling mortgage loans by the originators (lenders that initially provided the loans to the borrowers) to other lenders is prevalent. Allegations have been made that predatory lending is more likely to occur with thts practice. When a lender can minimize its financial risk with a loan by immediately selling the loan to another lender, it may be more willing to loan to applicants who cannot truly afford the mortgage.

Table 4-12 shows the loans purchased by jurisdiction and racejethnicity of applicant. Citywide, approximately 26 percent of originated loans were purchased. Within the

NSAst the percentage of loans purchased ranged from 17.6 percent in South Los Angeles to nearly 43 percent in the North Valley area. Among racial groups, Blacks had the highest percentage of loans purchased, with 17.1 percent, followed closely by Hispanics with 16.9 percent. Native Americans experienced the least amount of loans purchased by secondary lenders at 6.7 percent. However, Native Americans also constituted only a small portion of the borrowers.

4-24 Lending Practice City of Los Angeles

North Valley 10,107 4,340 42.9% 13.9% 16.7% 23.2% 18.1% 17.5% South Valley 20,029 5,185 25.9% 0.0% 15.6% 14.4% 15.4% 15.9% West Los Angeles 10,280 2,461 23.9%, 8.3% 13.5% 15.0% 10.4% 11.9% Central 7,383 1,838 24.9% 14.3% 14.1% 12.8% 16.4% 14.5% East Los Angeles 6,066 1,434 23.6% 0.0% 18.9% 18.7% 18.1% 17.5% South Los Angeles 10,548 1,856 17.6% 6.7% 16.1% 17.1% 15.3% 14.8% Harbor 3409 773 22.7% 0.0% 18.7% 17.4% 22.1% 12.5% Total 67,822 17,887 26.4% 6.7% 15.9% 17.1% 16.9% 15.1 "I" Note: 1. The total percentage of loans purchased is higher in all cases than for the individual racial/ethnic groups becausejoint applications and borrowers who declined to state their race/ethnicity are not included in this table.

Source: Home Mortgage Disclosure Act (HMDA), 2002.

4.8 Foreclosures and Housing Frauds

While government-backed financing represents an important alternative source of financing to low- and moderate-income households, it is also a market where many borrowers have been abused. The high default rate of FHA loans in the seven Southern California counties -- 50 percent higher than the national rate - prompted HUD to launch a Housing Fraud Initiative.

In 1998, HUD began an initiative to address fraud in programs administered by the federal agency. The "Housing Fraud Initiative" investigation involved the Federal Bureau of Investigation, Internal Revenue Service and U.S. Attorney's Office, and uncovered over $110 million in fraud involving three types of schemes:

• Originating fraudulent loans that allowed unqualified borrowers to obtain mortgages insured by the Federal Housing Administration

It A scam in which rea! estate professionals obtain mortgages in the names of fictitious borrowers

D Cases of equity skimming, in which an owner sells a property to a so-called "straw buyer" at an inflated price. The straw buyer then defaults, but the seller has already profited

No specific data are available to measure the extent of housing fraud in the City of Los Angeles. However, foreclosure data is available through the County Recorder's Office. From January to June in 2004, the City had 697 Notices of Default (NODs). The large number of foreclosures may indicate that some homebuyers are sold loans that they cannot truly afford.

lending Practice 4-25 Public Policies

Public policies may affect the pattern of housing development, the availability of housing choices, and access to housing. This chapter reviews the various policies that may impact housing choices in Los Angeles. Policy and planning documents adopted by the City and associated aqencies' were reviewed to evaluate the following potential impediments to fair housing choice and affordable housing development, including those related to:

• Local municipal, building, occupancy, health, and safety codes; • Public policies and building approvals that add to the cost of housing; • Residential development fees; • Administrative policies affecting housing activities; • Policies that restrict housing or community development resources for areas of minority concentration, or pollcles that inhibit employment of minorities or individuals with disabilities; • Interdepartmental coordination between local agencies that provide housing or community development resources to areas of minority concentration or to indiViduals with disabilities; and • Community representation on planning and municipal boards and commissions.

5.1 Local Plans and Codes

Higher density housing reduces land cost on a per-unit basis and can facilitate the development of affordable housing. Restrictive municipal codes that require unusually large lot or building sizes can substantially increase housing costs and can impede housing production. The City directs the amount and type of residential development that occurs through a hierarchy of planning and regulatory documents.

5.1.1 General Plan

The Los Angeles General Plan is at the top of the hierarchy of land use plans affecting the location and development of housing. The General Plan provides a general framework for land use policies and declsion-maklnq. Land uses under the General Plan are governed by community plans. The City of Los Angeles is divided into 35 community planning areas, plus the Port of Los Angeles and Los Angeles World Airport. The community planning areas are listed Table 5-1 and shown in Figure 5-1.

Associated agencies are independent legal entities create by the City of Los Angeles such as the Housing Authority of the City of Los Angeles, the Los Angeles Community Redevelopment Agency, and the joint Los Angeles City-County Homeless Services Authority.

Community Outreach Analysis of Impediments to Fair Housing Choice

• Arleta - Pacoima Northridge • Chatsworth - Porter Ranch • Sunland - Tujunga - Lakeview Terrace - Shadow Hills - East La Tuna Can on ~ Granada Hills - Knollwood • Sun Valley - La Tuna Canyon • Mission Hills - Panorama City - North Hills • Sylmar South Valley Subregion .. Canoga Park - Winnetka - Woodland Hills - • Reseda - West Van Nuys West Hills • Encino - Tarzana • Sherman Oaks - Studio City - Toluca Lake - Cahuenga Pass • North Hollywood - Valley Village • Van Nuys - North Sherman Oaks West Los Angeles Subregion .. Bel Air - Beverly Crest • Venice .. Brentwood - Pacific Palisades .. Westchester - Playa Del Rey • Los Angeles World Airport • West Los Angeles • Palms - Mar Vista - Del Rey • Westwood Central Subregion .. Central City • Westlake .. Centra I City North • Wilshire .. Hollywood

Port of Los Angeles • Wilmington - Harbor City

5-2 Public Policies ANGeLeS NA TIONAL FOReST

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Community Plan Areas

D Cities/Unincorporated Areas - • - County Boundary

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CITY of lOSANGfLES Community Plan Areas Analvsis of Impediments 10 fair Housing Choice Analysis of Impediments to Fair Housing Choice

General Plan Land Use Element

The Los Angeles General Plan Land Use Element sets forth the City's policies for guiding local development. These policies, and their implementation through the City's Zoning Ordinance, establish the amount and distribution of land to be allocated for various uses throughout the City.

Table 5-2 lists General Plan land use categories (both residential and non-residential categories) that permit housing. Also listed are the corresponding zoning and residential density ranges. As shown, the City of Los Angeles permits a wide range of housing types and densities in virtually every community plan area. The City's General Plan, as expressed through land use policies for each of the community plans, does not represent a potential impediment to providing equal housing opportunity.

Table 5-2: General Plan Land Use Categories Residential General Plan Land Use Category I Equivalent Zoning' I Density Minimum A1, A2, RE 40, as 0.4 - 1 Very Low RE 20, RA, RE 15, RE 11 2.0 - 3 Very Low I RE 20, RA 2 Very Low II RE 14, RE 11 2 - 3 Low RE 9, RS, R1, RD 6, RD 5, RU 4 - 12 RD 3, RD 4, RZ 2.5, RZ 3, RZ 4, Low Medium I RD 10 - 17 RU Low Medium II RW 1, RD 1.5, RD 2 18 - 29 Medium R3 30 - 55 High Medium R4 56 - 108 High R5, R5 108 - 216 Neighborhood District C1, C1.5, C4, C2 30 - 108 Community Center CR,C4,C2 30 - 108 Regional Center CR, C1.5, C4, C2 30 - 108 General Commercial C2,C2 30 - 108 Boulevard-Mixed Use CR, ci, C1.5, C2, C4, C2 30 - 108 Industrial-Light CM, MR 1, MR 2, M1, M2 108 - 216* Industrial-Heavy M3 * Industrial-Transit CM, M1, M2, C2 40 - 216* *Only watchman and caretaker residencesare permitted 10 the MR-l, MR-2, and M-l zones. Housing is not permitted in the M-3 zone. Sources; City of Los Angeles Department of City Planning website at www.laclty,orq/pln/cornplan; City of Los Angeles Housing Element; Cotton/Bridges/Associates.

Each community planning area has its own land use plan that specifies the acreages of permitted land uses. Residential land use categories vary from Minimum (which corresponds with zoning categories of open space, agricultural, and residential estate at one dwelling unit per acre or less) to High (which corresponds with zoning category R-5 at densities as high as approximately 108 to 216 dwelling units per acre).

Community plans also provide for commercial land use categories. These categories include Neighborhood, General, Community Regional, Highway, and Limited. The

5-4 Public Policies City of Los Angeles

commercial land use categories correspond with one or more of seven commercial zones that permit residential development according to either R-3 or R-4 zoning standards.

Finally, one community plan land use category, light Industrial, which corresponds with the zoning district light Industrial, permits general purpose housing (in contrast to caretaker dwellings only, for example) at densities and development standards comparable to R-S zoning (108 to 217 dwelling units per acre).

General Plan Housing Element

The Housing Element of the General Plan, a state-mandated and state-reviewed document, is the City's comprehensive statement of housing needs and strategies to address those needs. The Housing Element must include an analysis of impediments (constraints) to housing and include policies and programs that address equal housing opportunity. An important component of state review is a determination that a local jurisdiction's policies do not unduly constrain the maintenance, improvement, and development of housing for all income levels.

Adopted in 2002, the Los Angeles Housing Element contains the following goals and objectives:

Goal!: A City where housing production and preservation result in an adequate supply of ownership and rental housing affordable to people of all income levels, races, ages, and suitable for all needs.

Objectives

1.1 Encourage production and preservation of an adequate supply of rental and ownership housing to meet the identified needs of persons of all income levels and special needs.j

1.2 Provide and maintain the technical resources to evaluate the availability of the housing supply in relation to identified needs.

1.3 Encourage the provision of housing with support services for persons with special needs (e.g., homeless, mental or physical disability, elderly, large families, and persons living with HIVjAIDs).

Goal 2: A City which actively takes steps to preserve, stabilize, and enhance livability /sustainability in all neighborhoods throughout the City, and maintains the quality of life in all residential areas.

Objectives

2.1 Promote housing strategies which enhance neighborhood safety and sustainability, and provide for adequate population, development, and infrastructure and service capacities within the City and each community plan area, or other pertinent service area.

2 The California Housing Element law defines "special needs households" to include: large households (five or more members); elderly households; female-headed households, particularly those with Children; and households with persons with disabilities.

Public Policies 5-5 Analysis of Impediments to Fair Housing Choice

2.2 Maintain and upgrade existing housing stock to meet Health and safety code requirements through enforcement of existing laws, rather than demolition when feasible,

2,3 Encourage the location of housing, jobs, and services in mutual proximity. Accommodate a diversity of uses that support the needs of the City's existing and future residents.

2.4 Develop, preserve, and enhance quality single- and multiple-family housing utilizing approved design standards which maintain the prevailing scale and character of the City's stable residential neighborhoods, and do not constrain affordable housing development.

2.5 Encourageequitable distribution of affordable housing throughout the City,

2,6 Educate the public on lower income and special housing needs.

2.7 Advocate for multifamily property management training for public and private multifamily housing,

2.8 Assure that new development is generally consistent with the character and scale of adjacent development and an adopted community vision.

Goal 3: A City where there are equal housing opportunities for all without discrimination.

Objective

3.1 Encouragethe provision of citywide housing opportunities for people of all ethnic, age, special needs, and income groups to reduce discriminatory practices in housing.

Goal 4:· A City that provides incentives and reduces constraints for the production and preservation of all housing.

Objectives

4.1 Establish additional production incentives for developers of affordable lower- Income, special needs, and market-rate housing.

4.2 Remove identified constraints on housing production and preservation.

Compliance with State Housing Element Law

The California Department of Housing and Community Development (HCD) has found the 2002 Los Angeles Housing Element in compliance with state law. This compliance status affirms that the City has evaluated its public policies as potential constraints to the maintenance, improvement, and development of housing and has adequately addressed all potential constraints through housing policles and programs.

5-6 Public Policies City of Los Angeles

Housing Programs Promoting Fair Housing Choice

Los Angeles has adopted a number of programs in its Housing Element to promote fair housing choice. The programs either:

• Directly further the City's fair housing goals and objectives; • Expand or preserve housing for special needs groups that often face housing discrimination; • Provide replacement housing for individuals or groups disproportionately affected by public and private redevelopment activities; and/or • Target neighborhoods or housing units that are disproportionately affected by unsafe or illegal housing management practices.

Every housing program contained in the Housing Element has some impact directly or indirectly on expanding housing choice for all, either by increasing the supply of housing or the types of housing being built, making housing more affordable, or improving the quality of housing. Only programs that specifically address the objectives listed above are Identified here (refer to the Housing Element for detailed description of these programs).

Promote Fair Housing Goals and Objectives

Provision of fair housing services directly furthers fair housing goals and objectives in the City. Fair housing research that is conducted periodically can help the City in crafting the services to respond to nature and extent of housing discrimination in the City.

P~40. Citywide Fair Housing Services: The City seeks to affirmatively further fair housing through the delivery of public education counseling, and housing discrimination complaint resolution services. Proactive testing is conducted to determine patterns and practices of discrimination in the City.

P-41. Fair Housing Research: Conduct studies to evaluate the level of housing discrimination in the Los Angeles area. Studies will be conducted to evaluate the extent of discrimination based on race, color, familial status, religion, gender, marital status, mental or physical disability, age, sexual orientation, student status, or income source. Various aspects of the LosAngeles housing market will be evaluated, from rental housing to lending practices. Additional studies will evaluate whether transportation, employment locations, and other issues areas reinforce segregation.

P-81. Antidiscrimination Legislation: Continue to incorporate an antidiscrimination clause in the subdivision map approval and expand the clause to other project approval processes.

Expand or Preserve Housing for Special Needs Groups

Many barriers exist in providing affordable and suitable housing for persons with special needs (e.g. elderly, large families, and persons with disabilities). Such barriers include, but are not limited to, a lengthy development review process, limited land available for development, and regulatory constraints (e.g. building and zoning codes). Programs aimed at reducing the impacts of these constraints, such as the ones listed below, will help increase or preserve housing for persons with special needs.

Public Policies 5-7 Analysis of Impediments to Fair Housing Choice

P-4. Affordable Housing Building Permit Expeditor: Continue the existing expeditor program and expand the definition of affordable housing to include any housing developments which include units with affordabllity restrictions of any kind and which serve low income and special needs populations, such as short-term housing and supportive housing.

P-20. Family Housing Expansion: Utilize funds to expand the size of existing units to accommodate eXisting larger tenant families and extended families.

P-24. Evaluate Potential Sites on City-Owned Land for Residential Use: Analyze existing inventory of city owned land. Identify properties that can potentially be used for residential development. Work with City Council offices to transfer property for affordable housing and short term and permanent special needs housing use.

P-67.Promote the Production of Large Housing Units by Changing the Density Calculation Methodology:Initiate the pursuit of the minimum lot area per dwelling unit required on a parcel in residential zones, to be developed with a multiple-family project that is not tied to the number of habitable rooms. In the past, this method of calculated permitted residential density has favored the production of smaller units.

P-78. Amend the Building and Zoning Codesfor Non-Conventional Housing: Report on the feasibility of amending the building and zoning codes to allow innovative multiple-family housing types, possibly incorporating concepts such as shared housing, larger units, and group quarters, with parking standards reductions and incorporation of open space requirements for units serving large families with Children.

P-84. AIDS Residential Facilities Program: Provide funds for acqulsltlon, new construction and renovation of existing facilities to establish residential facilities and increased public services to low and moderate income City residents that test HIV positive.

P-89. Congregate Housing: Provide technical assistance whenever possible to fund gap financing for organizations that provide a variety of congregate types for special needs populations, including cooperatives and "co-housing" and living units with common facilities. This program is designed to enable elderly persons in federally assisted housing to live independently by retrofitting physical facilities and providing supportive services and service coordination.

P-92. City GUidelinesand Monitoring for Accessibility: New state accessibility regulations have been modified to agree with Federal Americans with Disabilities Act (ADA) standards. There are guide books available for Title 24 commercial and residential regulations, and the Department of Building and Safety produces some guide books for developers on the requirements of state and federal accessibility standards. The Department of Building and Safety will develop a program to record and report on newly created adapted and adaptable units in the private and nonprofit sectors.

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Provide Replacement Housing for Individuals or Groups Disproportionately Affected by Public and Private Redevelopment Activities

A disproportionate number of minority households are low and moderate incomes and living in older neighborhoods of the City. Therefore, minority households may be more likely than other households to be displaced due to redevelopment activities.

P-22. Citywide Replacement Policy: LAHD will develop a citywide affordable housing replacement policy by reviewing the existing replacement requirements and studying the Impact and effectiveness of replacement requirements.

P-38. Central City West Specific Plan Replacement and Linkage Housing Program: Adopted in 1990, this Plan Includes coverage of housing that was demolished in the Central City West area beginning in 1984. Certificates of Occupancy for new commercial and industrial projects cannot be obtained until certificates of occupancy are obtained for the replacement housing. A housing linkage fee per square foot is also required.

Target Neighborhoods or Housing Units that are Disproportionately Affected by Unsafe or Illegal Housing Management Practices

A disproportionate number of minority households are low and moderate incomes and living in older neighborhoods of the City, where unsafe or illegal housing management practices are more prevalent. As discussed in Chapter 3, Community Profile, minority households are disproportionately affected by lead-based paint hazards. Slumlord practices and related habitability issues also tend to impact minority households more than the general public.

P-6. Neighborhood Recovery Program (NRP): Some of the City's neighborhoods are deteriorating rapidly due to the interaction of poverty, overcrowding, poor housing management, high rates of absentee ownership, inadequate services, drugs, crime, and gangs. The Neighborhood Recovery Program works with community leaders to identify the neighborhoods in need of programs and marshals the forces of many City departments to provide neighborhood services. These services include policing, infrastructure improvements, social services, employment programs, rehabilitation loans, and homeownership programs.

P-l0. Lead-Based Paint Hazard Reduction Information: Provide information on lead-based paint hazards to all applicants for City housing rehabifitation loans. Incorporate information about contractor and inspector certification and abatement standards into the materials provided to clients of rehabilitation programs.

P-l1. HUD Lead-Hazard Reduction Grant: Fund lead-based paint hazard control of units occupied by low and moderate income families with minor children, train and certify lead-abatement workers and contractors, and conduct an outreach program to property owners and renters on lead-based paint hazards.

P-14. Receivership Program for Slum Buildings: The Receivership Program is a pilot program to test the feasibility for the City to use court appointed receivers to address buildings with the following existing conditions:

• Existence of multiple citation; • Responsiveness(or existence of the building's owners or manager);

Public Policies 5-9 Analysis of Impediments to Fair Housing Choice

II Conditions which warrant immediate action to protect public health and safety; • Impact of the building to the surrounding neighborhood;

II Financial feasibility of making the repairs and recouping the costs; and .. Impact to existing residents.

P-15. Citywide Nuisance Abatement Program (CNAP): This program is a multi- agency effort to revitalize neighborhoods throughout the City by encouraging voluntary abatement of nuisance through a cooperative approach involving property owners, police officers, city prosecutors, housing personnel, and regulatory inspectors. Personnel from the City Attorney's Office, LAPD, LAHD, and the Department of Building and Safety form the Problem Property Resolution Team (PPRT). The PPRT team has the responsibility to implement CNAP. PPRT abates nuisance locations, such as vacant and/or substandard properties and narcotic locations, through boarding and securing, dernolltlon, renovation, enforcement, owner notification, hearings, and/or criminal or civil court actions.

P-3S. Habitability Enforcement Program (HEP): The Habitability Enforcement Program (HEP) allows tenants of rent stabilized units or an enforcement agency to initiate a complaint with the Los Angeles Housing Department for rent reduction when certain habitability violations are found to exist in their units. Applicable violations also include a reduction or elimination of the following services: elevators, security gates, and air conditions if contracted by the tenant, or if provided to the tenant at the time of move in.

P-90. Slumlord Task Force: The City Attorney's Office works with the County Department of Health Services, and the City's Building and Safety and Fire Departments to target slum properties for inspection and potential criminal prosecution.

5.1.2 Consolidated Plan

As a recipient of federal housing and community development grant funds, the City of Los Angeles is required to adopt a Consolidated Plan that identifies and prioritizes housing and community development needs, analyzes barriers to affordable housing, and contains a Strategic Plan to address community needs and remove affordable housing barriers. The current Consolidated Plan, adopted in 2003, covers the five-year period between 2003 and 2008.

The Consolidated Plan also directs the City's expenditure of funds under several programs operated by the federal Department of Housing and Urban Development (HUD). These programs are:

• Community Development Block Grant (CDBG) • Home Investment Partnership Act (HOME)

51 Housing Opportunities for Persons with AIDS (HOPWA)

II Emergency Shelter Grant (ESG)

Programs operated by HUD provide the largest source of funding for the City in provision of needed public services, housing, economic development, neighborhood improvements, and other critical program needs. The City files an annual Action Plan with HUD1 which provides information on the activities that the City will undertake through the four federal grant programs covered in the Consolidated Plan.

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The Strategic Plan portion of the Consolidated Plan shows the relationship between housing and community development needs, thereby integrating the use of HUD funds. The Strategic Plan also identifies activities or programs that expand economic opportunities through entrepreneurial and employment programs that focus on the creation of jobs. SpecificaJly,the Strategic Plan identifies:

• Priorities for allocating Consolidated Plan funds geographically, and among priority needs within the City; • The basis for assigning funding priorities given to each category of priority need; • Obstacles to meeting underserved needs; • How funds expected to be available will be used to address identified needs; and • Proposed accomplishments the City hopes to achieve in quantitative terms over the next five years.

The Consolidated Plan contains several policies and programs to further fair housing choice. These policies and programs are essentially the same as those contained in the City's Housing Element and described previously. 5.1.3 Specific Plans

Community plan land uses, and the corresponding zoning, may be altered through the preparation of specific plans, as provided under California law. Specific plans may contain development standards that deviate from the City's zoning code standards. Los Angeles has adopted 38 specific plans, covering both new growth areas and developed communities.

While several specific plans include incentives or requirements for affordable housing, most do not specify the inclusion of affordable housing. Affordable housing is achieved in some high-rise projects on Wilshire Corridor within the Westwood and North Westwood Village Specific Plan areas have used density bonus options and are required to include affordable units in the developments. Four housing projects have been developed and approved in the Porter Ranch Specific plan area, including a 312-unit affordable senior housing project. A single-family condominium project and two townhome/apartment projects offer additional affordable units in the area. 5.1.4 Redevelopment Project Area Plans

The Los Angeles Community Redevelopment Agency (CRA) was established in 1948. Redevelopment is used by the City as a tool to remove blighted conditions, provide economic opportunities, create housing for lower and moderate income residents, renovate or replace deteriorated or dilapidated structures, develop vacant infill and under-used properties, and provide public infrastructure and other improvements to support private investment in deteriorated areas of Los Angeles. Redevelopment can provide a means for increasing housing choices for low and moderate income residents and those with special needs.

Redevelopment activities are funded from property tax "increment" revenues, the difference between property taxes collected during the year at which the redevelopment project area is established and annual property tax collections during the life of the redevelopment project area. California law requires that at least 20 percent of tax increment funds generated within a redevelopment project area be used for maintaining and expanding the supply of housing for low- and moderate-income households (30

Public Policies 5 -11 Analysis of Impediments to Fair Housing Choice percent in redevelopment project areas whose timelines have been extended beyond their original terms).

Since 1948, the City has created 37 redevelopment project areas, covering over 21,000 acres (about seven percent of the City's land area). Table 5-3 lists the City's redevelopment project areas. The CRA also operates citywide programs to provide disaster assistance and develop "brownfield sites" (former commercial or industrial properties containing hazardous materials).

The earliest redevelopment project areas, established in the 1950s and 1960s, emphasized clearance of blighted areas and focused on the central city and major corridors leading to the central city. Since the 1970s, the CRA'sefforts have focused on neighborhood preservation and improvement, with an emphasis on residential and commercial rehabilitation and infill development serving local neighborhoods. This shift in emphasis attempted to address local needs in all blighted areas of the City.

In the early 1990s, the City created eight new redevelopment project areas. The CRA also expanded an existing project area in South-Central Los Angeles to address years of underlying distress in this part of the City, epitomized by limited access by residents to fundamental consumer and public services or to local employment opportunities.

In 1994, the CRA addressed extensive damage caused by the 1994 Northridge Earthquake by establishing four new project areas in Pacoima/Panorama City, Reseda/CanogaPark, Laurel Canyon, and East Hollywood.

Ta ble 5-3: Redeve opment Project Areas • Adarns-Normandle (inactive) R Lincoln Heights 1 • Adelante Eastside • Little Tokio • Beacon Street .. Mid City Corridors • Boyle Heights 1 and 2 • Monterey Hills • Broadway/Manchester • Normandie 5 • Bunker Hill D North Hollywood • Central Business District • Pacific Corridor • Central Industrial • Pacoima/Panorama City • Chinatown • Pico Union 1 and 2 • City Center • Reseda/Canoga Park • Council District 9 • Rodeo/La Cienega • Crenshaw • Vermont/Manchester • Crenhshaw/Slauson D Watts • East Hollywood • Watts Corridor • Hollywood • Western Slauson • Hoover • Westlake • LA Harbor/Wilmington • Wilshire/Koreatown • Laurel Canyon

Since the mid-1980s, eRA has committed between 40 to 50 percent of its resources to providing affordable housing for low and moderate income residents, well above the minimum requirements of state law. The eRA also established several citywide housing programs to ensure that the benefits of redevelopment assist low and moderate income residents throughout Los Angeles.

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5.1.5 Zoning

Capacity to Accommodate Additional Housing

Each of the land use designations set forth in the City's General Plan corresponds to one or more of the zoning districts established in the Zoning Code. The density requirements specified in the Zoning Code adhere to the General Plan Land Use Element. The City's zoning districts allow for a variety of housing types and densities, from agricultural residential at less than one dwelling unit per acre to high density at over 200 dwelling units per acre.

Table 5-4 summarizes the adjusted remaining dwelling unit development potential reported by the City in 1994. Between January 1, 1994 and January 1, 2004, 33,190 additional dwelling units were constructed in Los Angeles, at least 14,191 units through low density residential land use categories, 15,123 units in the low to medium density categories, and 3,876 units in the medium to high cateqortes." The amount of housing construction over the past ten years represented about six percent of the City's remaining residential development capacity as of 1994. Over 40 percent of the City's remaining housing development potential is in zoning categorles that permit densities greater than 54 dwelling units per acre, while an additional 47 percent is in zoning districts permitting multi-family residential densities between 8 and 28 dwelling units per acre. Single-family residential land at densities of less than eight units per acre adds another 10 percent to the City's sites inventory. With a few exceptions, each of the subregions has residential development potential for all housing types (low through high density).

Despite the apparent capacity of the City to accommodate additional housing for all income and special needs groups, a study prepared in 2000 concludes that most of the available development capacity is in small parcels that would be difficult to assemble for feasible residential projects and that differences in building code requirements for commercial and resldentlal development could impede mixed-use projects in commercial areas."

3 California Department of Finance, E-5 report. Assumes an approximate correspondence between housing types (for example, single-family detached) and a density range typically associated with that housing type. 4 "In Short Supply: Recommendationsof the Housing Crisis Task Force," May 2000, page 10.

Public Policies 5-13 Analysis of Impediments to Fair Housing Choice

NELA 3,595 o 31,977 o 31,977 35,572 South LA 3,321 o 3,321 63,133 o 63,133 66,453 Metro Center 23,160 4,398 27,558 29,887 4,678 34,565 62,123 SW LA 1,463 15,130 16,593 19,979 o 19,979 36,571 Central 1,789 30,374 32,163 105 1,431 1,536 SW Valley 1,711 o 1,711 23,389 2,938 26,327 28,038 NE Valley 2,563 4,244 6,806 16,563 36,186 42,992 NW Valley 30,115 9,776 39,891 16,521 2,440 18,960 58,851 SE Valley 17,907 23,119 41,025 7,446 11,604 19,050 60,075 West LA 2,223 25,531 27,754 2,905 15,616 18,521 46,275 Harbor 7,502 15,365 22,867 36,461 529 36,990 59,857 TOTAL 95,346 127,937 223,283 251A25 55,798 307,223 530,506 % 18.0% 24.1% 42.1% 47.4% 10.5% 57.9% 100.0% dulac '" dwelling units per acre

1. Assuming that the adjustment factor is 30% in Commercial Zones and 80% in Residential Zones. 2. Corresponds to "Very Low Income", "Low Income", and "Moderate Income" housing. 3. Corresponds to the "Above Moderate Income" housing.

Source: Los Angeles City Planning Department, December 1994.

Definition of Family

Local governments may restrict access to housing for households failing to qualify as a "family" by the definition specified in the zoning ordinance. Even if the code provides a broad definition, deciding what constitutes a "family" should be avoided to prevent confusion or give the impression of restrictiveness. Furthermore, Landlords or property owners may refuse to rent or sell units to households not meeting the definition of family.

The City's Zoning Code defines "family" in a potentially restrictive manner that could limit the number of unrelated indiViduals from sharing housing. The City's Zoning Code defines a "family" as:

An individual or two or more persons related by bfood or marriage, or a group of not more than 5 persons (excluding servants) who need not be related by blood or marriage, living together in a dwelling unit, except that there may be up to 4 foster Children, 16 years of age or under, where the total number of persons living in a dwelling unit. does not exceed 8 and providing the keeping of the foster chifdren is licensed by the State of California as a ful/time foster care home.

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California court cases? have ruled that an ordinance that defines a "family" as (a) an individual, (b) two or more persons related by blood, marriage or adoption, or (c) a group of not more than a certain number of unrelated persons as a single housekeeping unit, is invalid. These cases have explained that defining a family in a manner that distinguishes between blood-related and non-blood related individuals does not serve any legitimate or useful objective or purpose recognized under the zoning and land planning powers of the City, and therefore violates rights of privacy under the California Constitution. A zoning ordinance also cannot regulate residency by discrimination between biologically related and unrelated persons.

In general, the City's definition of "family" has the potential to discriminate non- traditional families such as gay and lesbian couples, or certain cultures that prefer living with extended family members and friends. Specific impediments to housing for persons with disabilities presented by this definition are discussed in Section 5.1.6.

Alternative Housing Types that Can Expand Housing Choice

The Los Angeles Zoning Code defines several alternative housing types that increase housing choices for special needs groups and lower-income residents of Los Angeles.

Secondary (Accessory) Living Units: Under the requirements of state law, the City is required to permit second units in all residential zones that allow single-family homes according to an administrative permit process. The City permits secondary dwelling units In single-family zones by right provided certain conditions are made. The required conditions vary by zone but relate primarily to minimum lot size and Jot width, kitchen facility, adjacent land use, and height limit.

Factory-Built Homes, Mobilehomes, and Mobilehome Parks: State law requires factory built homes and mobilehomes complying with the federal Manufactured Housing Construction and Safety Standards Act of 1974 and that are installed on a permanent foundation be permitted on any parcel on which the City allows conventional single- family homes that are built on site and under the same development standards as the "site-built" homes. Mobilehome parks are permitted in the City's Residential Mobilehome Park district.

Shelter for the Homeless: The City permits homeless shelters in R-4, R-5, and C-2 through CM zones. The Housing Element indicates significant development capacity in these zones to accommodate residential uses and facilities, including homeless shelters, although most sites with development capacity are either small, vacant sites that are difficult to develop, or underused sites that require redevelopment.

Boarding or Rooming Houses: The City permits boarding and rooming houses in R-3 through R-5 zones and in all commercial zones. These provisions of the City's Zoning Code greatly expand housing opportunities for indiViduals who cannot afford, or who may prefer the benefits of, a boarding or rooming home over a conventional dwelling unit.

5 City of Santa Barbara v, Adamson (1980) and City of Chula Vista v. Pagard (1981), among others.

Public Policies 5-15 Analysis of Impediments to Fair Housing Choice

Historic Preservation

Section 12.20.03 of the Los Angeles Municipal Code establishes a historic preservation overlay zone. The purpose of the overlay zone is to preserve and enhance sites, structures, and areas with historic, architectural, cultural, or aesthetic significance. Development activities within each historic preservation overlay zone are subject to review by a five-member Historic Preservation Board (a separate board is established for each zone).

Projects subject to review by the Board include: 1) any activities affecting a designated structure or site that would alter its outward appearance, and 2) new construction within a historic preservation zone to ensure compatibility with designated structures and sites.

The City has created seven historic preservation overlay zones (HPOZ):

• Angeleno Heights .. Highland Park .. Melrose Hill .. Miracle Mile North .. South Carthay .. Spaulding Square • Whitley Heights

The City's historic preservation requirements have the potential to affect housing availability and choice to the extent that otherwise permitted residential construction or modifications may not be allowed if they adversely affect historic resources, or may be permitted only with significant changes affecting housing affordability. The City attempts to balance the need to expand housing choice with the importance of historic preservation by focusing on building design or modifications affecting the exterior and outward appearance of structures.

Parking Requirements

The City requires at least two parking spaces on the same lot for each single-family dwelling unit, except on non-conforming lots 40 feet or less in width. Only one parking space is required for such lots.

For other dwelling units, the City's minimum parking requirements are:

• One parking space for each dwelling unit of less than three habitable rooms

II 11f2 parking spaces for each dwelling unit of three habitable rooms

II Two parking spaces for each dwelling unit of more than three habitable rooms .. One to 1% parking spaces per dwelling unit in the Central City area, depending on the number of dwelling units and habitable rooms on a lot

In single-family zones, the City requires that parking spaces be provided within private garages. In an R-2 Zone, at least one of the required parking spaces must be in a private garage. Parking spaces for housing in multi-family and nonresidential zones need not be enclosed.

Although the Zoning Code does not contain guest parking requirements, guest parking is typically added as a standard condition to subdivisions (condominiums) at the rate of 112

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space per dwelling unit in identified parking congestion areas. In all other parts of the City, parking requirement is based on the number of habitable rooms.

Housing projects for seniors and persons with disabilities may be reduced to as little as 40 percent of the parking otherwise required, although the project must contain open space sufficient to accommodate the parking that would otherwise have been required in the event a project converts to non-senior/disabled housing in the future.

For large residential care facilities, homeless shelters, convalescent hospitals, etc., one parking space per 500 square feet of building space is required. Parking for homeless shelters may be reduced by 25 percent, plus two spaces, if located more than 1,000 feet from a public transit stop, or by 25 percent with a minimum of two spaces for shelters located within 1,000 feet of a public transit stop.

The City's parking requirements, and the flexibility permitted in the Zoning Code to reduce parking or meet parking requirements through several options, do not create discriminatory outcomes based on the characteristics of occupants of a dwelling unit or residential facility. Parking standards are reasonable in light of urban parking needs and do make tnfeaslble the construction of housing or residential facilities for lower-income or special needs groups.

Affordable Housing Initiatives

Housing Trust Fund

The City established a Housing Trust Fund in July 2000. Recognizing that Los Angeles' housing crisis poses significant challenges to the City's economy, transportation infrastructure, education system, health care delivery, and basic quality of life, then Mayor Hahn pledged $100 million to the City's Housing Trust Fund. In February 2003, the City Council approved a set of recommendations by the Housing Trust Fund Advisory Committee to guide the use of the Trust Fund:

• 60 percent for multi-family rental projects serving households at or below 60 percent of the Area Median Income • 20 percent for projects that create homeownership opportunities for households at or below 120 percent of Median Income • 5 percent for emergency rental assistance • 10 percent to remain flextble with the priority toward preservation of housing that is at risk of converting to market-rate housing • 5 percent for administration costs

Affordable Housing Incentives Ordinance

The City's Affordable Housing Incentives Ordinance (AHIO) is the primary zoning code vehicle to assist in the production of affordable housing and housing for special needs groups. The City provides three types of incentives:

• Density Increase: The AHIO creates a procedure that allows density increases for projects requesting the statute mandated 25 percent density bonus to apply directly for a building permit unless a discretionary permit or action is required, and 35 percent in transit areas.

Public Policies 5-17 Analysis of Impediments to Fair Housing Choice

II Reduced Parking: The reduced parking provisions of the AHIO are not likely to be affected by community design standards in that the CDO does not take away any entitlements or incentives.

• Expedited Processing: The provisions currently in place for expedited processing of affordable housing would still be in place.

The City is currently considering amendments to its AH,IOto comply with changes in State Law.

Small Lot Subdivision (Town home) Ordinance

This ordinance permits small-lot, fee-simple ownership opportunities in multi-family neighborhoods. This ordinance allows properties zoned for multi-family residential use to be subdivided into small lots, thereby reducing the cost of homeownership.

Transit Oriented Development

The City has adopted several "Transit-Oriented District" plans that increase density, reduce parking requirements, and establish design and development standards to create mixed use urban neighborhoods.

Residential Accessory Services (RAS)

Two Residential Accessory Services zones (RAS3 and RAS4) were created in 2003 to encourage mixed use development (housing and commercial) along underutilized commercial and transportation corridors. RAS zones provide increased floor area and height and reduced setbacks for 100 percent residential or mixed use projects constructed along commercial corridors. RAS3 permits 54 units per acre and RAS4 permits 108 units per acre.

Adaptive Reuse Ordinance

The City adopted the Adaptive Reuse Ordinance to facilitate the conversion of old, abandoned downtown office buildings into housing. The ordinance made it possible to convert historic buildings into apartments and condominiums by waiving modern zoning requirements.

Live/Work

The City adopted a Live/Work ordinance to allow housing in industrial zones. Specifically, conversion of industrial warehouses into live/work space has been a successful strategy in creating new housing in the City.

Infill Housing Evaluation Tool

The City developed an innovative GIS-based infill housing tool to provide a way for policy makers, developers, and neighborhood residents to Identify infill development sites and quantify the new housing that can be produced on those sites.

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5.1.6 Impacts of Land Use and Zoning Regulations and Practices on Housing for Persons with Disabilities

In 2002, the City of Los Angeles commissioned Mental Health Advocacy Services, Inc. to conduct a fair housing impediments study to review the City's Zoning Code and identify land use and zoning regulations, practices, and procedures that serve to impede the development, siting, and use of housing for persons with dtsablftties." Specifically, the study focused on the following aspects:

• The Zoning Code's definition of "family" may illegally restrict the residential zones in which housing for persons with disabilities may be located; and

• The use of a variance process for the siting of housing for persons with disabilities in all residential zones except in high density multi-family residential zones; and

• The lack of a reasonable accommodation procedure to relieve housing for persons with disabilities from strict compliance with land use and zoning regulations and practices.

Much of the following discussion is summarized from the Fair Housing Study: How Land Use and Zoning Regulations and Practices Impact Housing for Individuals with Disabilities, by the Mental Health Advocacy Services, Inc.

Impediments Related to the Definition of "Pamlly"

As discussed earlier, the City's Zoning Code definition of "family" could restrict the number of unrelated individuals, including individuals with special needs, from sharing housing. This definition of "family" has led to a number of fair housing impediments either directly in the Zoning Code or indirectly in the interpretation (practice) of the Code.

Zoning Code Impediment: Potential Discrimination against Unrelated Persons Living together

The City's definition of "family" infringes upon the privacy rights of unrelated persons to live together. A restrictive definition of "family" may illegally limit the development and siting of group homes for persons with disabilities but not the housing for families that are similarly sized or situated.

Practice Impediment: Consideration of Personal Characteristics in Land Use and Zoning Decisions

The Zoning Code should regulate based on the type of housing, but fair housing laws prohibit land use and zoning decisions be based on certain personal characteristics of the residents, including that they are individuals with disabilities. In implementing the Code, the City distinguishes between a congregate living arrangement for individuals with disabilities in recovery from that for elderly individuals, many of whom have disabilities.

6 Fair Housing Impediments Study: How Land Use and Zoning Regulations and Practices Impact Housing for Individuals with Disabilities. Kim Savage, Mental Health Advocacy Services, Inc., November 2002.

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Practice Impediment: Restrictions Imposed on Households More than Six Individuals with Disabilities

California law does not require a Conditional Use Permit for housing for individuals with disabilities. The Community Care Facilities Act requires that local jurisdictions in their zoning regulations treat residential care facilities for six or fewer individuals with disabilities as a single family for purposes of siting. However, most jurisdictions in California interpret this act as allowing the imposition of restrictions on residential care facilities for more than six persons. While under the Fair Housing Act, jurisdictions may have reasonable restrictions on the maximum number of occupants permitted to occupy a unit, the restrictions cannot be based on the characteristics of the occupants. Rather, the restrictions must apply to all residents and are based on health and safety standards. Therefore, imposing restrictions on community care facilities for six or more persons with disabilities violates the Fair Housing Act.

Practice Impediment: Mischaracterization of Housing for Individuals with Disabilities

The City has a general practice of determining that housing for more than six individuals with disabilities as a boarding or rooming house or hotel use that is permitted by right only in high density multi-family residential zones. In order for a boarding or rooming house to be located in lower density residential zones, a variance must be obtained from the City. A hotel use is not permitted in any residential zone, Therefore, the practice of categorizing housing for more than six individuals with disabilities as a boarding or rooming house or hotel use has the effect of denying housing opportunities for individuals with disabilities in violation of fair housing laws.

Practice Impediment: Mischaracterization of Housing with Supportive Services on Site for Residents with Disabilities

There is a common view that housing for individuals with disabilities is a commercial use because the residents pay to live in a group living arrangement and receive medical care and other assistance on site. This interpretation subjects such housing to commercial land use and zoning regulations and often, a business license. However, a single family engages in comparable management functions (e.g., gardener or housekeeper) is not subject to the same regulations. A practice or regulation that treats housing for individuals with disabilities as a commercial use when the same determination is not applied to Similarly situated and functioning families singles out individuals with disabilities in a discriminatory manner.

Impediments Related to the Lack of a Fair Housing Reasonable Accommodation Procedure and the Variance Process

Both State and federal fair housing laws mandate provisions for reasonable accommodation for housing for persons with disabilities. The State Housing Element law also requires that local jurisdictions address constraints to housing for persons with disabilities, including the provision of reasonable accommodation.

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Zoning Code Impediment: Lack of a Fair Housing Reasonable Accommodation Procedure

The City has a duty to provide reasonable accommodation in land use and zoning regulations and practices to individuals with disabilities. However, the City lacks an established procedure to comply with this requirement, potential denying housing opportunities for individuals with disabilities.

Zoning Code Impediment: Variance Process is Overused for Siting Housing for Individuals with Disabilities

The City's Zoning Code permits housing for individuals with disabilities for more than six persons by right only in the R3 and higher density multi-family residential zones. A variance process is used for siting housing for individuals with disabilities in lower density residential zones. Typically, use of a variance requires the applicant prove "hardship" based on certain unique characteristics of the property. Most jurisdictions use the Conditional Use Permit (CUP) process, which requires a showing that the proposed use will not negatively impact the surrounding properties. While both the variance and CUP processes may serve to impede housing for individuals with disabilities, the CUPprocess may be more appropriate in some instances. Specifically, a variance is granted on the basis of the physical characteristics of the property, and therefore does not constitute a compliance with the reasonable accommodation requirement which considers the disabilities of the residents.

Impediment Related to the Siting of Treatment Programs for Individuals with Disabilities

The California Welfare and Institution Code provides that any zone in which hospitals or nursing homes are permitted either by right or via a CUP process, mental health treatment programs (both inpatient and outpatient) are permitted.

Zoning Code Impediment: Distinguishing, for Purposes of Siting Restrictions, between Types of Treatment Facilities Based on Service to Individuals with Disabilities

The City's Zoning Code makes distinction between treatment facilities based on service to individuals with disabilities. Treatment facilities that serve individuals with contagious diseases, mental disabilities, or drug or alcohol substance abuse problems are prohibited from locating in any residential zone unless a variance is obtained from the City. They are permitted by right in the C2 zone.

In contrast, treatment facilities that do not serve those with contagious diseases, mental disabilities, or drug or alcohol substance abuse problems are permitted by right in R5 and via a CUPin R2, RD, R3, and R4. They are also permitted by right in Cl, C1.5, and C2 zones.

Zone Code Impediment: Prohibition against Locating Treatment Programs for those with Disabilities within 600 feet of Schools

The State has imposed a 300-foot spacing requirement between licensed residential care facilities, but local jurisdictions have the option to waive the requirement. However, the City Zoning Code prohibits the siting of a hospital, sanitarium or clinic for mental, or drug or liquor addict cases within 600 feet of a school. This prohibition singles out

Public Policies 5-21 Analysis of Impediments to Fair Housing Choice individuals with disabilities, those with mental disabilities, and those in recovery for substance abuse. This restriction violates State fair housing laws with regard to residential clinics or ADA with regard to non-residential uses, as well as the Welfare and Institution Code that requires mental health treatment programs be permitted in any zone where hospitals and nursing homes are permitted.

Impediment Related to Political Influence

Practice Impediment: In Land Use and Zoning Decision-Making and Funding Approval for Housing for Individuals with Disabilities, Political Concerns are Given Too Much Weight

The City's Area Planning Commissions (APCs) and Neighborhood Councils are intended to make government more localized and increase neighborhood involvement in decision- making. However, both systems have the potential for cultivating "Not-In-My-Backyard" (NIMBY) opposition to the development, siting, and use of housing for persons with disabilities (see further discussions under Section 5.7, Community Participation). APC members are political appointees with substantial authority in land use and zoning decision-making. Neighborhood Councils have the ability to use early notification system to communicate and gather community opposition to housing projects.

City Response

To address the constraints identified by the Fair Housing Impediment Study, the City proposed to adopt a Reasonable Accommodation Ordinance. As adopted, the Ordinance would achieve the following;

m Establish a standard procedure for requesting reasonable accommodation.

• Revise the definition of "farnllv" in the Zoning Code to read "one or more persons living together in a dwelling unit, with common access to, and common use of all living, kitchen, and eating areas within the dwelling unit. 'I

" Remove the distinction between treatment facilities based on service to individuals with disabilities for land use and zoning purposes.

5.2 Rent Stabilization

The Los Angeles City Rent Stabilization Ordinance (RSO), adopted in 1979 as Chapter XV of the Los Angeles Municipal Code, is intended to safeguard tenants from excessive and unjustified rent increases and unfair evictions. The City Council designed the law to protect tenants from excessive rent increases while allowing the landlords a reasonable return on their investment. Rental units subject to the Ordinance, and which must be registered, include: apartments, condominiums, townhouses, duplexes, two or more dwelling units on the same lot, mobile homes, mobile home parks, and rooms in a hotel, motel, rooming house or boarding house occupied by the same tenant for 30 or more consecutive days.

The Rent Stabilization Ordinance addresses allowable rent increases, the registration of rental units, the 12 legal reasons for eviction, and the causes for eviction requiring

5-22 Public Policies City of Los Angeles

relocation assistance payment to the tenant (see Section 5.2.1). Within these topical areas are certain rights of both landlords and tenants.

The RSOis seen by some as a constraint to development as it discourages investors that would not experience a high rate of return in residential investment. The Ordinance regulates rent increases by limiting the frequency, amount, and reason for rent increases. The ceiling on annual rent increases is based on the Consumer Price Index. The ordinance controls most rental units receiving a certificate of occupancy before October I, 1978, except single-family homes (one unit on a lot) and various other units as specified in the RSO. These stabilized units compose 64 percent of the rental housing stock citywide.

A 1994 study prepared for the Housing Department examined the ordinance's effectiveness in view of present conditions. It also determined that the RSOhas not had adverse effects on new construction in the City, due to exemption of post 1978 dwellings. The report did find that newly-constructed units are being marketed at prices that those now paying average rents cannot afford, although average rents tend to decline or stabilize without City regulation during economic recessions (as happened in the early 1990s).

5.2.1 Vacancy Decontrol

The Costa-Hawkins Rental Housing Act of 1995 had a significant impact on local rent control ordinances throughout Calffcrnla.? The Costa-Hawkins Act introduced a vacancy decontrol-recontrol process in rent-controlled housing (except for mobile homes). This process allows landlords of a rent-controlled unit to raise the rent to market rate after qualified eviction of or upon voluntary vacation by tenants. When the vacated units are rented out again, the rents are re-controlled and subject to rent increases determined by the city.

This legislation has raised considerable questions regarding the nature of "qualified evictions" and "voluntary vacation", as well as the impact of soaring rents on lower income persons and families, Discussionswith housing advocates and service providers indicated that some landlords may engage in illegal rent increases, evictions, or harassment in order to capitalize on the tight housing market." Often long-time tenants, particularly elderly persons, are targets of evictions/harassment since the differentials between the controlled and re-controlled rent levels tend to be the largest among long- time tenants,

5.2.2 lust Cause Eviction

In California, 13 jurisdictions have enacted rent control/stabilization ordinances and nine of these jurisdictions have also adopted Just Cause Ordinances. The City of Los Angeles Rent Stabilization Ordinance (RSO) includes just cause eviction provisions, and has established procedures which a property owner must follow to lawfully evict a tenant,

7 Just Cause for Eviction Study, February 2002, prepared by Cotton/Bridges/Associates for the City of San Jose Housing Department. 8 As part of the Just Cause for Eviction Study for the City of San Jose, Cotton/Bridges/Associates interviewed the cities of Santa Monica, East Palo Alto, West Hollywood, Berkeley, Oakland, and San FranciSCO,as well as more than 40 advocacy groups and service providers representing proponents and opponents of Just Cause for Eviction on the impacts of vacancy decontrol.

Public Policies 5-23 Analysis of Impediments to Fair Housing Choice

The City's regulations are in addition to California Civil Code regulations (Division 3, Part 4, § 1940 - 1954.1) establishing landlord and tenant rights and responsibilities. Under the City's Rent Stabilization Ordinance (RSO), there are 12 permissible grounds for eviction, summarized below (L.A. Municipal Code Section 151.09):

1. Failure to pay the rent to which the landlord is entitled.

2. Violation of a lawful obligation or covenant of the tenancy and failure to cure the violation after having received written notice from the landlord, other than a violation based on: a. failure to surrender possessionupon proper notice; b. exceeding a limitation on occupancy if the additional occupant is a first or second dependent child; or c. a change in the terms of the tenancy that is not the result of an express written agreement signed by both of the parties, except as permitted by Los Angeles Municipal Code Section 151.06 or as required pursuant to federal, state, or local law.

3. Commission or allowance of a nuisance that causes damage to the rental property or creates an unreasonable interference with the comfort, safety, or enjoyment of any of the other residents of the rental complex or within a 1,000 foot radius extending from the boundary line of the rental complex.

4. Use of, or permitting the use of, a rental unit, the common areas of the rental complex containing the rental unit, or an area within a 1,000 foot radius from the boundary line of the rental complex for any illegal purpose.

5. Refusal to execute a written extension or renewal of an expired rental or lease agreement, after the property owner has submitted a written request or demand, that has a similar duration and provisions to the expired agreement and is not in Violation of the City's Rent Stabilization Ordinance.

6. Refusing a landlord's request for reasonable access to a rental unit for the purpose of making repairs or improvements, or for the purpose of inspection as permitted or required by the lease or by law, or for the purpose of showing the rental unit to any prospective purchaser or mortgagee.

7. Possessionof a unit at the end of lease term by a subtenant who is not approved by the landlord.

8. The property owner's recovery of a unit for use and occupancy by the owner (provided the owner is a natural person), owner's spouse, children, parents, or a resident manager (provided that no alternative vacant unit is available.

9. The owner's good faith to recover possessionso as to demolish the rental unit or to perform work on the building or buildings housing the rental unit or units that would render the unit uninhabitable.

10.The owner's good faith effort to recover possession in order to remove the rental unit permanently from rental housing use.

11.The owner's good faith to recover possession of the rental unit to comply with a governmental agency's order that necessitates the vacating of the building

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housing the rental unit as a result of a violation of the Los Angeles Municipal Code or any other provision of law.

12. Cases in which the Secretary of Housing and Urban Development is both the owner and plaintiff and seeks to recover possession in order to vacate the property prior to sale and has complied with all tenant notification requirements under federal law and administrative regulations. 5.2.3 Relocation Assistance

Under the City's RSO, a property owner is required to pay relocation assistance to a tenant when evicting that tenant for one of the following reasons:

• The owner or a family member intends to occupy the rental unit; • A resident manager will occupy the rental unit; • The rental unit will undergo major rehabilitation or be demolished; • The rental unit will be permanently removed from the rental housing stock; • The rental unit must be vacated to comply with a governmental order (except an order related to hazardous conditions created by a natural disaster); or • The rental unit is part of a property to be reconveyed to HUD.

Any eviction requiring relocation assistance also requires the filing of a "Landlord Declaration of Intent to Evict" from with the Los Angeles Housing Department (LAHD). Failure to fife the Landlord Declaration with the LAHDmakes the eviction invalid.

As of March 2005, tenants in a rental unit on the date of service of the written notice of termination are entitled to receive $3,200 (per unit) in relocation assistance. Tenants who are 62 years of age or older, handicapped or disabled, or have one or more minor dependent children as of the date of service of notice to terminate are eligible to receive $8,000 per unit. The relocation payment or an escrow account setting such payment must be made within 15 days from the date of service of the notice. 5.2.4 Complaint Resolution

The RSO provides a process for tenant complaint investigation and resolution. Rent Stabilization complaints may be filed for one or more of five reasons:

• Non-registration of a rental unit; • Notice to evict based on false and deceptive grounds; • Non-receipt of relocation assistance when due; • Illegal rent increases; and • Illegal reduction of housing services.

The Los Angeles Housing Department (LAHD) administers the RSO. A Rent Investigator will investigate and attempt to resolve valid complaints through negotiations between the tenant and the property owner. If not resolved in this manner, the complaint can be referred to the City Attorney for consideration and possible further action.

LAHD maintains records on complaints received from RSOtenants. During a one-year period from July 1, 2003 to June 30, 2004, the City's RSO Hotline received 7,945 complaints. The majority of the complaints were related to eviction and illegal rent increases (Table 5-5). Of all 7,945 complaints, 33 percent were reconciled by investigation and enforcement. Only 3.7 percent were referred for possible State and/or

Pu blic Policies 5-25 Analysis of Impediments to Fair Housing Choice federal violation of tenant protection regulations (including noticing and fair housing), or referred to the City Attorney for potential prosecution. Approximately 19 percent of the complaints were withdrawn or closed due to complainants not following through with the process.

# of Unit not Registered with Rent Stabilization 1,564 19.7% # of Eviction 2,084 26.2% # of Non-Payment of Relocation Assistance 433 5.4% # of Illegal Rent Increase 2,156 27.1% # of Other 842 10.6% Total Cases 7,945 100.0%

5..3 Building Codes

Cities and counties in California are required to adopt the California Building Standards Code (Title 24 of the California Code of Regulations). The Code is actually a set of uniform health and safety codes covering building, electrical, mechanical, and plumbing, fire safety, and other issues. Uniform codes are generally considered the minimum acceptable standards for health and safety.

The Code is updated every three years by the California Building Standards Commission with additions and modifications specific to California. The triennial update is based on updates to the individual uniform codes that are adopted by their professional associations (such as the International Conference of Building Officials).

State law allows cities and counties to add local, more restrictive, amendments to the California Building Standards Code, provided such amendments are reasonably necessary due to local climatic, geological, or topographic conditions. The City of Los Angeles has adopted several amendments that are more restrictive than the state building code. Local amendments address:

• Health and safety issues particularly important in Los Angeles, such as graffiti- resistant finish for walls, damp-proofed material between grade and concrete slab, and prohibition of wood shingles for roofs due to the heightened fire danger.

.. Seismic regulations based on local geological conditions, including the anchoring of masonry and stone veneer to structural masonry, specifications for wall ties, and spaclnq of wood studs.

• Local climatic and topographic conditions such as the hot, dry Santa Ana winds, heavy rains, floods caused by "EI Nino" weather conditions, and fires in hillside areas. The City has adopted additional requirements for the glazing of openings in exterior walls, anchoring of post and beam construction, cantilever overhangs, and shingle bonding/tile attachment for roof construction, among other code amendments.

.. City procedural requirements, such as the review and approval by the Public Works Department of projects involving drainage under public sidewalks.

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• Building and Safety Department interpretations of unclear code provisions or for consistency with the intent of local ordinances. Examples include requirements for door projections of no more than one foot beyond a property line and exterior balcony projections of no more than four feet beyond exterior walls with one- hour fire-resistant construction.

These, and other, local code amendments are intended to improve safety for building occupants and would not likely result in significant cost increases for the production of housing or create discriminatory results in the availability of housing.

5.4 Systematic Code Enforcement

The City established the Systematic Code Enforcement Program (SCEP) in 1998 to ensure that all rental properties with two or more units on a single parcel are safe and habitable. The program was established in response to increased complaints regarding habitability and irresponsible slumlords targeting minority and [ow income residents,

The SCEP is administered by LAHD, which inspects residential rental properties subject to the program periodically. While the City has a goal of inspecting the rental properties every two years, staffing and budgetary constraints have extended the inspection cycle to three to five years. Inspectors from LAHD schedule every property for a thorough inspection, and any properties that do not meet the requirements of City and State codes are cited. Within five days after an Inspection identifies one or more code violations, an owner is given a notice to comply and provided with 30 days to complete the needed repairs. The City then re-inspects the rental unit to ensure that the corrective work has been done. A property owner may request an additional 30 days to comply based on the percentage of work completed when the request is made.

Tenants may also file habitability complaints directly with the LAHD, and inspectors will normally schedule an inspection within 72 hours.

5.5 Housing Authority of the City of Los Angeles (HACLA)

5.5.1 HACLA Programs

The availability and location of public and assisted housing is a fair housing concern. If such housing is concentrated in one area of a community, a household seeking affordable housing is limited to choices within the area. Public/assisted housing and housing assistance must be accessible to qualified households regardless of race/ethnicltv, disability, or other special characteristics. This section addresses only key housing programs administered by HACLA.

HACLA is a federally funded agency that administers housing assistance programs in the City for qualified low-income families (50 percent MFI), the disabled, and seniors. The key programs discussed in this section include the tenant-based Section 8 Voucher program and public housing.

Public Policies 5-27 Analysis of Impediments to Fair Housing Choice

Section 8 Vouchers

Section 8 is a rent subsidy program that helps low-income families and seniors pay rent to private landlords. Section 8 tenants pay a minimum of 30 percent of their income for rent and HACLApays the difference up to the payment standard established by HACLA. The program offers low-income households the opportunity to obtain affordable, privately owned rental housing and to increase their housing choices. HACLAestablishes payment standards based on HUD-established Fair Market Rents. The owner's asking price must be supported by comparable rents in the area. Any amount in the excess of the payment standard is paid by the program participant.

Resident Profile

As of June 2004, 51,508 households receive Section 8 assistance from HACLA. The racial composition of the recipients is: 56 percent Black, 41 percent White, and 2 percent Asian. Recipients of Hispanic origin (of all races) represent about 21 percent of the Section 8 households. Relative to their proportion of the City population, Hispanic residents are under-represented and Black residents are over-represented in the Section 8 program. Half of all vouchers are used by households with an elderly or disabled member. Of the individuals in the Section 8 households, 38 percent were children. The average household size in Section 8 households was smaller than among alt city households. Figure 5-2 shows the distribution of Section 8 vouchers by zip codes."

9 Does not include the 4,400 vouchers that are in use outside the City.

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T bl. 5. 6 5 80 .. h"'.ICS.. a Total 51,508 Individuals on Program 122,816 Adults on Program 75,788 62% Children on Program 47,028 38% Average Household Size 2.38 By Family Type Family 50% Elderly 25% Disabled 25% By Race Black 56% White 41% Asian/Pacific Islander 2% American Indian 0.2% Other 0.03% By Ethnicity Non-Hispanic 79% Hispanic 21% By Household Size Single Person 19,546 38% Two-Person 12,799 25% Three-Person 7,824 15% Four-Person 5,978 12% Five-Person 3,065 6% Six-Person 1,451 3% Seven-Person 529 1% Eight-Person 183 0.4% Nine-Person 77 0.1% Ten-Person 27 0.1% Eleven-Person 12 0.02% Twelve-Person 4 0.01% Source: Housing Authorltv of the City of Los Angeles 2004.

Special Section 8 Programs

HACLAoffers a variety of Section 8 special programs to eligible households. The 13 programs currently being administered by the Section 8 Division each has different eligibility requirements and each targets various segments of very low income households. These groups include persons with AIDS and homeless individuals. Other programs such as the Family Self-Sufficiency (FSS) and the Welfare to Work Voucher programs are designed to help households get off welfare and other public assistance and gain economic self-sufficiency. The FSSProgram offers families a financial incentive to participate in the form of an escrow account that becomes available to them upon program completion,

Public Policies 5-29 Analysis of Impediments to Fair Housing Choice

Challenges

Long waiting periods for assistance are common since the demand often exceeds the limited resources available, HACLA currently has a waiting list of 82,061 families, of which 70 percent are considered extremely low income (less than 30 percent of MFI). Half of waitl1sted families have children and half are elderly or disabled. Over three- quarters of the waiting list have requested one- and two-bedroom units. The amount of time spent on the Section 8 waiting list often varies and can be as long as eight years. These wait times can disproportionately impact the elderly, who may be frail and have health problems. Unfortunately, some elderly residents on the waiting list may not live long enough to receive assistance.

Given the tight housing market, many rental properties have no problem renting out units at market rents. The rental prices of those properties continue to rise. The financial incentives to participate in the Section 8 program are less attractive in a tight housing market than in a depressed housing market with high vacancy rates. Voucher recipients are more likely to find rental units where their vouchers are accepted in economically depressed neighborhoods, where the housing and neighborhood conditions are less than ideal. Researchers have also found that owners accepting Section 8 vouchers prefer senior households to farnlttes." This practice creates a potential fa ir housing concern. As shown in Figure 5-2, high concentrations of Section 8 vouchers are found in Central and South Los Angeles areas.

Federal policies have also had a drastic effect on the availability of Section 8 housing by the City. For example, the funding the appropriations act provides for 2005 was substantially below the amount needed to fund the renewing housing vouchers. With a shortfall of $570 million, HUD projected a loss of 80,000 housing vouchers. This impact on HACLA represented Section 8 assistance for 1,500 families. The appropriation level for FY 2006, as approved by the Senate on October 20, 2005, would reduce the Section 8 budget by another $226 million.

Public Housing

In addition to Section 8 assistance, HACLA owns and/or manages 50 housing developments and 43 scattered site units, totaling 9,042 units and 14,000 residents, The majority of the public and assisted housing owned and operated by the HACLA is located in South San Fernando Valley and South Los Angeles Area (Figure 5-2).

Resident Profile

As of 2004, most residents in housing developments owned and/or managed by the HACLA are Hispanic (71 percent) or Black (21 percent) with an average annual income of $13,500. Blacks and Hispanics are over-represented in this profile compared to their corresponding proportion in the City population. Twenty of the fifty housing developments are specifically for seniors, totaling 1,600 units.

10 Forbes, Elaine. "Eroding Neighborhood Integration: The Impact of California's Expiring Section 8 Rent Subsidy Contracts on Low Income Family Housing", UCLA Lewis Center for Regional Policy Studies, Working Paper #34, 2000. p. 35.

5-30 Public Policies ANGELES NATIONAL FOREST

VENTURA COUNTY

Calabasas

SANTA MONICA MOUN TAINS

.... lfGENO Public Housing ® Senior o Scattered Sites Pac i fie ~ Large Community

Section 8 Vouchers" o C 8 a " 1 ~400 vouchers 1111 401 - 1250 vouchers _ 1251 - 2695 vouchers ". by zip code \ Neighborhood Service Areas o '.\ Manhattan o City of Los Angeles "\ Beach - • - County Boundary \, "-- freeways ~~. ~. Major Roads ~. i"orrance Long ! '---A---'< __Beach ~o ~6--~ i - I I IMilo" - Source: CenS\IS Tiger O~ta 2000:(:.1I'(omi. Dept. 01 j m Social Svc, 2001; CiWof los Iu,gel., GIS; HUD .... ,.;.f fIGUR[ 5·2 < :I Roiling CITV 0 I I] SAN G E U S \ Rancho Palos Hills Distribution of Section 8 Vouchers and Public Housing Unhr....··-:::~:., Analysis of Impediments to fair Housing Choice ..... Analysis of Impediments to Fair Housing Choice

Challenges

The need for subsidized housing far exceeds the resources currently available, As of July 2004, 24,859 families were on the waiting list for public housing, including 5,031 elderly families, 6,983 families with members with disabilities, and 13,155 families with children (these categories are not mutually exclusive), Most of the public housing tenants and families on the waiting list had extremely low incomes (83 percent),

5.5.2 HAClA Policies and Plans

As a recipient of federal funds, HACLA must adopt policies and plans for applicant intake and screening and property management. The principal policy/planning documents adopted by HACLA are its 2004 Agency Plan, Admissions and Continued Occupancy Policy, and Section 8 Administration Plan.

In administering housing programs according to its policies and plans, HACLA does not utilize criteria or methods of administration that have the effect of discriminating against persons on the basis of their race, color, sex/ religion (creed), disability, familial status/ national origin, ancestry, sexual orientation, marital status, source of income, or age. Also, HACLA may not take any action that defeats or impairs the availability of a HUD- financed program or activity with respect to any persons on the basis of their race, color, sex, religion (creed), disability, familial status, or national origin,

According to a HACLA representative, HACLA has identified Hispanics, Asians/ and American Indians as the racial and ethnic groups who are less likely to apply for Section 8 assistance because, historically, the number of applications received from these groups is not proportionate to other groups in relation to the racial and ethnic composition of the City's population. In addition, working families and families with members who have a disability seem to be underrepresented. HACLA targets persons with special needs in its outreach efforts through its Special Programs.

According to the HACLA representative, the Section 8 Administration Plan specifies that applicants for and participants in HACLA's assisted housing programs who encounter discrimination in the exercise of their rights under Federal, State or local laws are given assistance in addressing discrimination complaints. As a policy, HACLA does not discriminate against individuals with disabilities and provides reasonable accommodations to all housing programs and related facilities included under its jurisdiction.

Analysis of Impediments to Fair Housing Choice for HACLA

As a recipient of HUD funds, HACLA is also required to actively further fair housing choice: 1) by assessing potential impediments to fair housing; 2) taking actions to address impediments identified; and 3) maintaining fair housing records. HACLA prepares its own Analysis of Impediments (AI) to Fair Housing Choice, independent of the process undertaken by the City of Los Angeles. For purposes of preparing the City's AI, Cotton/Bridges/Associates, preparer of this AI, had formally requested a copy of HACLA's AI via written correspondence; no copy was provided.

5-32 Public Policies City of Los Angeles

5.6 u.s. Department of Housing and Urban Development (HUO) Section 8 Contracts

Another form of Section 8 rental assistance is project-based Section 8 contracts which Congress created in 1974 as part of the Housing and Community Development Act. The contracts are agreements between owners of specific properties and HUD to set aside a portion of the units for income-qualified tenants. The rental assistance is tied to the property, unlike the Section 8 vouchers, which are portable with the tenants. When Congress established the various housing construction programs in the 1970s, 20-year project-based Section 8 contracts were used in conjunction with mortgage financing mechanisms to encourage the construction of affordable housing. Most of the mortgage loans had a 40-year loan term with an option to prepay the mortgage after 20 years. When project owners decide to prepay the remaining mortgage after 20 years (at the same time Section 8 contracts are expiring), the units will convert to market rate housing. Since the 1990s, many affordable housing developments have become eligible to prepay the mortgage and opt out of Section 8 contracts. Challenges

As of May 2004, over 6,600 affordable housing units in Los Angeles had expiring Section 8 contracts and may be at risk of being converted to market rate housing.11 Between 1997 and 2004, 2,269 units were converted to market rate units when the owner opted out of the Section 8 program. Between 1996 and 2003 over 6,900 units were converted when owners prepaid their mortgage. With the supply of Section 8 housing already well below the demand, conversion to market rate would exacerbate the problem of long waiting lists for an already vulnerable segment of the population. Recognizing the problems these expiring contracts may cause, HUD has established various initiatives to attempt to stem the tide of conversions. Some initiatives include marking some below- market Section 8 properties up to market rents and permitting non-profit owners of older-assisted properties to raise rents to fund necessary capital improvements. Nevertheless, in a tight housing market, financial incentives offered by HUD are not always competitive to the market rents that owners can capture upon conversion of the units to non-low income uses.

Evidence has shown that the dynamics behind the opt-out or renewal decision are a mixed blesslnq for Section 8 recipients. Owners opt out of the Section 8 programs for reasons that are financially motivated or merely because of difficulties encountered in dealing with HUD oversight. But researchers have found that owners, whatever their reasons may be, have a stronger tendency to renew Section 8 contracts in more segregated and traditional low-income neighborhoods and are less likely to renew in racially and economically integrated netqhborhoods.V

Section 8 was designed to offer families an alternative to living in conventional public housing developments. While not always true, many public housing projects were located in the "path of least resistance", often in poor minority areas." Section 8 was

11 California Housing Partnership Corporation, "Summary of Prepayment Eligible and Expiring Section 8 Contracts", 2003. 12 Forbes, p. 1 13 Ibid., p. 3

Public Policies 5-33 Analysis of Impediments to Fair Housing Choice

intended to offer residents a chance to live in higher quality neighborhoods and have access to better schools and jobs. With owners opting out in more integrated neighborhoods, Section 8 recipients will be increasingly confined to low-income areas, defeating the original purpose of the program. While very low-income households may still be able to find Section 8 housing, their options for moving into better neighborhoods has been greatly compromised in recent years.

5.7 Community Participation

The ability of individuals to petition their elected officials and partlclpate in public declslons is fundamental to American civil society. Citizens, particularly in California, have come to expect that public officials will consult them during the development of policies affecting land uses, the preparation of land use regulations, and permitting decisions on specific project proposals.

The City of Los Angeles has established a number of commissions and councils to help guide land use and zoning decisions. These appointed or elected individuals, to varying degrees, have the ability to influence the type and cost of housing being offered in the City. A diversity of polnts of view is important to reflect the varied interests of residents throughout the City. The following sections describe the commissions and councils that have direct influence on housing matters, particularly those that relate to housing for persons in the protected classes. 5.7.1 Area Planning Commissions

Under the 2000 Charter mandate, seven Area Planning Commissions (APCs) have been created: North Valley, South Valley, West Los Angeles, Central Los Angeles, East Los Angeles, South Los Angeles, and Harbor (see Figure 3-1 for the geographic boundaries). The boundaries are drawn so that all parts of the City are served. Each APC has five members, who, like the citywide Planning Commission members, are appointed by the Mayor and must reside within the area boundaries that the commission serves.

For purposes of land use and zoning dectsion-maktnq, the APCs make the initial determinations on certain applications for conditional use permits within their planning area boundaries and act as the first appellate body if a variance has been denied in a zoning administrator's decision hearing. speclflcellv, the role of the APCsis to:

• Hear and determine appeals where it is alleged there is error or abuse of discretion in any order, requirement, decision, interpretation or other determination made by a Zoning Administrator; • Hear and make determinations on any matter normally under the jurisdiction of a Zoning Administrator when that matter has been transferred to the jurisdiction of an area planning commission because the Zoning Administrator has failed to act within the time limits prescribed by ordinance; • Hear and determine applications for, or appeals related to, conditional use permits and other similar quasi-judicial approvals, in accordance with procedures prescribed by ordinance; • Make recommendations with respect to zone changes or similar matters referred to it from the City Planning Commission; and • Hear and determine other matters delegated to it by ordinance.

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The composition of the area planning commissions at the time of this report (March 2005) is as follows:

North Valley East Los Angeles • Tony Torres, Jr. (Hispanic/Latino) • Yolanda Chavez (Hispanic/Latino) • George Stavaris (White) • Mary George (Hispanic/Lattno) • Dr. John L Lett, Sr. (Black) • Alexis Moreno (White) • David S. Honda (Asian) • Michael Fleming (White) • Sandor L Winger (White) • Greg A. Wesley (Black)

South Valley South Los Angeles • Mike Mahdesian (White) • D'Ann Marie Morris (Black) • Thomas Cushman Hudnut (White) • James E. Silcott (Black) • Nate Brogin (White) • Arturo Ybarra (Hispanic/Latino) • David Iwata (Asian) • Frederick L Jackson (Black) Michael Grobstein (White) • Bettie Joann McKinney (Black)

West Los Angeles Harbor • Robyn Ritter Simon (White) • John McOsker (White) • Elvin W. Moon (Black) • Eleanor R. Montano (Htspanic/t.attno) • Matthew S. Rodman (White) • Joeann Valle (White) • Joyce Foster (White) • John Wilson (White) • David C. Voss (White) • Lee Hill (White)

Centra I Los Angeles • Young S, Kim (Asian) • Mary Lou Dudas (White) • Janett Humphries (Hlspanic/Latlno) • Beverly Ziegler (White) • Steven Carmona (Hispantc/t.atlno)

5.7.2 Neighborhood Councils

The second significant charter reform change effecting Los Angeles land use and zoning procedures is the creation of a citywide system of Neighborhood Councils. Neighborhood Councils are intended to be independent, self-governing groups organized from within the community. In general, local councils must represent a minimum of 20,000 residents and nonresident stakeholders. A stakeholder is any individual who:

• Lives, works! or owns property in the Neighborhood Council area; and/or • Participates in community organizations and other non-profits! homeowner, condominium, and apartment associations! neighborhood watch groups, school/parent groups, and a wide range of other organizations represented in the area.

The charter created a Department of Neighborhood Empowerment (DONE) and a Board of Neighborhood Commissioners to implement a plan for operating and certifying the Neighborhood Councils. The DONE is required under the charter to create an early notification system (ENS) to share information that potentially impacts the neighborhood area. In this way! they will have a reasonable amount of time to understand, discuss, and develop positions before final decisions are made. Staff, technical, and funding assistance for neighborhoods councils is provided through the DONE.

When there is a land use project in a certified Neighborhood Council's community! the Planning Department is required to notify the DONE of any public hearing.

Public Policies 5-35 Analysis of Impediments to Fair Housing Choice

Neighborhood Councils are strictly advisory; they may make recommendations but have no actual decision making ability.

Neighborhood Councils are groups of people (residents, property owners, business owners, and workers) who, once certified by the Cltv's Board of Neighborhood Commissioners, elect or select their own leaders, determine their own agendas, and set their own boundaries.

While neighborhood councils have no formal decision making authority, their existence provides the City with a formal process of communicating with, and soliciting input from, individuals at the neighborhood level. The councils do not add a layer of decision- making affecting fair housing choices, but do provide an opportunity for all affected stakeholders in a neighborhood to be heard on important local issues.

As of May 2004, 81 neighborhood councils have been certified by the City (65 of which have elected governing boards), two councils have pending certification requests, and 15 proposed councils are in the process of forming. The governance of each neighborhood council is based on its charter and by-laws. Due to the large number of neighborhood councils. it is not practical to provide information on the composition and background of each council member in this document.

5.7.3 Citywide Planning Commission

The City Planning Commission consists of nine members appointed by the Mayor and confirmed by the City Council. The role of the Planning Commission is to:

II Give advice and make recommendations to the Mayort Council, Director of Planning, municipal departments and agencies with respect to City planning and related activities and legislation; .. Make recommendations concerning amendment of the General Plan and proposed zoning ordinances; .. Make reports and recommendations to the Council and to other governmental officers or agencies as may be necessary to implement and secure compliance with the General Plan; and .. Perform other functions prescribed by the Charter or ordinance.

The Planning Commission hears appeals of administrative decisions and conducts public hearings on discretionary actions such as subdivision maps, specific plans, design review, rezonlnq, zoning text amendments, and general plan amendments.

The composition of the Planning Commission at the time of this report (March 2005) is as follows:

.. Mabel Chang (Asian) .. Ernesto Cardenas (Hlspanlc/Latlno) .. Joseph Klein (White) .. Bradley H. Mindlin (White) • Tom Schiff (White) • Joy Atkinson (African-American) • Mitchell B. Menzer (White) • David L. Burg (White) • Dorene C. Dominguez (Hlspanic/Latino)

5-36 Public Policies City of Los Angeles

5.7.4 Affordable Housing Commission

The Affordable Housing Commission was established to serve as an advisory body to the Mayor, the City Council, and the General Manager of the Los Angeles Housing Department (LAHD) on housing matters, including rent stabilization. The Commission is charged with these specific tasks:

• Advise the Mayor and the City Council with respect to the City's housing needs; • Recommend to the Mayor and the City Council a City housing policy and specific goals to meet the City's housing needs; • Coordinate the City's various housing programs; • Annually review the housing plans and budgets of City agencies and departments to ensure conformance with City housing policy; • Evaluate proposed policy and legislation for their impact on the preservation and production of housing and recommend to the Mayor and the City Council modifications that are necessary to achieve the City's housing goals; • Collaborate with City agencies and departments in the initiation of policies and programs that favorably impact housing development; and • Encourage public and private partnerships in promoting housing preservation and production.

The membership of the Affordable Housing Commission at the time of this report (March 2005) and their backgrounds are:

• Joe N. Shimoda (Asian) • Diana Rodriguez (Hlspanlc/Latlno) • Alice Harris (Black) • William Epps (Black) • Kenneth L. Ashford (Black) • Jan Bredienbach (White) • 1 Vacant Position 5.7.5 Community Redevelopment Agency

The Community Redevelopment Agency of Los Angeles operates within desiqnated redevelopment project areas to revitalize and improve those areas through the use of property tax increment and other financing techniques. Redevelopment areas are established to maintain and increase the supply of housing for low- and moderate- income households, renovate or remove and replace deteriorated and dilapidated structures, foster job creation and establish a climate that will attract and sustain private investment,

The Agency is governed by a seven-member Board of Commissioners appointed by the Mayor and confirmed by the City Council. The membership of the Community Redevelopment Agency at the time of this report and their backgrounds are:

• Madeline Janls-Apariclo (White) • John Stephen Schafer (White) • John A. Ornelas (Hlspantc/Latino) • Shu Kwan Woo (Asian) • Marva Smith Battle-Bay (Black) • Paul Hudson (White) • Jaye A. YoLing (Black)

Public Policies 5-37 Analysis of Impediments to Fair Housing Choice

5.7.6 Commission on Disability

The Commission on Disability is an advisory body that, with the Department on Disability, seeks to respond to the needs and concerns of disabled citizens in the City of Los Angeles. The Commission advocates for people with disabilities and serves in an advisory capacity to the Department. The Commission holds public hearings on critical issues, identifies priority issues to be addressed, and makes recommendations to the Mayor and City Council.

The membership of the Commission on Disability at the time of this report and their backgrounds are:

• Luis Mata (Hispanic/Latino) • Gordon R. "Sam" Overton (White) • Barbara Henton (Black) .. Mary Wong (Asian) • Karen Henderson-Winge (White)

II Sandy Driver-Gordon (White) • John James (Black) .. David E. Wolf (White) .. Dina B. Garcia (White) 5.7.1 Disabled AccessAppeals Commission

The Disabled Access Appeals Commission hears appeals of actions taken by the Department of Building and Safety in the enforcement of the requirements of state law dealing with access to public accommodations and housing by physically disabled persons. The Commission may uphold, modify, or overturn the Department's decision.

The membership of the Commission on Disability at the time of this report and their backgrounds are:

• Sarkis Ghazarian (White) .. Marilyn Grunwald (White) • Naresh C. Kamboj (Asian) • Daniel Germain (White) .. Monica Stout-Navarro (White) 5.7.8 Housing Authority of the City of Los Angeles

The Housing Authority is governed by seven-member Board of Commissioners appointed by the Mayor and confirmed by the City Council. The membership of the Housing Authority at the time of this report and their backgrounds are:

.. David Rubin (White) .. Manuel Salas (Hispanic/Latino) .. Elenore A. Williams (Black)

B Jane McGlory (Black) .. Michael A. Nogueira, Jr. (Hispanic/Latino) • Maria Del Angel (Hispanic/Latino) • Lovie Jackson (Black)

5-38 Public Policies City of Los Angeles

5.7.9 Los Angeles Homeless Services Authority

The Los Angeles Homeless Services Authority (LAHSA) is a joint power agency established in 1993 to administer the funding of homeless programs in the City and County of Los Angeles, In 1998, the LAHSACommission adopted a Five-Year Strategic Plan that details how LAHSAwill organize itself internally to support a growing demand on its capacity to plan, fund and monitor homeless programs.

Programs in the City of Los Angeles include the Winter Shelter program; six access centers that provide a variety of screening and referral services at locations throughout the City; an Emergency ResponseTeam to .asstst homeless persons living on the streets or in encampments; and a Community Voice Mail program that provides a private message service for homeless person seeking housing or employment.

LAHSA annually produces the Continuum of Care; a homeless program planning document required by HUD for funding of homeless programs. The plan describes and identifies locally-defined priorities for the homeless service delivery system. The Authority consists of five members appointed by City and County. The membership of the Homeless Services Authority at the time of this report and their backgrounds are:

• JoAnn Garcia (Hispanic/Latino) • E, FeliCiaBrannon (Black) • Christianne F. Kerns (White) • Ruth Schwartz (White) • Sarah Dusseault (White) 5.7.10 Citizens' Unit for Participation in Housing and Community Development

The Citizens' Unit for Participation in Housing and Community Development (CUP) is charged with representing the interests of the people of Los Angeles in directing federal funds for The US Department of HousIng and Urban Development (HUD). One person from each City Council District is appointed by his or her local Council Member to make recommendations based on input from the community. Other members represent the Mayor and the LosAngeles Housing Authority.

The CUP Board, in accordance with HUD requirements, actively seeks community input on a regular basis, With a charter to address the current needs of the Los Angeles community, CUP provides critical information to decision-makers. CUP members are vitally involved in their communities and are in active contact with citizens in their own districts. The membership of the CUP at the time of this report and their backgrounds are:

• Debra DuVal (Hispanic/Latino) • Glenn Gritzner (White) • Mary Garcia (Native American) • Virginia Huber (White) • Frank Hayashi (Asian) • Donald Lancaster (Black) • William Huber (White) • Candido Marez (Native American/ • Peter Lassen (White) Hispanic) • Mindy Meyer (White/Black) • Kaffie Powell (Black) • Alma ReavesWoods (Black) • Dr. Peter Rivera (Hispanic) • Jessie Samuel (Black) • Dr. Sandra Sternig-Babcock (White) • Raul Estrada (Hispanlc/Latl no)

Public Policies Analysis of Impediments to Fair Housing Choice

5.1.11 Rent Adjustment Commission

The Rent Adjustment Commission (RAC) of the City of Los Angeles is responsible for policies/ rules, and regulations regarding the proper and equitable administration of the Rent Stabilization Ordinance. The Commission also conducts studies, investigations, and hearings to gather necessary information to promulgate, administer, and enforce any regulation, rule, or order adopted in accordance with the Rent Stabilization Ordinance.

The Commission consists of seven members appolnted by the Mayor and confirmed by the City Council. The membership of the Commission at the time of this report and their backgrounds are:

II Ramon Muniz (Hispanic/Latlno)

II Jeffery Daar (White)

II Hermina Mimi Soto (Hispanlc/Latlno) m John Boyajian (Middle-Eastern) " Paula G. Leftwich (Black) • Beth Steckler (White) " Andres, F. Irlando (Hlspanlc/Latlno)

5-40 Public Policies Current Fair Housin Profile

Fair housing is addressed by federal and State regulations as well as court decisions that prohibit discrimination in the rental, sale, negotiation, advertisement, or occupancy of housing on the basis of protected classes. Implementation of fair housing practices is achieved through a network of realtors, apartment associations, housing associations, fair housing providers, and the courts. This chapter provides an overview of residents' perceptions of fair housing; issues identified by residents and service providers via interviews; institutional structure of the housing industry and how they may impact fair housing; and fair housing services available to residents.

6.1 Perceptions of Fair Housing in Los Angeles

As discussed in Chapter 2r Community Parttcipatlon, several methods were used to obtain community insight into fair housing issues examined in the analysis. Comments received during the outreach meetings and results of a resident survey (discussed below) illustrated some of the problems faced by residents seeking housing or already in place.

6.1.1 Fair Housing Community Outreach Meetings

Five community workshops were held in neighborhoods throughout the City to gather input regarding fair housing issues in the region. Attendees at the meetings included residents and representatives from a range of service providers. In reviewing the comments received at these workshops, several key issues are noted:

• Housing discrimination based on racer familial status, and disability are still the top issues in the City.

• Cases of discrimination often go unreported, likely due to lack of education and awareness of legal rights and available resources.

• Many people are not aware that familial status is a protected class.

• There has been an increase in complaints regarding rent increases and Section 504 compliance.

• There are reported cases of harassment against HIVjAIDS patients by landlords.

• Denying requests for reasonable accommodation is the most common form of discrimination against persons with disabilities.

• Occupancy limits present an impedlment to many Hispanic households.

Current fair Housing Profile 6-1 Analysis of Impediments to Fair Housing Choice

" Low income persons are sometimes discouraged from viewing an apartment or a home, or inquiring after financing options.

If Undocumented residents often do not report discrimination because they fear retaliation or being reported to the U.S. Citizenship and Immigration Services (USCIS).

B With a large immigrant population in the City, outreach and education efforts are sometimes difficult because of the language barriers.

• The process of filing a complaint may appear to be too complicated to many.

6.1.2 Fair Housing Survey

The Fair Housing Survey sought to gain knowledge about the nature and extent of fair housing issues experienced by City residents. The survey consisted of questions deslqned to gather information on a person's experience with fair housing issues and perception of fair housing issues in his/her neighborhood. A total of 1,005 residents responded to the survey. Copies of the survey were distributed at public locations and outreach meetings; no attempt was made to control the survey sample. Results of the survey are used only to provide insight regarding fair housing issues. By no means should this survey be used to confirm actually discrimination since no follow-up investigations were conducted to confirm the circumstances of the alleged discrimination. Sometimes, misunderstanding in the rights and responsibilities of the tenants and landlords may explain the accusations. A copy of the survey is included as Appendix B.

Who Responded to the Survey?

Housing Discrimination in Neighborhood

Of the 1,005 respondents, approximately half (46 percent) felt that housing discrimination was an issue in their neighborhood, while half (48 percent) did not think that housing discrimination was an issue. There were 61 non-responses to this question.

Experienced Housing Discrimination Personally

Thirty percent of the respondents noted that they had experienced housing discrimination, while some persons (13 percent) were not sure if what they had experienced was actually discrimination.

Who Do You Believe Discriminated Against You?

Among the 426 persons indicating that they had experienced housing discrimination or were not certain! most indicated that a landlord or property manager had discriminated against them. Some respondents identified a city staff person or real estate agent as the source of discrimination. Very few people indicated that they had been discriminated against by a mortgage lender or insurer. Five percent (22 persons)

6-2 Current Fair Housing Profile City of los Angeles

identified other sources of discrimination, including homeowners associations, police, management companies and a non-profit orqanizatlon.!

Alleged discriminator I Number I Percent Landlord/property manager 309 73% City staff 26 6% other 22 5% Real estate agent 21 5% Mortqaqe lender/insurer 8 2%

Where Did the Act of Discrimination Occur?

Among the persons indicating that they had experienced housing discrimination or were not sure, more than two-thirds of the respondents indicated that the discrimination occurred in an apartment complex. Eleven percent indicated that the discrimination occurred in a single-family home, and six percent indicated the incident occurred in a condominium development or when applying for a city program. Very few respondents indicated that it took place in a public or subsidized housing project.

Where discrimination took place I Number I Percent Apartment complex 278 65% Single-family neighborhood 46 11% Condo development 27 6% When applying to a City program 27 6% Public/subsidized housing project 18 4% Trailer/mobile park 4 1%

On What Basis You Believe You Were Discriminated Against?

When asked on what basis they felt they were discriminated against, approximately one- third of the respondents stated that they had experienced housing discrimination based on race, followed by family status and source of income. Less frequently cited reasons included national origin, marital status, and age.

According to the write-in portion of the survey, several survey respondents were denied housing by managers who told them that only persons of a particular ethniclty (typically a requirement to speak Spanish) were permitted to live in their building. The preference for Spanish-speaking residents may indicate an instance of "reverse discrimination," where landlords favor tenants of their own race, or slumlords seeking easy prey in those who appear to be immigrants or have limited English speaking skills. Several residents wrote that they were denied housing because of the size of their family, or that they had young children. Other written responses indicated that discrimination took the form of failure to carry out requests for maintenance and repairs. Several respondents described being harassed by managers for various reasons, including their race or ethnicity, having children, or for being disabled.

Because respondents could indicate multiple answers on a single question, the percentages on these multiple choice questions do not add up to 100 percent nor do the total number answers add up to the total number of respondents.

Current Fair Housing Profile 6-3 Analysis of Impediments to Fair Housing Choice

Basis for Discrimination I Number I Percent Race 159 37% Family Status 111 26% Source of Income 101 24% Color 49 12% National Origin 48 11% Age 36 8% Disability 31 7% Marital Status 26 6% Rellqlon 18 4% Sexual Orientation 15 4% Gender 14 3% Ancestry 7 2%

Requests for Reasonable Accommodation

Among the persons indicating that they had experienced housing discrimination or were not sure, 11 percent (45 persons) indicated that they had been denied "reasonable accommodation" in rules, policies or practices for their disability. Requests denied included the provision of adequate handicap access to higher floors and installation of ramps or bars on ramps for assistance.

Why Incidents Were Not Reported?

Of those indicating they were discriminated against or who were not sure, only 21 percent (89 persons) reported the incidents. Reflecting a concern discussed in the outreach meetings, many of the respondents who did not report the incident (158 persons) indicated that they did not know where to report or that they did not believe it would make a difference; some were even afraid of retaliation.

Reason for not Reporting I Number I Percent Don't know where to report 61 39% Don't believe it makes a difference 48 30% Afraid of Retaliation 46 29% Too much trouble 37 23% No answer 18 11%

Hate Crimes

Of all respondents completing the fair housing survey, 17 percent (174 persons) indicated that they had experienced a hate crime. Over half of those people specified that the hate crime was based on race, while a quarter said it was based on national origin and nearly a quarter based on family status. Hate crime statistics should be used with caution here; most respondents describing a hate crime were actually describing discrimination as opposed to an actual hate crime.

6-4 Current Fair Housing Profile City of Los Angeles

Basis for Hate Crime I Number I Percent Race 97 56% National ortorn 43 25% Family Status 37 21% Source of Income 32 18% Disability 29 17% Color 29 17% Sexual Orientation 23 13% Religion 20 11% Gender 16 9% Age 15 9% Marital Status 8 5% Ancestry 7 4% 6.2 Fair Housing Services

In general, fair housing services include investigating and resolving housing discrimination complaints, discrimination auditing and testing, and education, and outreach. Landlord/tenant counseling services involve informing landlords and tenants of their rights and responsibilities under fair housing law and other consumer protection legislations, and mediating disputes between landlords and tenants. This section reviews the fair housing services available in the City of Los Angeles. 6.2.1 Fair Housing Services Providers

Los Angeles Housing Department

Service Providers

The Los Angeles Housing Department implements the City's Fair Housing Program through a subrecipient contract with the Housing Rights Center. Given the size of the City, and the need to maintain offices that are accessible to residents throughout the City, HRC in turn subcontracts with the Fair Housing Foundation and the Fair Housing Council of San Fernando Valley to cover the geographic spread of the City.

• Housing Rights Center (HRC) - East, Central, and West Los Angeles areas • Fair Housing Foundation (FHC) - South LosAngeles and Harbor areas • Fair Housing Council of San Fernando Valley (FHCSFV) - North Valley and South Valley areas

Figure 6-1 illustrates the service areas of these three fair housing service providers.

Current Fair Housing Profile ANGELES NATIONAL FOREST

VENTURA COUNTY

Calabasas

SANTA MONICA MOUNTAINS

" r··-· .._·Matibu.._·.._...... "...._.....,,#~~.'.

lfGfNO fair Housing Sep/ice Provider Service Areas

Housing Rights Center

.. Fair Housing Foundation

~ Fair Housing Council of SFV !.\ o Neighborhood Service Areas 1-\ M€HihaUan D City 01 Los Angeles \ Beach Cities/Unincorporated Areas \ - • - County Boundary \ -- Freeways - - - - - Major Roads ~, Long Torrance (l Beacn i '-----,&---t, .0-I I I Miii..'-e: - Source: Ceo,u, Tiger o,,~ WOO; i m CiW of Los AUliete, GIS;Housing Righ!s Center 2005 ~..j ( ." flGURf 6·1 / ,<\ or,; Rolling CITY of lOS ANGfUS "\ Hills l Randlo Palos .... Verdes I.•• .,...••" Fair Housing Service Providers "\.., "'....., '.-', Analysis ollmpedirnenls to Fair Housing Choice City of Los Angeles

Office Locations for Los Angeles Residents

Walk-in locations available to City residents include:

• Housing Rights Center - Los Angeles Office 520 S. Virgil Avenue #400 Los Angeles 90020 Phone (213) 387-8400

• Housing Rights Center - Westside Office 3415 S. Sepulveda Boulevard # 150 Los Angeles 90035 Phone(310) 572-9234 Open on Wednesdays only

• Fair Housing Foundation - South Los Angeles Office 4401 Crenshaw Boulevard #317 Los Angeles 90043 Phone (323) 295-3302

• Fair Housing Council of San Fernando Valley 8134 Van Nuys Boulevard Panorama City 91402 Phone (818) 373-1185

Services Offered

The Housing Rights Center (HRC), Fair Housing Foundation (FHF), and Fair Housing Council of San Fernando Valley (FHCSFV) offer housing discrimination complaints investigation, tenant/landlord counseling, and fair housing education and outreach services for jurisdictions throughout the Los Angeles County. All services are offered in at minimum English and Spanish.

Housing Discrimination Complaints Investigation: HRC, FHF, and FHCSFV investigate housing discrimination complaints brought under both State and Federal fair housing laws. A housing discrimination complaint can be investigated through testing, the gathering of witness statements, or through research surveys. Case resolution can include mediation, conciliation, referral to state and federal administrative agencies, referral to outside fair housing attorneys, or representation by litigation attorneys of the respective fair housing service providers.

Tenant/Landlord Counseling: Tenants and Landlords are governed by an extensive set of rights and responsibilities through the use of Civil Codes, Health and Safety Codes, California Practice Guide, Business and Professions Code, Government Codes, and case law,

HRC, FHF, and FHCSFVoffer telephone and in-person counseling to both tenants and landlords regarding their respective rights and responsibilities. Assistance may also include mediation and assistance with unlawful detainers, When a client's matter is outside the agencies' scope of services, appropriate referral information is provided. These referrals include, but are not limited to local housing authorities, health and building & safety departments, legal assistance agencies, and other social service providers,

Current Fair Housing Profile 6-7 Analysis of Impediments to Fair Housing Choice

Outreach and Education: The fair housing service providers continue to develop and distribute written materials that describe the applicable laws that protect against housing discrimination and ways to prevent housing injustices. .

Additionally, fair housing workshops and programs are conducted for a variety of audiences such as property personnel (e.g., landlords, property managers, and realtors); tenants; prospective homebuyers; code enforcement personnel; police officers; city employees; and other non-profit organizations. Written materials have been translated into a number of languages, including Armenian, Korean, Chinese, Spanish, and Russian, and staff are available to translate presentations into various languages.

Since 2000, HRC has hosted an Annual Housing Rights Summit, which brings interested parties together to discuss fair housing, and also raises public awareness of fair housing issues and services generally. The event brings together civil rights advocates, social service providers, housing industry and community members, and government entities to address fair housing and other related issues, such as affordable housing and hate crimes. Similarly, FHF joins forces with the Fair Housing Council of San Diego to sponsor the annual Fair Housing Laws and Litigation Conference. HRC, FHF, and FHCSFV also offer Fair Housing Management Certification Training for housing industry professionals. Training is available in English, Spanish and Korean.

Service Gaps

The City has been proactive in initiating studies to analyze fair housing conditions in the City, above and beyond to the HUD mandated AI. HRC's contracted scope of services with the City is based on the recommendations of these various studies. Discussions with HRC, FHF, FHCSFV, and City staff indicated several areas of services may be expanded. These include increased outreach to homebuyers and sales and lending testing/audits.

City staff also indicated that better performance measures need to be built into the agreement and reporting requirements. For example, accomplishments of many fair housing activities are currently measured on an output basis, not an outcome basis (such as number of pieces of literature distributed or number of presentations made versus if the outreach activities were successful in deterring housing discrimination).

Another issue regarding fair housing services available was explored. Only three fair housing service agencies serve almost the entire County of Los Angeles - HRC, FHF, and FHCSFV.2 With a population of more than 9,500,000 residents, Los Angeles County is one of the most diverse metropolitan areas in the country. Significant burdens are placed on the three fair housing service providers to service the entire County.

Furthermore, each of these three fair housing councils focuses on servicing specific subregions of the County:

• HRC - East, West, and Central Los Angeles, and San Gabriel Valley • FHF - South Bay and Gateway cities

A few individual cities do use different services. For example, the City of Lakewood retains a consultant to provide fair housing services. The City of Santa Monica offers fair housing services with its own staff, sharing the responsibility between the Redevelopment and Housing Division and the City Attorney's Office.

6-8 Current Fair Housing Profile City of Los Angeles

• FHCSFV- San FernandoValley

The limited number of qualified fair housing service providers offers little choice for the City.

State Department of Fair Employment and Housing

The State Department of Fair Employment and Housing (DFEH) enforces the Fair Employment and Housing Act (FEHA), the Ralph Civil Rights Act, and the Unruh Civil Rights Act (see Chapter 1, Introduction, for descriptions of these laws). DFEHprotects residents from illegal discrimination and harassment in housing based on: race, color, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, medical condition (cancer/genetic characteristics), and age.

DFEHenforces the fair housing laws by:

• Investigating harassment, discrimination, and hate violence complaints • Helping landlords and tenants resolve complaints involving alleged violations of laws enforced by DFEH • Prosecuting violations of the laws enforced by DFEH • Educating residents about the laws against discrimination, harassment, and hate violence

DFEH operates a program for mediating housing discrimination complaints. The program is the largest fair housing mediation program in the nation developed under HUD's Partnership Initiative with state fair housing enforcement agencies. It provides California's tenants, landlords, and property owners and managers with a means of resolving housing discrimination cases in a confidential and cost-effective manner. Key features of the program are that it is free of charge to the parties and that the mediation takes place within the first 30 days of the filing of the complaint, often avoiding the financial and emotional costs associated with a full DFEH investigation and potential litigation.

However, DFEH does not conduct on-site investigations of housing discrimination complaints. This function is performed by the fair housing service providers under contract with the City.

City of Los Angeles Human Relations Commission

The City's Human Relations Commission addresses causes of group conflicts in the City. When tensions rise in the City, the Commission brings together peoples of diverse racial, religious, ethnic, and national backgrounds, regardless of their age, sexual orientation, language, and disability status so they may learn to live together. By means of workshops and retreats, the Commission's Field Team members teach leadership, facilitation, and conflict management skills to residents. The Commission also functions as a resource center for City departments and community-based organizations when they are faced with human relations-related issues, disputes and/or problems.

On an on-going basts, the Commission's Field Team visits each Council District and meets with stakeholders residing and/or working in those communities. They track constituent perceptions of the City's ever shifting demographic make-up and make note of how change impacts the local economy, inter-group and police-community relations, and the school system in each area. This information is used to pinpoint areas of

Current Fair Housing Profile 6-9 Analysis of Impediments to Fair Housing Choice

potential group conflict and advise the Mayor and the Council on measures that impact the status of human relations in those neighborhoods. The Commission continually monitors developments in the following issue areas, focusing on potential impacts of proposed policies on inter-group relations in Los Angeles:

.. Immigration

II Public Safety " Education • Lesbian, Gay, Bisexual and Transgender .. Media • Homelessness " Housing • Economic Development

los Angeles County Commission on Human Relations

The Los Angeles County Commission on Human Relations promotes positive race and human relations within County. The Commission has developed programs that proactively address racism, homophobia, religious prejudice, linguistic bias, anti- immigrant sentiment, and other divisive attitudes that can lead to inter-cultural tension, hate crimes and related violence. Programs include:

" Human Relations Mutual Assistance Consortium (HRMAC) " Network Against Hate Crime " Corporate Advisory Committee " Media Image Coalition " Hate Crime Victim Assistance & Advocacy Initiative ,. Youth Public Education Campaign " John Anson Ford Awards

Voluntary Mediation Services

Voluntary Mediation Services has offices throughout Los Angeles and surrounding cities. They offer bilingual services targeted at mediating various disputes, including landlord/tenant, rieighborhood, mobile home, homeowner association, and other civil and community issues.

Disability Mediation Center

The Disability Mediation Center is part of the Western Law Center for Disability Rights located at Loyola Marymount University in Los Angeles. The agency provides mediation services for people with disabilities and seeks to educate/increase awareness of disability issues. Services include mediation for landlord/tenant disputes and other civil rights violation related to disability.

6-10 Current Fair Housing Profile City of Los Angeles

6.3 Fair Housing Practices in the Ownership Housing Market

For many, part of the American dream involves owning a home in the neighborhood of one's choice. Homeownership is believed to enhance one's sense of well-being, is a primary way to accumulate wealth, and is believed to strengthen neighborhoods, as residents with a greater stake in their community will be more active in decisions affecting the future of their community. Not all Americans, however, have always enjoyed equal access to homeownership due to credit market distortions, redJining, steering, and predatory lending practices (see Chapter 4, Lending Practices). This section discusses the home sales process and potential impediments to fair housing choice in the home sales and the home loan industry. 6.3.1 The Homeownership Process

One of the main challenges in purchasing a home is the process itself. Buying a house takes considerable time and effort. The unique terminology and number of steps required, in addition to the major legal and financial implications of purchasing a home, can intimidate and overwhelm potential buyers, particularly first-time buyers. Fair housing issues may surface at anytime during this process. A report on mortgage lending discrimination by the Urban Land Institute indicates four basic stages in which discrimination can occur:

• advertising/outreach • pre-application inquiries • loan approval/denial and terms/conditions • loan administration

Different individuals take part in the various stages of this process and any of them may potentially discriminate. Differences in the level of encouragement, financial assistance, types of loans recommended, amount of down payment required, and level of customer service provided are all areas of potential discrimination.

Advertising

Housing discrimination can occur at the very outset of the homebuying process, including home sales advertisements. The nature of the language used in advertising, the use of models, and choice of advertising method are subject to scrutiny. Advertisements cannot include discriminatory references to the neighborhood or preferred homeowners, such as references to neighbors or the neighborhood in racial or ethnic terms or a preference for tenants of any age. Even jf an agent does not intend to discriminate in an ad, it would still be considered a violation to suggest to a reader whether or not a particular group is preferred. Recent litigation has also set precedence for violations in advertisements that hold publishers, newspapers, Multiple Listing Services, real estate agents, and brokers accountable for discriminatory ads.

Lending

Today, most sellers/real estate agents often require the home-seekers to pre-qualify for a loan prior to searching for a home. The home loan application process requires that the potential buyer provide a considerable amount of sensitive information including

Current Fair Housing Profile 6-11 Analysis of Impediments to Fair Housing Choice their gender, ethnicity, income level, age, and familial status. Most of this information is used for reporting required of lenders by the Community Reinvestment Act (CRA) and the Home Mortgage Disclosure Act (HMDA) to monitor loan trends. However, there is no guarantee that individual loan officers or underwriters will not misuse the information.

Appraisals

Banks order appraisal reports to determine whether or not a property is worth the amount of the loan they will grant. Generally, appraisals are based on the comparable sales of properties in the neighborhood of the property being appraised. Other factors taken into consideration include the age of the structure, any improvements made, and regional location. Some neighborhoods with higher concentrations of minorities may appraise lower than similar properties in neighborhoods with less minorities. One effect of this practice is that it tends to keep property values lower, thereby restricting the amount of equity and capital available to the residents. Because appraisals are geared toward a neighborhood and not a spectflc applicant, this practice of "discounting" property values in minority neighborhoods is not a direct violation of fair housing laws that can easily be addressed.

Real Estate Agents

Real estate agents have a pivotal role in the homebuying process, and whether intentionally or unintentionally, may also act as agents of discrimination. Real estate agents may steer a potential buyer to particular neighborhoods by encouraging the buyer to look into certain areas; others may choose not to show the buyer all choices available. Agents may also discriminate according to whom they agree to represent and whom they turn away.

Realtor associations have recognized the need to be aware of fair housing laws, and many host fair housing training to educate members on the provisions and liabilities of fair housing laws. The California Association of Realtors (CAR) has incorporated language regarding fair housing laws on many of its standard forms. The Southwest Los Angeles Association of Realtors operates the Multicultural Real Estate Alliance for Urban Change program, which represents and educates real estate professionals with workshops and roundtable discussions. The program advocates for and educates the public by providing homebuyer workshops on fair housing and predatory lendlnq.:'

A number of real estate professional organizations and monitoring agencies

National Association of Realtors (NAR)

HUD and the National Association of Realtors (NAR) entered into a Fair Housing Partnership and developed a Model Affirmative Fair Housing Marketing Plan for use by members of NAR to satisfy HUD's Affirmative Fair Housing Marketing regulations. NAR has also developed a Fair Housing Program to provide resources and guidance to Realtors in ensuring equal professional services for all people. The term Realtor identifies a licensed professional in real estate who is a member of the NAR; however, not all licensed real estate brokers and salespersonsare members of the Association.

3 Phone interview with Yolanda Clark, Multicultural Real Estate Alliance for Urban Change program. Southwest LosAngeles Association of Realtors. November 2004.

6-12 Current Fair Housing Profile City of Los Angeles

Code of Ethics: Article 10 of the NAR Code of Ethics provides that "Realtors shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, or national origin. Realtors shall not be a party to any plan or agreement to discriminate against any person or persons on the basis of race, color, religion, sex, handicap, familial status, or national ortqln."

A Realtor pledges to conduct business in keeping with the spirit and letter of the Code of Ethics. Article 10 imposes obligations upon Realtors and is also a firm statement of support for equal opportunity in housing. A Realtor who suspects discrimination is instructed to call the local Board of Realtors, which also accepts complaints alleging violations of the Code of Ethics filed by home-seekers. Local Boards of Realtors have a responsibility to enforce the Code of Ethics through professional standards, procedures, and corrective action in cases where a violation of the Code of Ethics is proven to have occurred.

Diversity Certification: NAR has created a diversity certification, "At Home with Diversity: One America," to be granted to licensed real estate professionals who meet eligibility requirements and complete the NAR "At Home with Diversity" course. The coursework provides business planning tools to assist real estate professionals in reaching out and marketing to a diverse housing market. The NAR course focuses on diversity awareness, building cross-cultural skills, and developing a business diversity plan.

California Department of Real Estate

The California Department of Real Estate (ORE) is the licensing authority for real estate brokers and salespersons in the State. OREhas adopted education requirements that include courses in ethics and in fair housing. To renew a real estate license, each licensee is required to complete 45 hours of continuing education, including three hours in each of the four mandated areas: Agency, Ethics, Trust Fund, and Fair Housing. The fair housing course contains information that will enable an agent to identify and avoid discriminatory practices when providing real estate services to clients.

ORE also investigates written complaints received from the public alleging possible violations of the Real Estate Law or the Subdivided Lands Law by licensees or subdividers. ORE also monitors real estate licensees doing business as mortgage lenders and mortgage brokers. If an inquiry substantiates a Violation, OREmay suspend or revoke a license, issue a restricted license, or file an Order to Desist and Refrain. Violations may result in civil injunctions, criminal prosecutions, or SUbstantialfines. The Department publishes monthly a list of persons and businesses which have been found to have conducted real estate activities without a license.

California Association of Realtors (CAR)

The California Association of Realtors (CAR) is a trade association of more than 92,000 realtors statewide. As members of organized real estate, realtors also subscribe to a strict NAR code of ethics, as noted above. CAR has recently created the position of Equal Opportunity/Cultural Diversity Coordinator. CARholds three meetings per year for its general membership, and the meetings typically indude sessions on fair housing issues.

Current Fair Housing Profile 6-13 Analysis of Impediments to Fair Housing Choice

Realtor Associations Serving Los Angeles

Realtor Associations are generally the first line of contact for real estate agents who need continuing education courses, legal forms, career development, and other resources. The frequency and availability of courses vary amongst these associations, and local association membership is generally determined by the location of the broker that an agent works for. Complaints involving agents or brokers may be filed with these associations.

Monitoring of services by these associations is difficult as statistics of the education/services the agencies provide, or complaint records pertaining to the members are rarely available. The following associations serve Los Angeles:

m Beverly Hills/Greater Los Angeles Association of Realtors • Southwest Los Angeles Association of Realtors • Malibu Association of Realtors • Pacific West Association of Realtors

Multiple Listing Services

In many counties throughout southern California, individual associations utilize different multiple listing services (MLS) within their respective jurisdictions. Other associations also provide access to Los Angeles; however they are extremely limited in the results, since the majority of agents use the Combined Los Angeles Westside (CLAW) MLS. For example, Pacific West Association of Realtors uses SoCal MLS, covering Southern California including Los Angeles, yet the listings that are pulled from the system are limited to the agents who belong to the association and only a handful may result at any given time a search is performed. Many brokers have arrangements that allow their agents to access the MLSISused by other associations, the exclusive use of only one MLS limits the properties an agent will find for his/her clients. Occasionally, an agent may use the wrong MLS and be perceived as steering because the search only pulls up limited results for that area. Recently, SoCal MLS has created an alliance that will allow agents to search various MLSdatabases at one time.

Sellers

Sellers may act in a discriminatory fashion if, for example, they choose not to sell his/her house to In the San Fernando Val/ey, an certain purchasers based on classification biases African American realtor and buyer protected by Fair Housing Laws, or they accept approached the sales office of a condominium, where the salesperson offers only from a preferred group. Sellers must told them that the unit was no longer sign the Residential Listing Agreement and for sale. However, the MLS listing Seller's Advisory forms to disclose their continued to list the property, understanding of fair housing laws and practice of indicating that the buyer and realtor nondiscrimination. However, enforcement is may have been discriminated against difficult because a seller may have multiple offers and choose one based on bias or make excuses Source: Housing Rights Center for not accepting a particular offer.

6-14 Current Fair Housing Profile City of Los Angeles

Covenants, Conditions, and Restrictions

Covenants, Conditions, and Restrictions (CC&Rs), are restrictive covenants that involve voluntary agreements which are bound to the land they are associated with. In the past, CC&Rs were used to exclude certain groups, such as minorities, from access to housing in a community. Today, the Statute of Frauds (Civil Code Section 1624) has requirements of CC&Rsto minimize fraud and abuse of any restrictions attached to a parcel, and the California Department of Real Estate reviews larger CC&Rs(subdivisions of five or more lots, or condominiums of five or more units) for a wide range of issues, including compliance with fair housing laws. If the CC&Rs are not approved, the Department of Real Estate will issue a "deficiency notice", requiring the CC&Rs be revised before the related property can be sold.

Communities with old subdivisions or condominium developments may still contain CC&Rsthat do not comply with the fair housing laws. However, provisions in the CC&Rs that violate the fair housing laws are not enforceable. Government Code Section 12956.1 basically requires that any declaration, governing document, or deed must have a cover sheet or stamp on the first page stating that discriminatory covenants in violation of state and federal fair housing laws are void and can be removed.

Credit and FICO Scores

Credit history is one of the most important factors in obtaining a home purchase loan. Credit scores determine loan approval, interest rates associated with the loan, as well as the type of loan an applicant will be given. Applicants with high credit scores are generally given conventional loans, while lower and moderate range scores turn to FHA or other government-backed loans. Applicants with lower scores also receive higher interest rates as they are perceived as a higher risk to the lender, and may even be required to pay polnts depending on the type of lending institution used.

Fair Isaac and Company (FICO), the company used by the Experian credit bureau to calculate credit scores, has set the standard for the scoring of credit history. Trans- Union and Equifax are two other credit bureaus that also provide credit scores, though they are used to a lesser degree.

FICO scores became more heavily relied on by lenders when studies conducted show that borrowers with scores above 680 almost always make payments on time, while borrowers with scores below 600 seemed fairly certain to develop problems. Some of the factors that affect a FICO score are:

• Delinquencies • New accounts (opened within the last twelve months) • Length of credit history (a longer history of established credit is better than a short history) • Balances on revolving credit accounts • Public records, such as tax liens, judgments, or bankruptcies • Credit card balances • Number of inquiries • Number and types of revolving accounts

Current Fair Housing Profile 6-15 Analysis of Impediments to Fair Housing Choice

Recent legislation requires lenders to disclose the use of FICO scores to borrowers applying for loans, as well as provide a copy of the report used in the application process. Insurance

Insurance agents are provided with underwriting guidelines for the companies they work for to determine whether or not a company will sell insurance to a particular applicant. Many insurance companies have instated strict guidelines, such as not insuring older homes, that disproportionately affect lower income and minority households that can only afford to buy in older neighborhoods. A California Department of Insurance (CDI) survey found that less than one percent of the homeowners insurance available in California is currently offered free from tight restrictions. The CDI has also found that many urban areas are underserved by insurance agencies.

Currently, underwriting guidelines are not public information, but consumers have begun to seek access to these guidelines to learn if certain companies have discriminatory policies; Some states are being more responsive than others to this demand and have begun to require companies to file the underwriting guidelines with the state department of insurance, which would then make the information public.

Oversight Efforts

The California Organized Investment Network (COIN) is a collaboration of the California Department of Insurance, the insurance industry, community economic development organizations, and community advocates that facilitates insurance industry investments, which provide profitable returns to investors, and economic and social benefits to underserved communities.

The California Fair Access to Insurance Requirements (FAIR) Plan was created by the Legislature in 1968 after the brush fires and riots of the 1960's made it difficult for some people to purchase fire insurance due to hazards beyond their control. The FAIR Plan is designed to make property insurance more readily available to people who have difficulty obtaining it from private insurers because their property is considered "high risk."

6.4 Fair Housing Practices in the Rental Housing Market

As with the homeownership market, a major challenge to ensuring fair housing in the rental market is the complexity of the process. There are several stages in the process of renting a home or apartment:

• Advertislnq and outreach stage • Pre-application inquiries and responses • Criteria for acceptance • Leaseprovisions and administration of the lease

This section discusses these phases of the rental process. While a potential homebuyer may face discriminatory practices primarily during the process of purchasing a home, a

6-16 Current Fair Housing Profile City of Los Angeles

renter may confront housing discrimination not only during the process of renting but throughout the tenancy.

6.4.1 Apartment Rental Process

Recognizing the importance of their role, some rental companies have incorporated fair housing awareness programs into their training curriculum. All rental companies interviewed for this study (discussed further in Chapter 2, Community Participation) required their employees to receive fair housing training, and had varying degrees of oversight on fair housing practices. Some rental or management offices refer fair housing complaints to attorneys, rent stabilization boards, or customer service hotllnes, while others direct tenants to upper management or a corporate office. Some companies were not aware of fair housing mediation options.

Advertising

Information about available apartments can As indicated in the Fair Housing Survey, be found in the classified section of local various tenants complained that they newspapers, on posted signs, in apartment experienced a kind of "reverse

guides, on the internet, as well as from discrimination, N where landlords refused apartment brokers or word-of-mouth. The to rent to them because they spoke only same types of discriminatory language English, or units were shown to Hispanic described under the Homeownership Process families after it was said that the unit was are also not permitted to be used by no longer available. This may be an landlords or apartment managers to exclude Indication of slumlords seeking "easy prey," particularly immigrant famifies or "undesirable elements. II those with limited English speaking skills. HRC recently obtained its second consent decree after a recent investigation into the advertising practices of major rental websites in Los Angeles and Ventura Counties, which concluded that the websites had published numerous discriminatory statements that demonstrated a preference based on classes protected by fair housing laws. HRC and Westside Rentals have now formed a partnership to provide fair housing education among those who access the Westside Rentals website and the general public.

Viewing the Unit The Los Angeles Times reported an African-American woman al/eged in Viewing the unit is the most evident point at State court that the landlord put her on which potential renter may encounter a wait list instead of offering her an discrimination. Becausethey have face-to-face available unit because of her race. The contact with the potential renter during viewing complaint also alleged that HRC's race of the unit, landlords or managers may judge test at the 12-unit complex confirmed on appearance or discriminate based on race, discrimination based on race. Under the settlement in this case, the landlord disability, or other factors. will pay $50,000 to the complainant. Credit Check

Landlords may ask the potential renters to provide credit references, lists of previous addresses and landlords, and employment history/salary. The criteria for tenant selection, if any, are typically not known to those seeking to rent. Landlords often use credit history as an excuse to exclude certain groups. Recent legislation provides for applicants to receive a copy of the report used to evaluate applications.

Current Fair Housing Profile 6-17 Analysis of Impediments to Fair Housing Choice

The lease

Most apartments are rented under either a lease agreement or a month-to-month rental agreement. Information written in a lease or rental agreement includes the rental rate, required deposit, length of occupancy, apartment rules, and termination requirements.

Typically, the lease or rental agreement is a standard form completed for all units within the same building. However, the enforcement of the rules contained in the lease or agreement may not be standard for all tenants. A landlord may choose strict enforcement of the rules for certain tenants based on arbitrary factors, such as race, presence of chiIdren, or disability. Since the recent escalation of housing prices throughout California, complaints regarding tenant harassment through strict enforcement of lease agreements as a means of evicting tenants have increased.

Harassment has also Increased in rent-controlled areas as landlords seek to earn a higher return on their rental properties. Most of the City's apartment rates are regulated by rent stabilization laws in the Los Angeles Municipal Code. Rent control ordinances limit or prohibit rent increases and notices to vacate tenancy. In Los Angeles, rent increases are limited to three percent each year. Also, the rent control ordinance allows landlords to evict tenants only for "just cause", requiring the landlord to state and provide a valid reason for terminating a month-to-month tenancy. Despite these regulations, residents report having experienced illegal rent increases, harassment, and eviction while living in rent-controlled units, as further discussed below. In FY 2003/04, more than 53 percent of the complaints received by the City's Rent Stabilization Ordinance (RSO) unit were related to evictions and illegal rent increases (see Table 5-5 in the previous chapter).

Security Deposit

A security deposit is typically required. To deter According to representatives at one of the fair housing focus group "undesirable" tenants, a landlord may ask for a meetings, insurance companies have security deposit higher than that requested of been a major impediment to the others. Tenants may also face differential operation of multi-family housing, treatment when vacating the units: the landlord particularly those with Section 8 may choose to return a smaller portion of the tenants or childcare facilities on site, security deposit to some tenants, claiming as they are considered "high risk. II excessive wear and tear.

During the Tenancy At the outreach meetings, familial During tenancy, the most common forms of status was frequently cited as reason discrimination a tenant may face are based on for discrimination. Mothers with young children were told that their familial status, race, national origin, sex, or children had to play indoors, or disability. According to the Fair Housing Survey remain within a demarcated portion of (discussed in Chapter 2), race, familial status, an apartment courtyard. In the San and source of income were the top three bases Fernando Valley, there were instances for discrimination. These types of discrimination of larger families being told, after typically appear in differential enforcement of moving into a unit, that there was rules; overly strict rules for children; excessive "not enough room" for them, although occupancy standards; refusal to make a occupancy standards were not cited reasonable accommodation for handicapped as a concern.

6-18 Current Fair Housing Profile City of Los Angeles

access; refusal to make necessary repairs; eviction notices; illegal entry; rent increases; or harassment.

Tenants with disabilities are sometimes denied The outreach meetings illuminated reasonable accommodation (as explained in numerous forms of discrimination 5.1.6, Potential Regulatory Impediments) in the experienced by tenants with form of unit modifications, such as the addition of disabilities. Tenants with disabilities ramps and installation of grab bars. Disabled who require aides have reportedly faced a form of harassment as tenants may even be pressured to move out of landlords scrutinize their assistants by their units by landlords who do not want to examining their records, demanding provide accommodation, especially if they that they be added to the lease, or in complain to or rally fellow tenants. some cases asking them to prove citizenship. Landlords of rent-controlled units have also been known to threaten unwanted tenants into leaving in order to bring in new residents. Tenants with limited English skills and immigrants are especially vulnerable to harassment, and residents at the outreach meetings reported being forced to pay unjustified rent increases and having their power and water intermittently cut off. Those who complain may face retaliation as landlords seek to "scare out" current tenants.

6.4.2 Apa rtment Associations

California Apartment Association

The California Apartment Association (CAA) is the country's largest statewide trade association for rental property owners and managers. CAA has developed the California Certified Residential Manager (CCRM) program to provide a comprehensive series of courses geared towards improving the approach, attitude and professional skills of on- site property managers and other interested individuals. The CCRMprogram consists of 31.5 hours of training that includes fair housing and ethics along with the following course topics:

• Preparing the Property for Market • Professional Leasing Skills and the Application Process • The Move-in Process, Rent Collection and Notices • Resident Issues and Ending the Tenancy • Professional Skills for Supervisors • Maintenance Management • Liability and Risk Management • Fair Housing • Ethics and Our Industry

Apartment Association of Greater Los Angeles

The Apartment Association of Greater Los Angeles (AAGLA) coordinates services for its members in the Los Angeles County. While no fair housing training is required of its members, the AAGLA provides free legal information and standard forms to members. Resident manager training classes are offered monthly. For fair housing questions or concerns, information is provided over the phone as well as through referrals, if necessary. The Executive Director typically handles most fair housing questions from

Current Fair Housing Profile 6-19 Analysis of Impediments to Fair Housing Choice

apartment owners, managers and landlords. For more complex Issues, the AAGLA refers its members to the local fair housing agency or to an attorney."

Apartment Owners Association

The Apartment Owners Association (AOA) has offices in San Fernando Valley, Los Angeles, and Long Beach. This organization provides a range of member services, including training, vendor listing, credit/eviction reports, legal advice, and the AOA Buyers Guide, a monthly magazine with articles covering various topics, including fair housing.

National Association of Residential Property Managers

The National Association of Residential Property Managers (NARPM) is an association of real estate professionals who are experienced in managing single-family and small residential properties. NARPM promotes property management business ethics, professionalism and fair housing practices within the residential property management field. Members of the association are subject to a strict Code of Ethics to meet the needs of the community, which include the following duties:

II Protect the public from fraud, misrepresentation, and unethical practices of property managers .. Adhere to the Federal Fair Housing stature

II Protect the fiduciary relationship of the client .. Treat all tenants professionally and ethically • Manage the property in accordance with the safety and habitability standards of the community " Hold all funds received in compliance with state law with full disclosure to the client

NARPM also certifies its members in the standards and practices of the residential property management industry and promotes continuing professional education. Various educational courses are offered as part of attaining the Association's various professional designations. Attainment of these designations requires the following fair housing and landlord/tenant law courses:

• Advertising For Fair Housing/ADA • Fair Housing Issues Of Property Managers .. Fair Housing • Accommodations And Modifications .. Property Management The Property Code • Landlord/Tenant Laws

Multicultural Real Estate Alliance

The Multicultural Real Estate Alliance represents and educates real estate professionals with workshops and roundtable discussions. The Alliance also advocates for and educates the public by providing homebuyer workshops on fair housing, predatory lending, and other topics. Typically, workshops are provided monthly, depending on

4 Telephone interview with Rita McCutchan, Training Manager, Apartment Association of Greater Los Angeles. November 2004.

6-20 Current Fair Housing Profile City of Los Angeles demand. Complaints received by the Alliance are referred to a member of the Alliance that deals with fair housing issues, such as the fair housing councils.

6.5 Fair Housing Statistics

As part of the enforcement and tracking services provided by the fair housing service providers, intake and documentation of all complaints and inquiries result in the compilation of statistics provided to the City in the form of quarterly and annual reports.

Statistics reported throughout Los Angeles indicate that low income households, regardless of race are the most heavily impacted by fair housing issues. The majority of complaints reported were based on race, familial status, and disability. Consistent with the demographics composition of the region White, Hispanics, and African-Americans reported the majority of complaints. 6.5.1 SalesAudits

Over the past several years, the Housing Rights Center (HRC), along with the Fair Housing Council of San Fernando Valley (FHCSFV) and the Fair Housing Foundation (FHF), has conducted rental housing testing in the City to determine the extent of discrimination. With the demand for homes at an all time high, HRCcoordinated a sales audit testing for FY 2003/04. The goal of the project was to determine if prospective homebuyers experienced differential treatment based on their race or national origin, or were steered to specific neighborhoods by real estate agents during the pre-application stage of a home purchase transaction.

The three fair housing organizations conducted a total of 40 pre-application paired sales tests on race and national origin in the Hollywood-Wilshire area, West Los Angeles, South Los Angeles, and the San Fernando Valley. Trained testers were Black, Hispanic, and Korean, with a White control tester. Legitimate business concerns such as income, assets, debts, length of employment, and length of tenancy were controlled in order to determine whether minorities were given the same housing opportunity as their White counterparts in their efforts to purchase a home.

Of the 40 pre-application sales tests conducted, 12 produced evidence of differential treatment and steering based on race, while 14 were incomplete. Incomplete tests were due to reasons ranging from real estate agents refusing to meet with testers because they were not pre-qualified, to agents telling testers that homes were not available. Of the 12 cases with evidence of discrimination, three were Korean/White tests, six were Hispanic/White tests, and three were Black/White tests. Excluding the 14 incomplete tests, the percentage of tests indicating discrimination took place would increase to 46 percent.

Tests conducted in the Hollywood/Wilshire (50 percent) and West Los Angeles (40 percent) service areas indicated higher instances of discrimination than found in the San Fernando Valley (20 percent) and South Los Angeles (10 percent). In those cases where testers were unable to make contact with a realtor, discrimination could exist by the mere fact that realtors were unwilling to meet with cllents."

5 Housing Rights Center. Pre-Application Sales Testing Audit Report. Fiscal Year 2003/2004.

CUrrent Fair Housing Profile 6-21 Analysis of Impediments to Fair Housing Choice

6.5.2 Rental Signage Audits

In FY02/03, the fair housing service providers conducted follow-up enforcement activity to the Changing Trends Audits that were conducted in FY 1998/99 and FY 1999/00, which found a high incidence of discrimination against Black prospective tenants in favor of Hispanic and/or Asian tenants in neighborhoods that were undergoing demographic shifts.

The follow up audit focused on non-English language for-rent signs. This was done by identifying 22 buildings throughout the City that had non-English language signs, and conducting enforcement activity to have the signs changed.

According to the Housing Rights Center's Annual Report for FY 2002/03, non-English language has the effect of stating a preference for the type of tenant the landlord hopes will apply. For example, signage in Spanish or Korean invites only Spanish or Korean speakers to apply for an available unit, thereby discouraging those who do not speak or read those languages. Since language is closely associated with race and/or national origin, this is a violation of fair housing law. Most of the landlords voluntarily removed the signage upon request. Other cases have been referred to attorneys for further activity.

6.5.3 General and Fair Housing Inquiries

Overall Trends

Fair housing complaints data are recorded by HRC, FHF,and FHCSFV. During the three- year period of FY2002/03 through FY2004/05, the numbers of general housing and fair housing inquiries have been fairly consistent (Table 6-1}.6 Consistently, the Hollywood/East Los Angeles and South Los Angeles areas received the highest number of calls for general housing inquiries between FY 2002/03 and FY 2004/05. However, the Hollywood/East Los Angeles and San Fernando Valley areas received the highest number of calls relating to fair housing. Specifically, the San Fernando Valley area had the highest proportion of fair housing-related calls that turned into fair housing cases in FY2002/03 and in FY2004/05. Approximately 54 percent of the fair housing calls in the San Fernando Valley area became cases in FY 2004/05, compared to 38 percent in Hollywood/East Los Angeles, 33 percent in West Los Angeles, and 41 percent in South Los Angeles. (Detailed statistics are available in Appendix C.)

6 Statistics include calls received by the Housing Rights Center, Fair Housing Foundation, and Fair Housing Council of San Fernando Valley.

Current Fair Housing Profile City of Los Angeles

General Housing 3,239 1,406 1,342 1,888 7,875 Fair Housing 410 117 356 160 1,043 Inquiries 251 79 190 101 621 Cases 159 38 166 59 422 Total 3,649 1,523 1,698 2,048 8,918 HRC HRC FHCSFV FHF South FY 2003 I Hollywood I West LA I SFV I LA I Total General Housing 2,896 1,140 1,445 2,087 7,568 Fair Housing 393 126 387 258 1,164 Inquiries 202 70 221 158 651 Cases 191 56 166 100 513 Total 3,289 1,266 1,832 2,345 8,732 HRC HRC FHCSFV FHF South FY 2004 I Hollywood I West LA I SFV I LA I Total General Housing 3,709 1,224 1,462 2,148 8,543 Fair Housing 591 160 371 282 1,404 Inquiries 367 108 170 166 811 Cases 224 52 201 116 593 Total 4,300 1,384 1,833 2,430 9,947

Profile of Callers

Race and Ethnicity

Since FY 2002/03, the race/ethnlcltv reporting by HRC for the combined statistics has been changed to separate race from Latino ethnicity to match the Census data and HUD requirements. Thus, comparison with prior years' data would be difficult. For FY 2003/04 and FY 2004/05, about 22 percent of the callers were Black and 40 percent of the callers were White. Native Americans comprised about 14 percent of the callers in FY 2003/04 and 16 percent of the callers in FY 2004/05. Asians comprised about four percent of the callers in both years. As for Latino ethnlcity, about 35 percent of the callers were Hlspanlc/Latlno in both years.

Income

Housing issues tend to impact lower and moderate income households disproportionately. Between FY 2002/03 and FY 2004/05, at least 90 percent of the callers were low and moderate incomes. Specifically, calls from extremely low and low income households experienced a sharp rise - from 57 percent in FY 2002/03 to 80 percent in FY2003/04 and FY2004/05.

Special Needs Groups

Among the callers for general and fair housing inquiries, certain callers are considered "special needs" groups. In tracking the HRC statistics for the past three years, the proportion of calls from female-headed households had decreased, while calls from seniors had been consistent, and calls from persons with disabilities had increased

Current Fair Housing Profile 6-23 Analysis of Impediments to Fair Housing Choice

(Figure 6-2). Approximately 40 percent of the calls were from tenants in rent-stabilized units.

Figure 6-2: Special Needs Characteristics of Callers

50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Female Headed Senior Disabled Rent Stabilized

Note: Percentage of callers from rent-stabilized units in FY 2002 represented only the proportion of callers for fair housing complaints; the percentages for other years represented the proportion of callers for all housing inquiries.

Source: HRC,May 2005

Type of Callers

By far, in-place tenants represented the majority of the callers - 86 percent in FY 2002/03 and 89 percent in FY 2003/04 and FY 2004/05. The fair housing service providers also received calls landlords and rental homeseekers, but these calls made up to less than ten percent of the calls. Calls from homebuyers were limited, indicating additional efforts may be necessary to outreach to this group. 6.5.4 Fair Housing Complaints Reported by HRC

The number of fair housinq-related calls increased over time, from 1,043 calls in FY 2002/03 to 1,404 in FY 2004/05. Typically, between 40 and 44 percent of the fair housing calls became discrimination cases.

Bases of Discrimination

As of FY 2004/05, the most frequently cited bases for discrimination were familial status, race, physical disability, and national origin (Table 6-2). Based on the trends shown, discrimination based on race, while still Significant, experienced a slight decline between FY 2002/03 and FY 2004/05. However, discrimination based on physical disability and familial status increased during those three years. These statistics corroborated with anecdote comments received at community meetings, focused group meetings, and interviews with service providers.

Current Fair Housing Profile City of Los Angeles

Race/Color 103 24% 122 24% 116 20% Familial Status 103 24% 133 26% 154 26% National Origin 63 15% 75 15% 63 11% Religion 3 1% 11 2% 9 2% Disability - Mental 25 6% 20 4% 44 7% Disability - Physical 69 16% 92 18% 113 19% Gender 18 4% 20 4% 28 5% Marital Status 4 1% 8 2% 10 2% Sexual Orientation 19 4% 16 3% 15 3% Age 5 1% 13 3% 10 2% Source of Income 7 2% 2 0% 13 2% Arbitrary 4 1% 1 0% 16 3% Student Status o 0% o 0% 2 0% Total 423 100% 513 100% 593 100% Source: Housing Rights Center, May 2005

Findings

Typically, less than half of the discrimination cases had sustained allegations; however, a large proportion had inconclusive evidence (Figure 6-3). Inconclusive evidence does not necessarily mean that discrimination did not occur. Often, a lack of experience in documenting evidence by the complainants can be a factor.

Figure 6-3: Findings of Fair Housing Cases

100"/0

00"/0 80"10 7(/'/0 60"/0 50%

30"/0 2(/'/0

1(/'/0 a% FY2002/03 FY2003104 FY2OO4I05

Ir1 SJstan AllegEtiOl • h:a1cIuslve Eitiderce 0 f\b 6tiderce of DscrininctiOl !ill Fencing I

Note: Data presented are point-ln-tlrne data. Over time, the "Pending" cases would have a finding of "Sustain Allegation", "Inconclusive EVidence", or "No Evidence of Discrimination." Source: Housing Rights Center, May 2005.

Current Fair Housing Profile 6-25 Analysis of Impediments to Fair Housing Choice

Dispositions

The fair housing service providers (HRC, FHF, and FHCSGV)work in partnership with HUD and the State Department of Fair Employment and Housing (DFEH). After a person calls to report a complaint, an interview takes place, documentation is obtained and issues are discussed to decide on the course to proceed. If during case development further investigation is deemed necessary, testing may be performed. Once the investigation is completed, the complainant is advised of the alternatives available in proceeding with the complaint, which include: mediation/conciliation, administrative filing with HUD or DFEH,or referral to a private attorney for possible litigation.

HRC records indicated that mediation/conciliation represented about 14 percent of the cases during FY 2003/04 and FY 2004/05. The data also showed that combined, referrals to attorneys, HUD, or DFEHfor possible litigation or further investigation are also important ways of handling fair housing cases. Between 2001 and 2005, HRC,FHF, and FHCSFVassisted in 52 fair housing case settlements. Discrimination based on familial status was the basis in 27 of these case settlements. The next most frequent basis for discrimination was race, in 11 cases. Combined, these cases received settlements of over $4.6 million.

Figure 6~4: Disposition of Fair Housing Cases

100% 90% 80% 70% 60% 50% 40% 30% 20% 10%

FY 2002/03 FY 2003/04 FY 2004/05

m Successful Conciliation §l Client Withdrew 0 No Action POSSibl~ o Referred to Attomey 0 Referred to DFEH/HUD 0 Pending __ J

Note: Data presented are point-In-time data. Over time, the "Pending" cases would have a disposition of "Successful Conciliation", "Client Withdrew", "No Possible Action", "Referred to Attorney", or "Referred to DFEH/HUD."

Source: Housing Rights Center, May 2005_

6-26 Current Fair Housing Profile City of Los Angeles

6.5.5 Fair Housing Complaints Reported by DFEH

The State Department of Fair Employment and Housing (DFEH) uses a similar process as the fair housing service providers for handling fair housing complaints: intake; filing; investigation; concluatton: litigation; and remedies. However, unlike local fair housing service providers, the DFEHdoes not conduct use on-site investigations. If conciliation fails, the Housing Administrator of DFEH may recommend litigation. DFEH legal staff litigates the case. Based on the option of the parties, the case may be heard before the Fair Employment and Housing Commission (FEHC)or in civil court. The FEHCmay order remedies for out-of-pocket losses, injunctive relief, access to the housing previously denied, additional damages for emotional distress, and civil penalties up to $10,000 for the first violation. Court remedies are Identical with one exception -- instead of civil penalties, a court may award unlimited punitive damages.

Between July 1999 and December 2002, DFEH opened 389 discrimination cases for complaints filed by City of Los Angeles residents. Statewide, 2,611 cases were opened during the same period, indicating 15 percent of the cases came from the City of Los Angeles. In comparison, 794 cases involving County of Los Angeles residents were opened, showing nearly half of the County's cases came from the City of Los Angeles. Specifically:

• Central Los Angeles - 142 cases • East Los Angeles - 16 cases • Harbor - 7 cases • North Valley - 37 cases • South Valley - 86 cases • South Los Angeles - 29 cases • West Los Angeles - 92 cases

The four main motivation biases were race, physical disability, familial status, and national origin. Looking at the race/ethnic composition of the complainants, the majority (75 percent) were reported as 'Other", while about 10 percent of the cases were filed by Hispanics (non-Mexican), 6 percent were filed by Blacks, and less than 3 percent each were filed by Whites and Mexicans. Less than one percent of the complaints were filed by Asians. In terms of resolutions, approximately half of the cases concfuded no probable cause to prove a violation, while about one-quarter of the cases were successfully conctllated.

6.6 Landlord/Tenant Disputes

Nature of Disputes

The City offers tenant/landlord counseling and dispute resolution services through its contract with HRCand its subcontractors (FHF and FHCSFV). Overall, the nature of calls and disputes has been consistent between FY2002/03 and FY2004/05 (Table 6-3). The majority of the disputes were related to evictions (26 percent in FY 2004/05) and repairs/substandard conditions (18 percent in FY 2004/05). In FY 2003/04, HRCand its subcontractors began reporting complaints on harassment. About eight percent of the calls in FY2004/05 were related to harassment.

Current Fair Housing Profile 6-27 Analysis of Impediments to Fair Housing Choice

Table 6-3: Tenant/Landlord Services

Housing Issue Eviction/Notices 2,038 26% 2,039 27% 2,242 26% Harassment ------596 8% 678 8% Security Deposit 546 7% 428 6% 483 6% Rent Increase 831 11% 706 9% 751 9% Repairs 1,411 18% 349 5% 597 7% Substandard Conditions ------885 12% 980 11% Lease Terms 467 6% 552 7% 663 8% Section 8 Information 123 2% ------Late Fees 57 1% ------Illegal Entry 119 2% 100 1% 105 1% General Information 859 11% 926 12% 887 10% Other 1,422 18% 805 11% 1,011 12% Seeking Housing ------182 2% 156 2% Total 7,873 100% 7,568 100% 8,543 100% SOUrce: Housing Rights Center, May 2005

Disposition of Disputes

HRC, FHF, and FHCSFV were able to resolve most of the disputes (Figure 6-5). However, referral to other agencies was sometimes necessary. Especially because 18 percent of the disputes were related to repairs and substandard conditions, about 10 percent of the disputes are referred to the Health and Building & Safety Departments and habitability hotline. Also, some disputes related to rent increases and other compliance issues with the City's Rent Stabilization Ordinance were referred to the Housing Department for enforcement.

6-28 Current Fair Housing Profile City of Los Angeles

Figure 6-5: Disposition of Tenant/Landlord Disputes

100'/0 9)"/0

80%

60%

40%

20%

10%

0% FY 2.(X)2t03 FY 2(X)3f04 FY2OO4I05 ----~~<~"-----.-~~~~~-~~~,~~~~-..1. Oher 11% 7% -~,~.",.~,~~-~~-'~"~~~"-"--~h El2. I-R:: Rental Usting 8% 2% 1% ,_~"rc,_c,.~. .~_.,.,," ""~ __ ~_.T«""''''~~._~~ ·_,_~"'.'"'"""m ...~ ...._~~~~~~_~~_ . • 3. Rent staJilizatico 11% 13% 14% ~'~---'-.~-.. ------.-.,-_.------,--.----_. !ll4. CcnslJ'l1€l' Aflars 0"10 4% 4% .5. &;ala~-----'.,---~-2"h __ ._~N~'_ 2"/0 06. !..ega Assista1Ce 4% 6% 5% ---_ ..-. ------~-.-----.-.-.-~---- -~~~---~o 7. H:!ath/Bt.ilding & Safety 3"/0 9% 10% -_._-._------• 8_ Mer:iatico 1% m9_ Resoll.ed by ~ 00% 56% 56%

Note: Order of data category is numbered from top to bottom. Source: Housing Rights Center, May 2005.

6.7 Hate Crimes

Hate crimes are violent acts against people, property, or organizations motivated by the group to which they belong or identify with. While they have been committed throughout American history, it was not until early in this decade that the federal government began to collect data on how many and what kind of hate crimes are being committed, and by whom.

Hate crimes become a fair housing concern when residents are intimidated or harassed at their residence or neighborhood, which is where the majority of hate crimes occur. Fair housing violations due to hate crimes also occur when people will not consider moving into certain neighborhoods, or have been run out of their homes for fear of harassment or physical harm. The State and Federal Fair Housing Acts makes it illegal to threaten, harass, Intimidate or act Violently toward a person who has exercised their right to free housing choice. Personswho break the law have committed a serious crime and can face time in prison, large fines or both, especially for violent acts, serious threats of harm, or Injuries, In addition, this same behavior may violate similar state and local laws, leading to more punishment for those who are responsible. Some examples of illegal behavior incfude threats made in person, writing or by telephone;

Current Fair Housing Profile 6-29 Analysis of Impediments to Fair Housing Choice vandalism of the home or property; rock throwing; suspicious fires, cross-burning or bombing; or unsuccessful attempts at any of these. 6.7.1 General Trends

According to the FBI annual reports on hate crime statistics, between 1997 and 2002, 2,816 were reported in the City of Los Angeles. The bias motivation was predominantly Race-based(42 percent). The other bias motivations were reported as follows:

• Race - 42 percent • Ethnicity - 20 percent

III Sexual Orientation - 20 percent • Religion - 18 percent

General trends identified in the FBI's Annual Hate Crime reports showed that approximately 30 percent of the hate crimes were committed at the victims' residences and 65 percent of the offenders were White.

Generally, caution should be used when using hate crime statistics, because reporting hate crimes is voluntary on the part of the local jurisdictions. Some states started submitting data only recently, and not all jurisdictions are represented in the reports. Many jurisdictions, including those with well-documented histories of racial prejudice, reported zero hate crimes. Another obstacle to gaining an accurate count of hate crimes is the reluctance of many victims to report such attacks. The City of Los Angeles has somewhat more reliable statistics, because the City has provided outreach and structured a system for reporting hate crimes, and the Los Angeles County Commission on Human Relations also collects detailed data. 6.7.2 los Angeles County Commission on Human Relations

The City of Los Angeles Human Relations Commission works hand in hand with the Los Angeles Police Department to combat hate crimes within the City of Los Angeles. The City's Human Relations Commission provides assistance to victims of hate crimes, who may feel especially vulnerable, and produce a brochure that contains information and contact numbers to various agencies concerned with hate crimes.

Los Angeles County also has a Human Relations Commission that provides information and statistics on hate crimes. The statistics are presented to the Los Angeles County Board of Supervisors each year. The County Human Relations Commission provides support and information on how to deal with hate crimes, including a Hate Crime Victims' Rights video.

The County Commission publishes an annual report of hate crimes reported throughout the County. According to the reports from 2001 and 2002, most hate crimes were motivated by race, ethnicity, or national origin (all of which are referred to as race). While Black residents make up only 10 percent of the County population, 48 percent of the reported racial hate crimes were targeted to Blacks and only 19 percent toward Hispanics who make up 45 percent of the County population.

The County Commission's annual reports also indicate that suspects are consistently male (92 percent in 2002) and are very often between the ages of 18 and 25 (44

6-30 Current Fair Housing Profile City of Los Angeles percent in 2001 and 30 percent in 2002). Most racial hate crimes have taken place in residences, indicating the potential impact of these crimes on fair housing choice. The type of offense seems to depend on the bias motivation, For example, race and sexual orientation are predominantly violent in nature, while religious motivated hate crimes, matnlv against Jewish people, are crimes of vandalism. These statistics are consistent with the statistics reported in the FBI Annual Reports discussed above, 6.7.3 LosAngeles Police Department

The Los Angeles Police Department (LAPD) has implemented a variety of methods of reducing crime and reaching out to neighborhoods. The Department has a Community Relations Section that is responsible for community outreach efforts, and has created 18 area-based hate crime coordinators. The Department has also established a database that tracks the location and type of hate crime committed, The LAPDwebstte also has a page with links to non-profit organizations that offer information and education against hate violence (www.lapdonline.org).

Statistics compiled by the LAPD provide an overview of the climate for hate crimes within the City of Los Angeles. There are four main bureaus that oversee the 18 areas for which hate crimes are reported: Central, South, Valley, and West Bureaus. Each is responsible for overseeing approximately four to five of the eighteen areas. The areas correspond to the Cltv's Neighborhood Service areas as follows:

• North Valley (Areas 17 and 16) • South Valley (Areas 9, 10, and 15) • West LA (Areas 8 and 14) • Central (Areas 6, 7, and 2) • South LA (Areas 3, 12, 13 and 18) • East LA (Areas 1, 4, and 11) • Harbor (Areas 5)

The bureaus correspond to the City's Neighborhood Service areas as follows:

• Valley Bureau - South Valley and North Valley • South Bureau - South Los Angeles and Harbor • Central Bureau - East LosAngeles • West Bureau - West and Central Los Angeles

According to data reported by the LAPD,the majority of hate crimes and incidents from 2001 through 2003 occurred in the Valley (35 percent) and West Los Angeles areas (33 percent). The leading bias motivations were race (47 percent), followed by sexual orientation (21 percent), religion (18 percent, predominantly against the Jewish religion), and national origin (14 percent). The majority of races affected included Whites (34 percent), Blacks (27 percent), Hispanics (18 percent) and other (14 percent).

Further analysis of the hate crime statistics by areas within the bureaus indicate that the majority of incidents/crimes reported came from Area 6 (Hollywood), Area 8 {West Los Anqeles), Area 9 (Van Nuys), and Area 10 (West Valley). In areas with high concentration of minorities, such as East Los Angeles and Harbor areas, fewer hate crimes were reported.

Current Fair Housing Profile 6-31 Analysis of Impediments to Fair Housing Choice

As shown in Table 6-2, familial status, disability (mental or physical), and race are the leading bases of fair housing complaints. However, disability and familial status do not tend to invoke acts of hate, as race, national origin, religion, and sexual orientation do.

The LAPDhas begun to address the high incidence of hate crimes in Los Angeles through a variety of activities, including the creation of the Hate Crimes Task Force. The task force is responsible for reviewing reporting methods, training, and actions taken by the Department whenever a hate crime takes place. Specifically, the Hate Crimes Task force has completed the following:

.. Redrafted the Special Order on hate crimes, which establishes responsibility and accountability for hate crime investigation at a very high level at each station • Developed new and updated existing training materials related to hate crimes • Developed a notebook for investigation of hate crimes and incidents to be used by Department Personnel • Developed the procedures to be used in the field in investigating potential hate crimes • Revised procedures to be used in the reporting, documentation and maintenance of statistical data as it relates to both hate crimes and incidents • Revised the Los Angeles hate crimes brochure, with input and collaboration from the Los Angeles City and County Human Relations Commissions.

6.8 Gang Activities and Housing Choice

The location a person chooses to live is usually based on many different factors, some of which include affordability, job opportunities, proximity to transportation, housing and neighborhood conditions, quality of schools, level of crime, closeness to family and friends. In the City of Los Angeles, one of the major concerns a home-seeker faces is crime; crime that lowers property values, scares newcomers from moving in, and forces people who used to feel safe to move out.

According to the Los Angeles Almanac website, there are a total of 407 gangs in the City of Los Angeles, totaling more than 50,000 members. The majority of gangs are Hispanic (50 percent), followed by Crips (26 percent), Bloods (11 percent), Asians (8 percent), Stoners (4 percent) and Whites (1 percent)." As gangs are well known for marking their territories or neighborhoods, housing choice is impacted as gang members or their friends and families may not live in neighborhoods "controlled" by rival gangs. Non- gang members may not wish to live in gang-infested neighborhoods.

7 www.losangelesalmanac.com.

6-32 Current Fair Housing Profile Impediments and Recommendations

The previous chapters of this report identify barriers to fair housing choice in the City of Los Angeles. Based upon this analysis, the City outlines its actions to address impediments to fair housing in this chapter.

7.1 Potential Impediments

The following is a list of key potential impediments that may exist in Los Angeles.

Housing and Household Characteristics

• Large Households: Large households, particularly those with children, often face discrimination in the housing market. Particularly in the rental housing market, the perception that large households cause excess wear and tear to the units and increased safety and liability issues due to presence of children may lead to some landlords/managers discriminating against these households. This special needs group experienced a higher level of housing problems than other households did. Low income large households, which made up over half of all large households, experienced a much higher rate (85 percent) of housing problems (including include overcrowding, cost burden, or substandard housing conditions) than the general population. Almost all (93 percent) of the large renter-households experienced one or more housing problems.

• Homeless persons: Homeless and formerly persons have a very difficult time finding housing - either accessing emergency shelters or transitional housing facilities, or finding moving from a transitional housing or other assistance program to permanent housing. Furthermore, approximately 48 percent of the homeless persons have one or more disabilities. Housing options connected to supportive services are needed. In addition to affordability issues, this group may also encounter fair housing issues when landlords refuse to rent to them even if they manage to come up with the rent and required deposit. The perception may be that homeless persons are more economically (and sometimes mentally) unstable.

• Seniors: In a tight housing market, seniors, particularly those with disabilities, often face increased difficulty in finding housing accommodations or face targeted evictions. Throughout the State, the vacancy decontrol provisions required in rent stabilization ordinances have the potential to disproportionately impact long- time elderly tenants in rent-controlled units. Typically, these long-time tenants are paying are substantially below-market rents; vacation of these tenants from the units may allow the landlords/managers to capture much higher rents with vacancy decontrol.

Impediments and Recommendations 7-1 City of Los Angeles

Approximately 43 percent of the elderly residents experienced housing problems such as cost burden or substandard housing, but this figure was much higher (60 percent) for elderly renter-households. Overall, elderly households may have fewer housing problems compared to other household types but elderly residents are often less able to make improvements to their housing, deal with a challenging situation (such as confronting the landlords or managers), or to find affordable housing due to limited income and disabilities.

• Single Parents: Some landlords and managers are reluctant to rent to single parents, particularly single mothers, due to concerns about their ability to pay rents and to manage their children. According to the Housing Rights Center (HRC), 26 percent of housing discrimination complaints received in FY 2004/05 was based on familial status, up from 20 percent in FY 2002/03 and 21 percent in FY 2003/04. Much anecdotal evidence cited at the community meetings support these statistics.

II Disability: Fair housing choice for persons with disabilities can be compromised based on the nature of their disability. Personswith physical disabilities may face discrimination in the housing market because of the use of wheelchairs, need for home modifications to improve accessibility, or other forms of assistance. As discussed above, physical disability is one of the greatest cited bases for discrimination according to HRC. Mentally ill tenants also face the barrier of stigmatization and biases from landlords and managers.

The City's Zoning Code and its implementation have also contributed to limited availability of housing for persons with disabilities (discussed later).

• Persons with HIV/AIDS: For persons living with HIV/AIDS, access to safe, affordable housing is equally important to their general health and well-being as access to quality health care. According to a study conducted by Shelter Partnership in Los Angeles in 1999, 65 percent of people with AIDS surveyed had been homeless at some point in their lives and had experienced homelessness an average of 2.3 times in the past three years. The two most significant factors that prevented people with AIDS from getting housing were not having enough money to pay for housing and not knowing what was available or how to access available housing. Stigmatism associated with their illness and sexual orientation also adds to the difficulty of obtaining and maintaining housing.

• Renters with Housing Problems: As with the majority of Southern California communities, renter-households in general are disproportionately affected by the problems of housing cost burden and overcrowding. Homeowners, once they are able to buy a home and settle into their neighborhood, are less likely to face housing discrimination. Renters, on the other hand, may be impacted by housing discrimination issues continuously.

Access to Financing

• Conventional Home Loan Financing - Income Factors: Loan approval rates generally have a positive correlation to household income. Approval rates were highest among the upper-income applicants and lowest among lower-income applicants. The ability of lower-income households in accessing financing is an ongoing housing affordability issue, but not a fair housing issue.

7-2 Impedimentsand Recommendations City of Los Angeles

• Conventional Home Loan Financing - RacejEthnicity Factors: Conventional home loan approval rates vary across racial and ethnic groups. White, Asian, and Joint applicants had the highest approval rates throughout the City while Black applicants consistently had the lowest approval rates. More importantly, approval rates vary widely among ethnic groups within the same income groups. Black and Hispanic applicants frequently received the lowest approval rates regardless of income.

• Government-Backed Loans: Market-rate financing in the conventional loan market is usually unaffordable to lower and moderate income households with high debt-to-income ratio and little equity for downpayment. Government- backed loans are often the only feasible financing option to these households. Therefore, equal access to government-backed financing is important to extending homeownership to lower and moderate income households. Approval rates for government-backed loans tend to vary among ethnic groups of similar income levels. Overall applications for government-backed loans were relatively low for most ethnicities. One exception is Hispanics who are overrepresented in the applicant pool.

• Lenders: Approval rates differ significantly among lenders in Los Angeles, with the largest discrepancy at 34 percentage points.

• Subprime Lending Activity: High approval rates in the subprime market can sometimes be a cause for concern when the target clients are considered high risk. High approval rates may indicate aggressive lending practices. The report found that loan applicants in the Harbor Area had significantly higher approval rates by subprime lenders than all lenders as a whole.

Anecdotal evidence and research indicate that predatory lending is an increasing problem in the Los Angeles area with subprime lenders. For instance, according to HUD's 2000 analysis of HMDA data for Los Angeles County, minorities and residents of low-income neighborhoods are more likely than others to receive loans on the subprime market. UCLA studies also found evidence of a relationship between subprime lending and neighborhood conditions within the City of Los Angeles, namely, that subprime lenders are most likely to receive refinance applications and originate refinance loans in low-income, highly tax- delinquent areas with many elderly and minority residents. It was also found that Blacks are approximately twice as likely as White applicants to refinance on the subprlrne market,

• Purchased Loans: In recent years, the practice of selling mortgage loans by the originators to other lenders is prevalent. Allegations have been made that predatory lending is more likely to occur with this practice. For example, when a lender can reduce or eliminate its risk of lending to lower and moderate income households by immediately selling the loans to another lending institution, it may be more aggressive in lending to households that really cannot afford the mortgage. This practice can be considered a form of predatory lending, Within the City's Neighborhood Service Areas, the percentage of loans purchased reached as high as 43 percent in the North Valley area. Among racial groups, Blacks had the highest percentage of loans purchased, with 17,1 percent, followed closely by Hispanicswith 16.9 percent,

Impediments and Recommendations 7-3 City of Los Angeles

Public Policies

" Capacity to Accommodate Additional Housing: Despite the apparent capacity of the City to accommodate additional housing for all income and special needs groups, a study prepared in 2000 concluded that most of the available development capacity is in small parcels that would be difficult to assemble for feasible residential projects and that differences in building code requirements for commercial and residential development could impede mixed-use projects in commercial areas.

• Zoning Definition of Family: The City's Zoning Code has a restrictive definition of family. If misused by landlords, managers, and sellers, this definition has the potential to discriminate non-traditional families such as gay and lesbian couples, certain cultures that prefer living with extended family members and friends, or college students living together, etc.

D Section 8 Vouchers: Long waiting periods for assistance are common since demand often exceeds the limited resources available. Given the tight housing market, many rental properties have no problem renting out units at market rents, and the rental prices of those properties continue to rise. The financial incentives to participate in the Section 8 program are less attractive in a tight housing market than in a housing market with high vacancy rates. Primarily in economically depressed neighborhoods, where the housing and neighborhood conditions are less than ideal, would voucher recipients likely find rental units that accept voucher payments. Researchers have also found that owners accepting Section 8 vouchers prefer senior households to families. This practice creates a potential fair housing concern,

In addition, as the two most important housing agencies for the City, the Housing Authority and Housing Department have little coordination or interaction.

Fair Housing Services

• Need for Expanded Capacity: The City's geography and dense population make outreach and assistance to all residents difficult. Los Angeles is one of the most diverse and multicultural cities In the country, and has seen significant growth, particularly in the two Neighborhood Service Areas of San Fernando Valley. The community outreach meetings conducted for the report revealed that residents are oftentimes simply unaware of their rights and do not know where to

7~4 Impediments and Recommendations City of Los Angeles

begin when they feel they have been discriminated against. There appears to be a need for additional fair housing service capacity in order to reach more residents and provide more comprehensive service.

• Need for Increased Assistance to Homebuyers: Fair housing services often focus more on the rental market and less on the home purchase market. According to HRC statistics, 89 percent of the calls for general and fair housing inquiries received in FY 2004/05 came from In-place tenants. Although the majority of housing discrimination cases typically arise from rental situations, there are indications that potential homebuyers have experienced discrimination as well, as discussed in the report.

• Limited Number of Fair Housing Service Providers: Only three fair housing service providers serve the entire County of Los Angeles - Housing Rights Center, Fair Housing Council of San Fernando Valley, and Fair Housing Foundation. With a population of over 9,500,000 residents, significant burdens are placed on these three agencies.

Each of these three fair housing councils provides services for specific subregions within the County. The limited number of qualified fair housing service providers offers Httle choice for the City.

7.2 Actions

Housing and Household Characteristics

• Begin implementation of the ReasonableAccommodation Ordinance in 2006. • Explore solutions for addressing the 600-foot distance requirement between recovery homes and schools.

Access to Financing

Predatory Lending: In response to the rising concerns regarding predatory lending practices in the Los Angeles area, the City adopted the Anti-Predatory Loans Ordinance. However, a similar ordinance adopted by the City of Oakland was challenged in court. Supreme Court decision on the Oakland ordinance indicated that local jurisdictions have no authority to impose additional restrictions beyond state and federal regulations on lenders. The City of LosAngeles will pursue:

Impediments and Recommendations 7-5 City of Los Angeles

B Further investigation to develop an ordinance to curb predatory lending practices in the City but meet the legal challenge; • Establish other programs/activities to increase awareness and reporting of predatory lending practices; • Work with fair housing service providers to expand outreach to homebuyers; and/or a Work with housing advocates to lobby for stronger State legislation to curb predatory lending.

Public Policies

Affordable Housing Policies and Incentives: Many of the City's fair housing issues, particularly those faced by renters, stem from a lack of affordable housing choice for lower income households. The shortage of affordable housing is not a fair housing concern in itself; however, this situation created a market condition that is conducive to discriminatory practices. With an abundance of willing takers and short housing supply, landlords are more likely to discriminate and screen out "undesirable" tenants.

In addition to providing direct subsidies for the construction of affordable housing using a variety of funding sources (e,g. HOMEand redevelopment housing set-aside funds), the City will develop appropriate incentives and policies to expand affordable housing opportunities, The City may explore the following options:

• Inclusionary housing policy (under study); • Commercial linkage fees;

B Housing options for the homeless, including emergency shelters, transitional houslnq, supportive housing, and permanent housing; • Use of City-owned vacant/underdeveloped properties for affordable housing; and/or • Incentives to consolidated small lots for affordable housing. (While the City has already developed a range of affordable housing initiatives to increase the supply of affordable housing, many of such initiatives require parcels of adequate sizes. A package of incentives may be necessary to encourage lot consolidation.)

Coordination with Housing Authority: As an agency receiving HUD funds, the Housing Authority of the City of Los Angeles (HACLA) is also required to actively further fair housing choice through: 1) completion of an Analysis of Impediments to Fair Housing Choice; 2) Actions to eliminate identified impediments; and 3) Maintenance of fair housing records. HACLA is responsible for conducting its own AI to evaluate impediments specific to the agency. However, HACLAhas yet to conduct the analysis and prepare the AI.

As part of the City's AI, general impediments relating to the policies, procedures, and operation of HACLA have been identified. The City will coordinate with HACLA to address the following:

• Coordinate the distribution of fair housing materials that cover not only the federal but also the State protected classes; and • Arrange with the fair housing service providers to offer fair housing education workshops with Section 8 and public housing residents.

7-6 Impediments and Recommendations City of Los Angeles

Fair Housing Services

Fair Housing Services Review: In order to better design a fair housing program that addresses the specific needs of residents, the City should periodically review the scope of work for fair housing services.

Discussions with the fair housing service providers indicate that the appropriate scope of work is often a balance between needs and funding availability. If funding is available, the fair housing service providers recommend the following areas of improvements/additional services:

• Proactive outreach to immigrant communities, persons with disabilities, and gay/lesbian/transgender/bisexual persons. Due to staffing constraints, the service providers have been focusing on responding to complaints, rather than proactively reaching out of special groups. Proactive outreach is particularly important when serving the gay/lesbian/transgender/bisexual community since the legislations protecting these groups are relatively new.

• Increased budget for sales audits. Sales audits were conducted in FY 2003/04 and FY 2004/05. Of the 40 audits, half were found to have potential problems. However, due to budgetary constraints, sales audits were not included in the scope for FY 2005/06.

• Technology improvements. Increasingly, residents are contacting the service providers via the internet. Improvements to the fair housing websites can assist residents in accessing information, filing cornptalnts, and tracking status of inquiries.

• Special study to evaluate the effectiveness of outreach approaches. The service providers are serving a very diverse population in the City of Los Angeles. The appropriate and effective outreach approaches may vary based on the special characteristics of each group.

To improve fair housing services, the City should:

• Initiate a comprehensive review of its contract requirements for providing fair housing services. • Establish quantitative and qualitative performance measures and research into comparable cities' fair housing services.

Impediments and Recommendations 7-7 City of Los Angeles

" Consider expanding scope of work for future years to address discriminatory practices in the homebuying process. Specifically, audits/testing may need to be performed periodically for home sales and lending. " Restructure its RFP for fair housing services to allow for more competition in proposals from service providers in order to expand capacity. " Continue the Don't Borrow Trouble Campaign.

7-8 Impedimentsand Recommendations Appendix A Community Workshop Comments Fair Housing Workshop Notes (Valley) City of Los Angeles June 9,2004

Attendees: 3 people, Spanish interpreter, Suzette from City

Fair Housing Council of the San Fernando Valley (FHCSFV) • Diana C. Bruno, Executive Director " Sharon Klnlaw, Assistant Director " Hermes Ayala, Bilingual Housing Discrimination Assistant

Summary of Comments

" Top two types of housing discrimination in San Fernando Valley are familial status and disability. " FHCSFVsent out a mailing to churches in the African American community and have noticed an increase in cases related to race, although not a significant increase. There is no particular African American community in the area, scattered, and have seen those communities that had been predominantly African American change in recent years. " Most recent complaints come from higher income African Americans. " Discrimination against African Americans is under reported and outreach to them is not as it should be. Difficulties in finding areas to outreach; do not have an African American newspaper to outreach in. Resigned to facing housing discrimination and therefore do not file complaint. .. Found that there is an increase in discrimination in notices, most have been cleaned up in the past, and occurrences have increased. Although standard forms are used, found that people hand write restrictions or preferences or type an additional sheet which is then attached. " Have received many complaints due to rent Increases, mainly from monolingual Spanish speakers. • More difficult to test or audit mortgage lenders because of use of credit scores. " FHCSFVdid conduct a sales audit. Used experience testers. Found two cases of race discrimination where the African American tester was only shown a particular list, while the white tester was told that although there isn't anything now, the new MLS listings will be coming out soon and that they should meet and will show those listings. " Case example: Race discrimination against African American Realtor and buyer. Realtor and client approaches sales office of condo and the salesperson tells them that the condo is no longer for sale but is for lease. However, checked MLS listing after incident and property was still listed for sale. m Have had a good relationship with Housing Authority (HA) but last 8-9 months HA has not been very responsive to reasonable accommodations requests. " Reasons for non-response could be the lack of education around the issues, and/or because of continual employee turnover, those trained leave and new people do not get the training they need since trainings occur every few years. • Code Enforcement division is difficult to work with, laws are interpreted differently. Issue with sending investigators who do not speak Spanish to monolingual Spanish speaking homes. " Have seen illegal rent increases; increase in rent greater than the allowed three percent. Although complaint is filed, nothing is done by investigators.

Appendix A Community Workshop Comments • Suggestion that Code Enforcement needs to be consistent with Housing Quality Standards, There is a case where the carpet removed and has not been replaced. Family is left with a concrete floor that is painted. • Issue with undocumented residents who face discrimination or fair housing issues and do not file a complaint in fear of retaliation such as being reported to INS, • There is a lack of legal representation for low income and disabled residents, especially mentally disabled. Many of the agencies are understaffed. • Case example: Person with mental disability who is on SSI and has very low income had an unlawful detainer prepared that was not legible, They had to find funding to just amend the document to make it legible. It is difficult to find representation for this person. • There outreach to the Latino population has increased tremendously due to additional of Spanish speaking staff member. • There is a perception by inspectors that for certain groups, certain substandard conditions are okay. • Have found that inspectors who do good work do not do that same level of work In certain areas, Monolingual Spanish speakers are most affected. • Issue regarding enforcement process and who is responsible for enforcement. • There is no enforcement for student status complaints by the City Attorney. Students must file a complaint and take to small claims court. Another group that has difficulty finding legal representation. • Case Example: Red neon line case. Property owner has drawn a red neon line around the common area in which kids can not cross or be punished. Currently in litigation. • Issue with property insurance being dropped for providing chHd care in unit or accepting Section 8 vouchers.

Community Workshop Comments Appendix A Fair Housing Workshop Notes (West LA) City of Los Angeles June 10, 2004

Attendees: 4 people and Suzette from City

II Karina Arabolaza, Housing Rights Center

D Maria Graciano, LAHD- Rent Stabilization Division

II Anne Friedrich, Menorah Housing Foundation .. Sherrie Routier, HACLA- Mar Vista Gardens

Summary of Comments

II Menorah Housing Foundation is a non-profit affordable housing developer with 14 buildings (1000 units) scattered throughout LA County. Their focus is trying to diversify the residents in their buildings which is difficult because of low vacancy rates and the reality of who applies for the units. Certain areas have a majority of whichever race lives in that area. This organization does all it can to outreach to a diverse population. Implements a variety of measures to try to get diversity such as lottery system and date and time stamp. They have 50 percent of residents who receive Section 8. They have not had problems getting property insurance but have seen the cost increase.

D The Housing Rights Center refers Section 8 residents to HACLA in landlord/tenant issues but will open up a case file for potential discrimination cases. " Sherrie manages the conventional public housing units at Mar Vista Gardens. HACLA has an internal grievance policy. Residents can come into any office and file a written complaint. The first step is an informal conference with the site management. If it is not resolved there it goes to the corporate office where a formal meeting is held with corporate. If it is not resolved there, there is a judicial hearing. Residents may seek outside mediators such as the Housing Rights Center because there is information they do not want the HA to find out such as violating their eligibility (such as having an extra person in the unit). Also there HACLA is a bureaucracy where case loads are great or the issue may not be a fair housing issue. Some residents expect shampooing of carpet or painting of unit every few years. Complaints are kept in the individual's case file. If goes higher, there would be a file in the downtown office and HUD gets them when it reaches that level and keeps those statistics. There has been an increase in complaints regarding rent increases and 504 compliance. HA does not have the funding to address all the 504 compliance requests fast enough. HUD has raised the fair market values three times last year, increasing the amount residents have to payout of their pockets for rent. This affects those who receive "Ceiling rents." A 1-bedroom apartment going for $200 is now $540. The Deferral program is effective August 1st, 2004. Those with no legal status are no longer eligible for housing. If one person was born here, receive prorated rent benefit (rent benefit for that one person). Only 12 units in Mar Vista that have families with all members being non-documented. HACLA no longer has preferences for particular types of applicants.

Appendix A Community Workshop Comments Fair housing documents distributed by HACLA has the federal law however, in trainings, state and federal laws are included. HACLA holds a number of Section 8 vouchers each year, places them in a bank so that it can be reopened in order to diversify Section 8 recipients. The top cases the HRC receive are due to disability and familial status

Community Workshop Comments Appendix A Fair Housing Workshop Notes (Central LA) City of Los Angeles June 24, 2004

Attendees: Approximately 10-15 citizens, representatives from HRC, City Housing, Housing Authority, other advocacy groups (total approximately 20).

II Karina Arabolaza, Housing Rights Center

II Shirley Ann Hiffacker, Bernardi MPC

II Lourdes Olivares, Inquilinos Unidos

II Maribel Gomez, LA City Housing Department

II Eyn Chavis, LA City Housing Department

II Serina Cannon, HACLA

Summary of Comments

II Rental agreement dispute: - level of service from landlord a problem - landlord did not make timely repairs, would enter apartment without notice

II Pico-Union area issues, as described by Humberto Camacito (resident) - Not enough family units - Parking deficit - Rental costs very high (about $1100 for one bedroom apartment) - Overcrowding in individual units; multiple families in unit - Access to transportation a problem

II Koreatown area issues, as described by Yohngsohk Choe (resident) - Rental costs high - Rental contracts often misunderstood by non-English speakers; suggestion that contracts should be available in multiple languages - Comment that civil code that applies to all business contracts exists, but enforcement is the problem . - Homeowners' association requirements prohibitive - Comment that questions or concerns should be brought to HRC or LA City

II Suspected discrimination by landlords - Against young renters (age discrimination) - Against mother with teenage sons (familial status discrimination) - But how can these incidents be proven if not explicit?

II Housing Authority/Section 8 - Representative states that any discrimination against Section 8 voucher holders would be investigated

II Recurring comment: people must speak up about their problems, otherwise there -Is no record and no way to help these individuals]

II Landlord/tenant problem: - Repairs requested, including lock on window to be fixed - Landlord does not make repairs in timely manner - Burglar gets in through window, steals < $5k worth of stuff

Appendix A Community Workshop comments - Can this cost be recuperated from landlord?

• Housing Department hotllne problems: - Examples of people calling in with questions, but because operator did not speak their language, they would hang up on caller

• Possible age discrimination example - Sole surviving senior told that she must have family member to handle financial if she were to die; refusal to sell house to her - Response that life insurance should cover this - Is this age discrimination?

Community Workshop Comments Appendix A Fair Housing Workshop Notes (East LA) City of Los Angeles June 29, 2004

Attendees: Approximately 6 citizens; representatives from City Housing, HRC, and other advocacy groups (total approximately 10).

iii Everado Alvlzo, Housing Rights Center

iii Suzette Flynn, LA City Housing

II Cruz Diaz, HIVjAIDS advocacy group

II Barbara Shultz, Legal Aid Foundation

Summary of Comments

iii Landlord issues If tenant has major sanitation problems, is this a case for eviction?

III Wheelchair accessible units Disability modifications considered too expensive for interiors City grants for exterior modifications

III Senior Citizen Housing Is it discriminatory? It needs to be State certified if it is going to be exclusive Some are federally subsidized, requires that both partners be classified as "senior citizen"

III "Ghettoization" of low-income neighborhoods The closing of Section 8 Vouchers will contribute to this

B On the other hand, gentrification is a problem too example: residential hotel once protected by Affordable Housing Covenant was bought out, tenants evicted example: Boyle Heights

iii Tenant-Landlord disputes Violation of rent-control laws LA Housing has several methods of complaint available; an inspector is also assigned

III Neighborhood clean-up Code Enforcement o Cleaning areas around houses Gangs

II Relocation fee (Landlord question) Contributed to independent escrow account Tenant uses funds once they move

II Signs of Fair Housing Problems: Discrimination against large families o "Not enough room"

Appendix A Community Workshop Comments Confusion regarding occupancy standards Restrictive rules on children's activities Harassment of HIV/AIDS + tenants

• Assistance for HIV / AIDS + persons HOPWA HALSA - legal services

• Housing search - problems Fraud: o search fee often not reimbursed, even though housing never found o problem is that many landlords/companies list only with these services Credit checks can add up and become expensive Suggestion for central dearing house of credit checks so that they can be re- used and save searchers money

Community Workshop Comments Appendix A Appendix B Fair Housing Survey Fair Housing Survey for Los Angeles City Residents

The City of Los Angeles is conducting a study to evaluate fair housing conditions in the City. We want to hear about your experience with housing discrimination. Please complete the st survey below and return it by July 31 . If you want additional information about the survey, please can the Los Angeles Housing Department at (213) 808-8648. Thank you for your time.

Fair housing is a right protected by Federal and State laws. Each person is entitled to equal access to housing opportunities regardless of race, color, religion, sex, national origin, disability, familial status, marital status, age, ancestry, sexual orientation, source of income, or any other arbitrary reason. Fair Housing laws apply to rental housing, homes for sale, advertising. home loans, and home insurance.

Signs of discrimination include: • The rent or deposit quoted is higher than advertised • The manager says the unit is rented but the ad or sign is still posted • The manager says "You probably won't like it here", "We've rented out the family units", or "There is no place for your children to play" • A real estate agent keeps "steering" you to look for houses in neighborhoods different than the ones you desire and you think you can afford • The manager denies your request to make minor modifications to your unit to accommodate your disability • The manager refuses to make repairs to your unit or harasses your children - but doesn't do this to other tenants who are a different race or ethnicitv than you

1. Please indicate the ZIP Code of your residence _

2. Do you believe housing discrimination is an issue in your neighborhood?

DYES ONO

3. Have you ever experienced housing discrimination in the City of Los Angeles?

DYES 0 NO 0 NOT SURE (If YES or NOT SURE, please proceed to Questions 4 through 9. If NO, please skip to Question 10)

4. Who do you believe discriminated against you? o a landlord/property manager 0 a real estate agent o a mortgage lender 0 a mortgage insurer o a city staff person 0 other: _

5. Where did the act of discrimination occur? o an apartment complex 0 a condo development o a single-family neighborhood 0 a public or subsidized housing project o a trailer or mobile home park 0 when applying for city programs

6. On what basis do you believe you were discriminated against (check all that apply)?

DRace o Color o Religion

Appendix B Fair Housing Survey o National Origin o Ancestry o Gender o Marital Status o Sexual Orientation o Age o Family Status o Source of Income o Disability (e.g. single-parent with children, family (e.g. welfare, unemployment (either you or someone close with children or expecting a child) insurance) to you) o Other (please explain): )

7. How were you discriminated against?

8. Have you ever been denied flexibility ("reasonable accommodation") in the rules, policies, or practices at your residence that you need because of a disability (for example, permission to install grab bars, ramps, etc.)?

DYES ONO

If YES, what was your request?

9. If you believe you have been discriminated against, have you reported the incident?

DYES o NO

If No - Why not? o don't know where to report o afraid of retaliation o don't believe it makes any difference o too much trouble o other: _

10. Has any hate crime been committed in your neighborhood in the last five years? (A hate crime is a crime, including intimidation or harassment, against a person or their property motivated by hostility toward their real or perceived attributes. See list below.)

DYES ONO

If YES, what was the basis (check all that apply):

DRace o Color o Religion o National Origin o Ancestry o Gender o Marital Status o Sexual Orientation o Age o Family Status o Source of Income o Disability o Other (please elaborate: _

Fair Housing Survey Appendix B The completed survey can also be dropped off at the Fair Housing Workshops, faxed to (213) 808-8999, or mailed to the City Housing Department:

Attention: Suzette Flynn Los Angeles Housing Department, Policy and Planning Unit 1200 West 7th Street, 9th Floor Los Angeles, CA 90017

For additional information about your fair housing rights, please call the Housing Rights Center at 1-800 477-5977.

""Please complete and return the survey by July 31stl Thank you!*

Appendix 8 Fair Housing Survey Appendix C Department of Employment and Fair Housing Statistics Discrimination Cases (Litigation)

Service Cases from 1999/00 - Area 2001/02 Central 142 East LA 16 Harbor 7 North Valley 37 South Valley 86 South LA 29 West LA 72 Total City 389 LA County 794

Los Angeles County

Of the 794 total cases reported for the County, 31 percent were for eviction, 22 percent harassment, 17 percent refusal to rent, and 17 percent unequal terms.

The four main motivation biases were race (23 percent) physical disability (20 percent), familial status (19 percent), and national origin (13 percent).

Looking at the racial groups making up the complainants, the majority (75 percent) were reported as 'Other", while nearly 10 percent of the cases were filed by Hispanlcs-non Mexican, 6 percent were filed by African Americans, and less than 3 percent each were filed by Caucasians, Mexicans, and Mexican Nationals. Less than one percent of complaints filed were of Asian descent.

In terms of resolutions, 51 percent of the cases concluded no probable cause to prove a violation, while 26 percent were successfully conciliated. Withdrawals also occurred at eight percent with a resolution and five percent without a resolution. Another six percent of the case dispositions revealed that the complainant was not available for DFEHto continue the process.

Cases by Race

East S. South West Race Central Harbor N. LA Valley Valley LA LA African Amer. 6% 19% - 8% 3% 24% 4% Asian ------Other 66% 56% 100% 76% 77% 76% 78% Hispanic-non 15% 13% - 8% 9% - 6% Mexican Caucasian 4% - - - 3% - 8% Polynesian - - - 3% - - - Native Amer. ------Filipino ------3% Mexican 2% - - 5% 1% - -

Appendix C DFEH Statistics Amer. Mexican Nat. 6% 13% - - 6% - - Multiple ------1% CBA tabulation of statistics provided by DFEH.

Cases by Discrimination Type

East N. S. South West Type Central Harbor LA Valley Valley LA LA Refusal to Rent 18% 20% 29% 23% 16% 7% 15% Eviction 29% 40% 14% 36% 22% 45% 31% Unequal Terms 17% 15% - 15% 20% 14% 16% Harassment 25% 20% - 13% 26% 20% 19% Unequal Access to - 29% - - facilities - - - Denied Reasonable - - 29% - 7% - Accommodation - CSA tabulation of statistics provided by DFEH.

Cases by Bias Motivation

East S. South West Type Central Harbor N. LA VaHey Valley LA LA Race/Color 25% 36% 25% 29% 19% 28% 16% National ortcm 18% 9% - 8% 15% - 6% Rellqlon - 9% - - - - - Phys Disability 18% 14% 38% 18% 13% 21% 29% Sex-harassment - - - 8% - - - Sex-orientation - - - - - 10% 5% Familial Status- 14% 27% 25% 18% 24% 23% 18% children Association - - 12% 8% - - - CBA tabulation of statistics provided by DFEH.

Case Dispositions

Successful No Probable Cause Area Conciliation to Prove a Violation

Central 27% 54% East LA 33% 56% Harbor 33% 67% North Valley 7% 64% South Valley 29% 51% South LA 21% 66% West LA 21% 60% LA County 26% 51%

DFEH Statistics Appendix C DFEH Statistics by Neighborhood Service Area

As each neighborhood service area has experienced unique trends, the following discussion looks more closely at the statistics described above along with demographic insight into the community.

Central

As the third most populous NSA, 142 cases were filed in the Central area during the past three years; with the majority (61 cases) filed in FY2000/01. While the area's population is largely Hispanic (45 percent), Hispanics only represent 23 percent of the cases filed. The cases were based mainly on race/color (25 percent), physical disability (18 percent), national origin (18 percent), and familial status (14 percent). Based on the above, discrimination identified in the cases took the form of eviction (29 percent), harassment (25 percent), refusal to rent (18 percent), and unequal terms (17 percent).

Zip codes 90004/90020 (Hancock Park), 90046 (Mount Olympus), and 90057 (Westlake) consistently represented casesfiled within this area.

East LA

Sixteen cases were filed in the East LA area during the past three years, each year experiencing a gradual increase. While the population is predominantly Hispanic (71 percent), the area has experienced relatively little growth, with only a one percent increase in the last 10 years. Hispanics represent 25 percent of the cases filed in this area, while African Americans, who represent only 2 percent of the population comprise 19 percent of the cases filed In this area. The cases were based mainly on race/color (36 percent), familial status (27 percent), and physical disability (14 percent). Based on the above, discrimination identified in the cases took the form of eviction (40 percent), refusal to rent (20 percent), harassment (20 percent), and unequal terms (15 percent).

Zip codes 90026 (Silverlake), 90039 (Atwater Village), and 90042 (Highland Park) consistently represented cases filed within this area.

Harbor Area

Seven cases were filed in the Harbor area (the least populated of the seven areas) during the past three years, with the majority (5 cases) being filed in 2000/01. The cases were based on physical disability (38 percent), familial status (25 percent); and race (25 percent).

Discrimination cases were mainly due to refusal to rent (29 percent), unequal access to facilities (29 percent), and denial of a reasonable accommodation (29 percent). 100 percent of the race categories affected was recorded as "other. /I The area is mainly Hispanic (56 percent) and White (25 percent), and while African Americans make up 8 percent of the population they did not represent any of the cases filed with DFEH.

Zip codes 90731 and 90732 (Terminal Island/San Pedro) represent all of cases filed within this area.

Appendix C DFEH Statistics North Yalley

Thirty seven cases were filed in the North Valley area, which has experienced the largest percentage of growth in the last decade (16 percent), with a gradual decrease each year. The cases filed were largely based on race (29 percent), physical disability (18 percent), and familial status (18 percent).

Discrimination cases were mainly due to eviction (36 percent), refusal to rent (23 percent), unequal terms (15 percent), and harassment (13 percent). African Americans and Hispanic non Mexican's represented approximately 8 percent of the cases each, while Mexican Americans represented 5 percent.

Zip codes 91311 (Chatsworth) and 91342 (Lakeview Terrace/Sylmar) consistently represented cases filed within this area.

South Yalley

Eighty six cases were filed in the South Valley area, which experienced the second largest percentage of growth in the last decade (14 percent) and represents the second most populous area. With a gradual decrease in cases filed each year, the cases in this area were largely based on familial status (24 percent), race (19 percent), national origin (15 percent) and physical disability (12 percent).

Discrimination cases were mainly due to harassment (26 percent), eviction (22 percent), unequal terms (20 percent), and refusal to rent (16 percent). The area is largely Caucasian (50 percent) followed by Hispanic (34 percent) and Hispanic non Mexican1srepresented approximately 9 percent of the cases each, while Mexican Nationals represented 6 percent.

Zip codes 91405 (Van Nuys) and 91423 (Sherman OaksjVan Nuys) conslstentlv represented cases filed within this area.

South LA

Though it is the largest area in terms of population, only twenty nine cases were filed in the South LA area during the past three years, with a gradual increase each year. The cases were mainly based on race (28 percent), familial status (23 percent), physical disability (20 percent), and sexual orientation (10 percent).

Discrimination cases were mainly due to eviction (45 percent), harassment (20 percent), unequal terms (14 percent), refusal to rent (7 percent), and denial of a reasonable accommodation (7 percent).

This particular area has undergone significant transition from what used to be predominantly African American community to one that is now predominantly Hispanic (57 percent), though it is still the only area that is largely African American (37 percent). While 24 percent of the cases in this area were reported by African Americans, none of the cases filed came from Hispanics.

Zip codes 90008 (Crenshaw) and 90037 (South Central) conslstentlv represented cases filed within this area.

DFEH Statistics Appendix C West LA

Approximately 72 cases were filed in the West LA area during the past three years. While there has been a gradual decrease in the number of cases filed each year, the majority of cases for all three years on the Westside were based on physical disability (29 percent), familial status (18 percent), and race (16 percent). It is Interesting to note that while the majority of hate crimes involving discrimination against sexual orientation have occurred In this area, only 5 percent of the cases filed with DFEHin this area involve sexual orientation.

Discrimination cases in West LA were largely due to eviction (31 percent), harassment (19 percent), unequal terms (16 percent), and refusal to rent (15 percent). The groups affected were Caucasians (8 percent), Hispanic non Mexican (6 percent), and African Americans (4 percent). This is the only area that reported cased filed by Filipinos (3 percent). This is the only area that is predominantly Caucasian (61 percent), with few Hispanics (17 percent). Thus, the proportions of racial composition of cases filed are slightly skewed.

Zip codes 90045 (LAX/Westchester), 90066 (Mar Vista), 90210 (Beverly Glen), and 90036 (Park La Brea), and 90291 (Venice) consistently represented cases filed within this area.

Appendix C DFEH Statistics Appendix D Public Review of Draft AI Public Review of Draft AI

The Draft AI was available for public review for December 21, 2005 and February 1, 2006. Shelter Partnership (letter attached) provided comments on the AI. All comments have been incorporated into the Final AI.

Public Meeting

The public meeting was held before the Affordable Housing Commission on January 26, th 2006 at the Los Angeles Housing Department, 1200 W. 7th Street, 9 Floor, at noon. Representative of the Housing Rights Center provided comments on the Draft AI.

Liam Garland (Housing Rights Center): The Draft AI recognizes a need to expand the capacity to provide an increased level of fair housing services. The AI also identifies a need to increase the number of service providers in order to create competition among the existing service providers and therefore a potential increase in the amount and quality of services. The Housing Rights Center is concerned that by dividing the diminishing funding among an increased number of service providers would result in a decreased level of services instead.

Members of the Affordable Housing Commission discussed the issues regarding fair lending practices, level of services and community outreach, funding, and complaints and resolutions. Suzette Flynn (City of Los Angeles Housing Department), Liam Garland - (Housing Rights Center), Barbara Schultz (Fair Housing Foundation), and Veronica Tam (P&D Consultants) provided responses to questions of the Affordable Housing Commissions. A copy of the meeting minutes is attached.

Appendix D Public Review of Draft AI DEPARTMENT OF EXECUTIVE OFFICES CITY PLANNING CITY OF Los ANGELES MICHAEL J. LOGRANDE 200 N. SPRlNG STREtf, ROOM 525 CALIFORNIA Los ANGELES, CA 90012-4801 DIRECTOR AND (213) 978-1271 6262 VAN NUYS BLVD., SUITE 351 VAN NUYS, CA 91401 ALAN BELl., Ale? DEPUTY DlRECTOR ClTY PLANNING COMMISSION (213) 978-1272 RENEE DAKE WILSON USA M. WEBBER, AlCP PRESIDENT DEPUTY DIRECTOR DANA M. PERLMAN VICE-PRESlDENT (213) 978-1274 ROBERTLAHN EVA YUAN-MCDANIEL DAVID H. J. AMBROZ ERIC GARCETTI DEPUTY DIRECTOR MARIA CABILDO MAYOR (213) 978-1273 CAROliNE CHOE RICHARD KATZ FAX: (213) 978-1275 JOHN W. MACK MARTA SEGURA - INFORMATION JAMES K. WlLUAMS www.planning.lacity.org COMMISSION EXECUTIVE ASSISTANT Il (213) 9713-1300

March 18, 2014

Los Angeles City Council C/O City Clerk's Office 200 N. Spring Street, Room 395 ~. Los Angeles CA 90012 Council File No. 14-0118

Attention: Ad Hoc Committee on Community Care Facilities

RE: COMMUNITY CARE FACILITIES ORDINANCE

Dear Honorable Members of the Ad Hoc Committee on Community Care Facilities:

In response to a March 5, 2014 request by the Chair of the Ad Hoc Committee, Councilman Mitchell Englander, the Department of City Planning has conducted a statewide review of zoning code definitions that typically regulate shared or group housing arrangements. These include definitions of family, single-housekeeping unit, boarding house, community residence and related terms.

Background

In the City of Los Angeles, like most cities, the ability to reside in a particular building or neighborhood is governed by the Zoning Code (Chapter 1 of the Municipal Code). The purpose of the Zoning Code is to protect the health, safety and welfare of citizens, while implementing the intent of the City's General Plan.

The Zoning Code defines a dwelling unit as "a group of two or more rooms, one of which is a kitchen, designed for occupancy by one family for living and sleeping purposes" (emphasis added). If a group household meets the Code's definition of family, it has the right to reside in any residential zone and precludes the group from Los Angeles City Council - Ad Hoc Committee on Community Care Facilities January 27, 2014 Page 12

being defined as something else, such as a boarding or rooming house. The notion of a family is therefore central to establishing legal residential occupancy, particularly in one- and two-family zones (where boarding or rooming houses are prohibited").

Discussion of Key Issues Finding the right balance between providing a variety of housing opportunities and protecting neighborhood character is an important but difficult task. This report attempts to further the discussion by analyzing the City's current definitions of family and boarding or rooming house and then laying forth possible alternatives.

;,Deffhhion of Family ,',In 2906, the Zoninq Code's definition of family was changed in response to concerns that Jt was not in compliance with state law. The definition of family, which had prevtously included limits on unrelated persons, was changed to the following: c.' ',' ~:,~Family:One or more persons living together in a dwelling unit, with common I.;!access to, and common use of all living, kitchen, and eating areas within the nJdwelling unit. 'u This definition allows for a diversity of alternative family arrangements in residential zones. However, concern has been raised for many years by neighbors and enforcement agencies about impacts on single-family neighborhoods from housing types associated with group living and community care that may be covered by this definition.

For example, a household must only demonstrate that common areas of the unit (living, kitchen and eating) are being accessed and used by all. The Department of Building and Safety and Office of City Attorney have reported that this definition blurs the line between a family residence and a commercial boarding or rooming house, leading to enforcement challenges.

Family and Single Housekeeping Units - Definition Options Unlike other states, allowable definitions of family in California are limited by a 1980 State Supreme Court decision (Adamson v, Santa Barbara). Combined with federal and state fair housing law, cities in California are left with a relatively narrow range of options for differentiating a legitimate group family arrangement from a commercial group boarding or rooming house. A great many creative options have already been considered throughout this process.

As a result of the Adamson decision, a definition of family in California cannot limit the numbers of persons but must instead rely on whether the household unit functions as a family. Factors such as the household's social, economic, and psychological

1 Boarding or rooming houses are permitted by-right in R3 or more permissive residential zones, or in R2 zones having a side lot line adjoining a lot in a commercial or industrial zone, udner certain conditions. Los Angeles City Council- Ad Hoc Committee on Community Care Facilities January 27, 2014 Page 13 commitments to each other, or whether they shared expenses, rotated chores, and ate evening meals together were critical to the Adamson decision. A group that meets the functional equivalent of a family is often referred to as a "single housekeeping unit" in zoning codes.

Most California cities have explicitly included a definition of single housekeeping unit or have incorporated its meaning into their definition of family. Determining the actual function of a household living in a shared housing arrangement becomes the key point around which to search for alternative provisions to potentially add to the City's definition of family.

To gain a better appreciation of the various definition options available to the City, staff surveyed the zoning code of eleven local jurisdictions (see Exhibit A). The following is a list of individual concepts, or "markers", that are used in family or single-housekeeping unit definitions in those jurisdictions:

1. Shared household activities and responsibilities such as meals, chores, and expenses (experiences, etc.) (SJ, F, 0, P, NB, CoO, CM)* 2. An interactive group of persons (P, SJ, NP, CoO, CM)* 3. Residents are relatively permanent or non-transient (0, P, SJ, CoO, CM)* 4. The residents themselves must decide who will be a member of the household (NB)* 5. Living together based on personal relationships (LB) 6. Residents represent an integrated economic unit (SD) 7. Residents are the functional equivalent of a traditional family (SJ, P, NB)2 8. (or) Residents have the character of a generic family (0) 9. In compliance with the provisions of the California Uniform Housing Code (regarding occupancy limits) (S) 10. Residents have access to all areas of the unit (SD) 11.Six (6) or fewer persons living together within the meaning of California Health and Safety Code Sections 1267.8,1530.5,1566.3,1569.85 or any other statute or regulation which expressly requires that six (6) or fewer persons living together shall be considered a family for the purposes of any law or zoning ordinance which is related to the residential use of property. (F) 12.Includes a Domestic Violence Safe House (SL) 13.The existence of individuals to facilitate the functions of a single housekeeping unit does not disqualify the group from being a single housekeeping unit. (F) 14.Has a single, written lease (NB) 15.Members have some control over who becomes a member of the single housekeeping unit (eM, N)

2 The initials stand for various California jurisdictions that include each marker in their definition of family, including San Jose (SJ), Fresno (F), Oakland (0), Pasadena (P), Newport Beach (NB), Long Beach (LB), San Diego (SD), State of CA (S), Santa Monica (SM), Los Angeles (LA), San Leandro (SL)., Orange County (OC), City of Orange (CoO), Costa Mesa (CM). Los Angeles City Council- Ad Hoc Committee on Community Care Facilities January 27, 2014 Page 14

Each of the above "markers" attempts to add detail as to what it means to operate as a functional family unit. Some jurisdictions have also attempted to say explicitly what does not constitute a family. Examples include: '

A. Does not include a state-licensed Community Care Facility with seven or more persons. (SL) B. Does not include larger institutional group living situations such as dormitories, fraternities, sororities, monasteries, nunneries, residential care facilities or military barracks, nor does it include such commercial group living arrangements as boardinghouses, lodging houses and the like. (LB) C. Does not include incidental domestic servants and temporary non-paying guests (0) * These markers are included in the 2013 City Council proposed Community Care Facilities Ordinance.

Compared to other cities in California, Los Angeles' definition of family is simpler and more clear cut, but is also more permissive. Householders only need to share use of shared living and dining areas to be considered a family, despite their personal relationship (or lack thereof). Most other cities surveyed above included at least one or more statements about the actual bonds (economic and/or emotional) between householders. A more detailed analysis of potential changes to the City's family definition is located in the final section of the report.

Definition of Boarding or Rooming House The current zoning code definition of boarding or rooming house (BRJ-f) dates from 1956. BRHs have changed significantly since that time. A BRH used to be associated with (usually) older homes, where rooms or beds were rented out, sometimes along with meals or other services. They often accommodated new arrivals to town or migrant labor and were much more common than today. BRHs usually include shared dining, kitchen and bath facilities.

The current (1956) Zoning Code definition of boarding or rooming house is:

Boarding or Rooming House (BRH): A dwelling containing a single dwelling unit and not more than five guest rooms or suites of rooms, where lodging is provided with or without meals, for compensation.

The following is a list of common concepts, or "markers", that are used in boarding or rooming house definitions across the State (in no particular order):

A. Three or more rooms are rented individually or separately (SO, 0, P, CoO) B. Rented to tenants under separate rental agreements (SO, P, CoO) C. Provisions for five but not more than fifteen guests (Fresno) D. A house, or portion thereof, where food and lodging are provided for long-term occupancy (LB) E. Where lodging is provided with or without meals for compensation (F) Los Angeles City Council- Ad Hoc Committee on Community Care Facilities January 27, 2014 Page 15

F. Whether or not an owner, agent, or rental manager is in residence (P) G. With or without individual or group cooking facilities (P) H. A residential building with common cooking and eating facilities (SM) I. Where a room or any portion of a room is rented for periods of generally at least thirty days (SM) J. Where there is on-site facility management (SM) K. Means a room or suite of rooms, not including a kitchen, designed or occupied as separate living quarters (0) L. Access may be had to all such rooms (0) M. Access through common entrance (OC)

Some jurisdictions have also attempted to say explicitly what does not constitute a BRH. Examples include:

A. Housing protected by federal or state law, including housing for persons protected under the Fair Housing Act (42 USC section 3604 (f» and the California Fair Housing Act (California Government Code section 12920 et seq.), or housing otherwise subject to the City's Separately Regulated Use regulations in Chapter 14, Article 1, shall not constitute a boarding and rooming house. (SO) B. Does not provide care service (LB) C. Not to include a hotel, motel, emergency residential shelter, group housing facility or rest home. (F) D. Excluding such rooms where they accommodate a total of three or fewer paying guests within a One-Family Dwelling Residential Facility (0) E. Not a single-family unit (or single-housekeeping unit) (S)

By the standards of other California cities, the current definition or BRH is fairly encompassing in that it captures any dwelling unit with at least one guest room" for rent. BRHs in other cities often begin with a minimum of three guest rooms or, in some cases, the number of guests. While many definitions have no upper limit on guest rooms, the Los Angeles definition stops at five, after which the dwelling is defined as a hotel or apartment hotel. A more detailed analysis of potential changes to the City's BRH is located in the final section of the report.

General Plan Alignment In order to adopt a revised ordinance, under Charter Sections 556 and 558(b)(2), the City Council must find that the proposed ordinance is in substantial conformance with the purposes, intent and provisions of the General Plan.

Multiple General Plan policies and objectives align with efforts to protect single-family neighborhoods from out of character uses. They also call for healthy and sanitary housing. However, the Housing Element of the General Plan specifically calls for

3 A guest room is defined in the Zoning Code as a "any habitable room except a kitchen, designed or used for occupancy by one or more persons and not in a dwelling unit." Los Angeles City Council- Ad Hoc Committee on Community Care Facilities January 27, 2014 Page 16 identifying "modifications needed in the Zoning Code to facilitate innovative housing types, such as shared housing, congregate living, cooperative housing, modular and prefabricated housing, and group quarters" (Program 67).

Potential Impacts on Housing Opportunity Like many cities, agreements between friends or even strangers to share the costs of housing are fairly common in Los Angeles. The typical shared housing situation involves roommates who are jointly responsible for the entire rent and usually select prospective replacement roommates themselves. However, also common (particularly in a down economy) are situations where property owners try to make use of extra bedrooms by renting it out to persons aiming to save money by renting a room rather than an entire unit. A third category may be referred to as cohousing, which is an intentional grouping of often like-minded individuals.

Shared housing arrangements could potentially be impacted by changes to the definition of family and boarding or rooming house. But predicting potential outcomes from the addition of specific provisions to the definition of family (or BRH) is exceedingly difficult. However an analysis of census data and current rental market information may give some indication of the scale and scope of current shared housing utilization.

In 2012, according to the Census Bureau, there were about 1.3 million households in Los Angeles. Non-family households (defined by the census as a group unrelated by birth, marriage, or adoption) made up 40 percent of the total. Most of the non-family households were people living alone, but almost 130,000 households were composed of multiple people living together in arrangements where no one was related. An additional 82,000 people in Los Angeles live in group quarters", The group quarters definition takes in the more than 900 licensed community care facilities, but not the array of unlicensed shared housing types.

To gain better insight into the current rental market, DCP staff investigated current shared housing options for rent. On Craigslist, a popular online site for finding housing for rent, a recent search for the central Los Angeles area resulted in about 2,400 listings for apartments for rent. However, a separate section of the site listed more than 1,400 rooms or shared housing for rent. This high ratio of rooms or shared housing for rent gives an indication of the supply and demand for shared housing in the current rental market. Many Angelenos are evidently looking for roommates to share rent or mortgage and there is certainly a high need for affordable places to dwell.

Given the lack of more precise break-downs of the numbers and different types of shared housing arrangements, it is difficult to make assessments on potential impacts of

4 Group Quarters is defined by the Census Bureau a place where people live or stay, in a group living arrangement, that is owned or managed by an entity or organization providing housing and/or services for the residents. Group quarters include such places as college residence halls, residential treatment centers, skilled nursing facilities, group homes, military barracks, correctional facilities, and workers' dormitories. Los Angeles City Council- Ad Hoc Committee on Community Care Facilities January 27,2014 Page 17

any changes. Similarly, potential benefits of changing the definition of family and/or boarding or rooming house are also difficult to determine. Generally, there is likely to be an inverse relationship between providing greater enforcement leverage and impacts on shared housing arrangements. Finding that balance is at the heart of the City's efforts on this issue.

Analysis of Options Changes to the definition of family are needed to clarify the distinction between a singJe- family residence and a boarding or rooming house. However, any change is fraught with important considerations. Unfortunately, fully evaluating potential impacts of any change is difficult. In addition, the serious fair housing, legal and General Plan consistency concerns around any change in definitions must be fully understood before making decisions that could impact many households.

Family and Single Housekeeping Unit Options With regards to options to alter the definition of family or single-housekeeping unit, each of the potential "markers" described on page 3 highlights slightly different aspects of the functional family relationships. While none of the options would give enforcement agencies a simple quantitative measurement to be able to make distinctions between a family residence and a BRH, adding some combination of additional markers would allow for a more thorough, and therefore usable, definition of what it means to be a single housekeeping unit (and therefore one-family dwelling) in Los Angeles.

In January 2013, the last proposal in front of full City Council proposed the following definition for family (in strikeout):

FAMILY (Proposed) - One or more persons living together in a dwelling unit as a single housekeeping unit., with common access to, and common use of alillving, kitchen, and eating areas within the dwelling unit.

The proposed change to the definition of family would simply defer to the single housekeeping unit concept. The January 2013 proposed definition for single housekeeping unit is:

Single Housekeeping Unit - Any household whose members are a non- transient interactive group of persons jointly occupying a dwelling unit, including . joint access to and use of all common areas including living, kitchen, and eating areas within the dwelling unit, and sharing household activities and responsibilities such as meals, chores, expenses and maintenance, and whose makeup is determined by the members of the unit rather than by the landlord, property manager, or other third party. This does not include a Boarding or Rooming House.

This definition includes four markers of a single housekeeping unit:: 1) be non-transient (defined as 30 day occupancy or less in the Zoning Code), 2) be an interactive group, 3) Los Angeles City Council - Ad Hoc Committee on Community Care Facilities January 27, 2014 Page 18 share household activities and responsibilities such as meals, chores, expenses and maintenance, 4) have its makeup determined by the members of the unit rather than a third party. The first three are widely used across California. The fourth marker had been included by Newport Beach in their Ordinance but the impact of their Ordinance is is under a legal cloud due to a recent Ninth Circuit case (Pacific Shores vs. Newport Beach). The fourth marker would also likely have been the most impactful on shared housing across the city and had drawn the most public criticism.

Boarding and Rooming House Options In our survey of BRH definitions, a variety of markers were used. However, the most common was the presence of three or more guest rooms (used by San Diego, Pasadena, Costa Mesa and City of Orange). This type of definition allows for the rental of one or two rooms to non-family members without being deemed a BRH.

By comparison, the current City definition of BRH is encompassing of any dwelling unit that also includes one guest room (or suite of rooms) for rent. By requiring only one guest room to become a BRH, rather than three or four, Los Angeles already has a stricter definition than most jurisdictions. For that reason, it may be determined that no change to the definition of BRH is necessary as long as changes are made to the definition of family.

On the other hand, Ad Hoc Committee members have stated that it is not their intention to regulate the rental of an extra bedroom. Therefore, City Council may consider changing the definition to align it with other cities that define BRHs by the presence of three or more guest rooms.

If Council wishes to take this approach, it may also want to make clear that the functional equivalent of up to two guest rooms are permitted in dwelling unlts". If so, Council could amend the definition of dwelling unit, which would make it clear that up two bedrooms could be separately rented out as part of a single dwelling unit. The City's current definition of dwelling unit could be amended as follows (proposed language in underline):

Dwelling Unit - A group of two or more rooms, one of which is a kitchen, designed for occupancy by one family for living and sleeping purposes or one family and not more than two bedrooms used as guest rooms for use by non- transient renters.

5 The term "guest room" has specific connotations in the Los Angeles Zoning Code, including not being located as part of any dwelling unit. Therefore the term "functional equivalent" is proposed at this time, to connote rooms being used for single occupancy (like a guest room) without the requirement to be located outside of a dwelling unit. Los Angeles City Council - Ad Hoc Committee on Community Care Facilities January 27, 2014 Page 19

Optional Shared Housing Definition for Persons with Disabilities It should be understood that changes to "tighten" the definition of family could potentially cloud the legality of some current Hvingarrangements. Some cities have attempted to explicitly carve out alternative family uses that fill the space between a single-family dwelling and BRH, either based on habitation by persons with disabilities or small scale shared housing (addressed above).

If the definition of family is made more restrictive, to the point where existing persons with disabilities are likely be affected disproportionately, DCP recommends adding a specific provision making it clear that a group home for persons with disabilities is permitted. Such a definition might look like this:

Community Residence: A single dwelling unit maintained and operated to provide a group living arrangement for persons with disabilities on a non-transient basis, which may also be occupied by professional support staff provided by a sponsoring agency.

If City Council decides to permit shared or community residences, the Department of City Planning would investigate optional methods of permitting them, balancing the needs for protecting neighborhood character and providing housing options.

Conclusion As the report demonstrates, there are significant considerations and challenges to making changes to fundamental zoning code definitions that determine who can live where. Impacts on housing policy and enforcement capabilities are difficult to assess. Legal and policy concerns restrict the ability to craft "bright line" options with regards to the definition of family. And any changes that would impair the ability of persons with disabilities to live in group settings should be offset by specific carve-outs.

Further consideration of definitions should be made in light of broad policy direction provided by the Community Care Facilities Ordinance Ad Hoc Committee. Once the policy directions are set, staff can provide proposed definitions for any Ordinance.

For any questions, please do not hesitate to contact Matthew Glesne in the Department of City Planning, at (213) 978.2666 or [email protected].

Sincerely, fkt<-~ Alan Bell, AICP Deputy Director of Planning

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