A GENTRIFICATION CAUTIONARY TALE The Garcetti-fication of Los Angeles: A Gentrification Cautionary Tale FEBRUARY 2019 ACKNOWLEDGMENTS Housing Is A Human Right thanks Coalition to Preserve L.A. Executive Director Jill Stewart and Communications Director Ileana Wachtel for their contributions to this report. Housing Is A Human Right, based in Los Angeles, is the housing advocacy division of AIDS Healthcare Foundation—the world’s largest HIV/AIDS medical-care organization, serving more than one million people in 43 countries. Throughout the U.S., AHF patients have been negatively impacted by rising housing costs and gentrification, which threatens their health. Housing Is A Human Right advocates for stronger tenant protections, fights gentrification, and advances progressive housing policies. For more information, go to the website housinghumanright.org. ABOUT THE AUTHOR This report was researched and written by Patrick Range McDonald, special investigator, Housing Is A Human Right. McDonald was an award-winning investigative journalist at L.A. Weekly, receiving the “Journalist of the Year” award from the Los Angeles Press Club and “Public Service” award from Association of Alternative Newsmedia, among other honors. TABLE OF CONTENTS The Garcetti-fication of Los Angeles: A Gentrification Cautionary Tale I. Los Angeles as a Cautionary Tale 1-5 II. The Foundation for a Gentrification Crisis 6-10 III. A Gentrification Template for a New L.A. 11-13 IV. A Wave of Gentrification 14-23 V. A Gentrified L.A. 24-28 VI. An Opportunity to Lead 29-31 I. Los Angeles as a Cautionary Tale Downtown Los Angeles at Dusk Outside Los Angeles City Hall, on an the city’s land-use regulations and then overcast summer evening in 2017, Mayor approving developers’ requests for general Eric Garcetti stood on a blue-carpeted plan amendments, zone changes, and other stage, flanked by City Council members, entitlements—Garcetti and the City Council and smiled broadly. It was a big day. In had turned L.A. into a lucrative paradise for front of several thousand people, with a right real estate investors and developers, where hand raised, Garcetti had just been sworn they could construct anything they wanted, in for a second term as mayor of the nation’s wherever they wanted. second largest city. AECOM, a multinational engineering firm, and Westfield Property “The planning process in the city of L.A. has Management, a global real estate company, gotten out of balance,” former L.A. City each contributed $50,000 to help pay Planning Commissioner Mike Woo told the for the high-powered ceremony. In the Los Angeles Times in 2017. “There shouldn’t audience, Garcetti’s political patrons stood be so many requests for discretionary clapping, many of them snapped pictures. decisions moving through the system.” The mayor acknowledged the crowd with a quick thumbs up, and then launched into a With spot-zoning approvals in hand, florid, 20-minute speech. upscale developers such as Colony Holdings, Kanon Ventures, Carmel Partners, Eyeing a teleprompter, Garcetti spoke and Merlone Geier Partners were free to grandly. L.A., according to the mayor, was build immense luxury-housing complexes in now “freer, safer, prouder.” The public’s faith middle- and working-class neighborhoods in L.A. government had been restored. The in Koreatown, South L.A, and the San self-centered, self-serving culture at City Hall Fernando Valley, where a chain reaction had been changed. Homelessness and rising of skyrocketing rents, displacement, and rents were problems, he acknowledged, gentrification would undoubtedly explode. but building up L.A. would provide many solutions, making “our dreams” come true. “Los Angeles,” Garcetti said with a grin, “By 2018, L.A.-area renters “we are builders, and we have begun that shelled out a staggering work—and we mean to keep at it.” It was perhaps the most accurate claim in his entire $40.4 billion to keep roofs inaugural address. over their heads” Of all the promises Garcetti had uttered over the years, unleashing a tidal wave It was as if City Hall had reverted to a of high-end development was the one Wild West outpost, where deep-pocketed pledge he had most made good on. By developers with high-priced lobbyists repeatedly indulging in a controversial routinely shelled out campaign cash to practice known as “spot zoning”—ignoring the mayor and council members while the 2 politicians returned the favor with spot- evictions, unwanted displacement, and zoning approvals—a sketchy arrangement sudden homelessness. People’s worlds were known as “pay-to-play.” In 2019, an FBI collapsing—and a humanitarian crisis was corruption probe, which first focused on unfolding. L.A. Councilman and Planning and Land Use Management Committee Chairman “Los Angeles has proven that it is not yet Jose Huizar and then expanded to other able to practice development without government officials, would rock City Hall. displacement,” the Los Angeles Tenants Union declared 2017. “Imagined housing During Garcetti’s first mayoral term, glass- construction of the future relies on today’s and-steel luxury-housing towers and practices of mass eviction and harassment.” gigantic, market-rate apartment complexes started to pop up all over L.A.—and By the end of 2017, the median rent for developers and real estate investors, who a one-bedroom in L.A. was a whopping had contributed millions in campaign cash $2,200, ranking the city sixth among the to Garcetti and City Council members over top 10 U.S. metropolises with the highest the years, were raking in billions. By 2018, median rents. Between July 2013 and July L.A.-area renters shelled out a staggering 2017, during Garcetti’s first term in office, $40.4 billion to keep roofs over their heads. landlords utilized a little-known state law, Curbed L.A., a real estate site, noted, “By the 1985 Ellis Act, to evict tenants in 4,869 comparison, that’s more than 423 of the rent-controlled units, according to the companies on the most recent Fortune 500 Coalition for Economic Survival and Anti- list earned in yearly revenue.” Eviction Mapping Project. With an average household size of 2.8 persons in L.A., that’s Garcetti’s “build, baby, build” agenda was at least 13,633 people who were forced out eagerly embraced by City Council President of their homes. Herb Wesson, Councilman Huizar, and nearly all of the other council members. Overall, the L.A. Times found that between But it wasn’t executed without devastating 2001 and 2016, a stunning 20,000 rent- consequences. The mayor didn’t use his controlled units had been yanked off the inauguration to go into the disastrous market. “Looking to cash in on a booming details, but housing justice and tenants real estate market,” the Times reported, “Los rights groups knew what was happening. Angeles property owners are demolishing Even City Hall databases, created by the an increasing number of rent-controlled mayor’s “innovation team,” showed what buildings to build pricey McMansions, was emerging. Middle- and working-class condos and new rentals, leading to Angelenos, particularly people of color hundreds of evictions across the city.” and immigrants, were getting slammed by a citywide gentrification crisis. And From 2016 to 2017, L.A.’s homeless with that came soaring rents, record-high population spiked by 16 percent: 33,138 3 “Gentrification was Peter Moskowitz, who wrote the well- regarded book How to Kill A City: ravaging Los Angeles ... Gentrification, Inequality, and the Fight for and Garcetti and the City the Neighborhood, argue that developers and real estate investors are now leading the Council were aggressively gentrification charge. fueling it” “To explain gentrification according to men, women, and children were living the gentrifier’s preferences alone,” Smith on the streets—and homeless advocates wrote in his landmark book The New Urban believed the real number was much larger. Frontier: Gentrification and the Revanchist The Los Angeles Community College City, “while ignoring the role of builders, District, for example, found that 19 percent developers, landlords, mortgage lenders, of its 230,000 students had been recently government agencies, real estate agents— homeless in 2017. Even worse, more than gentrifiers as producers—is excessively 1,200 homeless people had died on the narrow. A broader theory of gentrification streets of L.A. County between 2017 and must take the role of the producers as well 2018. as the consumers into account, and when this is done it appears that the needs of Gentrification was ravaging Los Angeles— production—in particular the need to earn in 2018, the Downtown L.A. ZIP code profit—are a more decisive initiative behind 90014 was ranked by RENTCafe as the gentrification than consumer preference.” most gentrified neighborhood in the entire nation. And Garcetti and the City Council, Lured by favorable local and state through their backroom land-use policies, government policies such as tax subsidies, were aggressively fueling it. They were, in zone change approvals, and entire rezoning fact, engaging in government-sanctioned of neighborhoods, developers and real gentrification. It was something the media estate investors jump into inexpensive urban often overlooked, and many Angelenos areas before younger people gentrify a didn’t fully understand. community—after all, properties will be less expensive. Developers, with the help In L.A., and other U.S. cities, younger of local and state politicians, then fire up people looking for a cheap neighborhood gentrification themselves with their luxury- to live are no longer the underlying force housing complexes and top-dollar rents. in gentrifying middle- and working- Other landlords in the neighborhood class communities. The media still frames invariably follow suit, jacking up rents— gentrification that way, but noted scholars, one way or another—at their apartment such as the late Neil Smith, the prominent buildings.