Worried about rising rents, an L.A. councilman calls for ‘anti-displacement’ zones

Los Angeles City Council President Herb Wesson called this week for the rejection of a proposed 577-unit housing project, saying the city should go further by establishing “anti-displacement zones” around certain market-rate housing developments.

In a letter sent Tuesday to the South Los Angeles Area Planning Commission, Wesson said the six-story, market-rate project known as District Square would result in higher rents for the area’s low-income households, displacing “lifelong community residents.” District Square was originally supposed to be a two-story shopping center with a Target and a Ralphs supermarket when it was approved in 2010, he said.

“We voted as a council for a development that would improve, not displace, the community,” Wesson said. “We have no need for a six-story development consisting of 577 luxury apartments that will be unaffordable to most of the neighborhood’s current residents.”

Wesson said in his letter that he would not consider supporting District Square unless it has a “significant” number of units set aside for low-income residents. He also said he would unveil a proposal in coming days for capping rents on properties within a two-mile radius of projects like District Square and protecting renters from “predatory” rent hikes.

“Bringing in 577 market rate luxury residential units does not build up or benefit the community,” he wrote.

How an anti-displacement zone would work, and how long it would take to craft such a measure, is far from clear. Wesson spokesman Ed Johnson said the proposal would “in all likelihood” cover the entire city, but that his boss first wants to consult his colleagues. Johnson said Wesson is still trying to determine what projects would trigger the creation of such zones.

The city already has an ordinance that limits rent hikes in apartment building constructed before October 1978. Gov. Gavin Newsom intends to sign a bill limiting rent hikes to 5% plus inflation starting Jan. 1. Still, Wesson’s statements come at a time of growing anxiety about rising housing costs and the arrival of new development in South Los Angeles.

Damien Goodmon, executive director of the Crenshaw Subway Coalition, filed one of two challenges to the project, saying it would inspire nearby property owners nearby to boost rents and put new pressure on the region’s lower income black and Latino households.

On Wednesday, Goodmon said he is “cautiously optimistic” about Wesson’s statements.

“We’re fighting for the last black community in this great city and can’t afford to demand anything less than exactly what is necessary for us to stay here,” he said.

Planning department officials said they don’t expect District Square to cause any “direct” displacement, since it is planned on an empty lot. Meanwhile, other residents have complained to the city that the project, planned at Crenshaw and Obama boulevards, is twice as big as the one pitched to the community a decade ago.

The area planning commission has postponed a vote on District Square until November. Stacey Brenner, who represents District Square LLC and developers Mark and Arman Gabay, had no immediate comment on the letter from Wesson, who is running for a seat on the Los Angeles County Board of Supervisors.

Leonora Camner, managing director of the pro-housing group Abundant Housing LA, said she supports his push for more affordable units inside District Square and is interested in learning more on Wesson’s anti-displacement efforts. Nevertheless, she said her organization disagrees with Wesson’s statement that South L.A. has “no need” for hundreds of new market-rate homes.

“A very big factor in the lack of affordability in housing is that we do not have enough of it,” she said. “So while we recognize the need for affordable housing, we need to also make sure we are producing housing at all income levels.”

District Square has had a turbulent history at City Hall spanning more than a decade.

In 2010, the City Council signed off on more than $26 million in grants and loans for the project. Despite that assistance, the project stalled, with Target and Ralphs dropping out.

Since 2015, the city’s Economic and Workforce Development Department has sent seven default notices to the Gabays informing them they had failed to meet their financial obligations. Two of those notices, covering $6.3 million in loans, are still outstanding, according to department spokeswoman Jamie Francisco.

District Square was dramatically reworked and identified by city officials as the first project in Los Angeles to be processed under rules established by Senate Bill 743, a law passed in 2013 to streamline approval of certain types of development.

Under SB 743, District Square LLC does not need to comply with provisions of the California Environmental Quality Act, since it is near an Expo light rail station and complies with planning rules for the neighborhood, officials said. Vince Bertoni, director of the Department of City Planning, signed off on District Square in June, determining that it is indeed exempt from the state’s signature environmental law.

Goodmon filed one of two appeals challenging Bertoni’s decision, arguing that South L.A. needs subsidized, not luxury, housing. He said the city should stop doing business with Arman Gabay, who was charged with bribery and wire fraud last year in an unrelated case involving government leases awarded by Los Angeles County.

Gabay, who has spent years working on the District Square project, has pleaded not guilty in the criminal case, which is slated to go to trial in March.