LOS ANGELES — State Treasurer John Chiang and Los Angeles City Attorney Mike Feuer announced a legal settlement to preserve bond-financed affordable housing units in Los Angeles.
“The San Regis case should send a strong message to all that we will vigorously oppose attempts to abandon agreements that protect affordable housing for our seniors, our veterans, and our working poor,” Chiang said.
In 2001, the owners of the San Regis apartment complex used $23.6 million in tax-exempt bond proceeds from the state to acquire and rehabilitate the 390-unit facility in the Los Angeles neighborhood of Van Nuys. In exchange for the public subsidy, the owners agreed to maintain 78 units as affordable housing for 55 years.
In 2005, the San Regis property was purchased by San Regis LLC, which included the Colorado Public Employees Retirement Association and the Utah State Retirement Investment Fund as investors. San Regis LLC filed a lawsuit in 2016 claiming that the earlier agreement with the city and treasurer’s office allowed them to convert the affordable housing units to more costly, market-rate housing after just 15 years, or as soon as bonds used to finance the project were paid off.
The settlement agreement guarantees homes at the San Regis apartment complex in Van Nuys will stay affordable for another 55 years.
“We fought for a year and a half and remained steadfast to keep these 78 homes affordable, because we’re in the grip of a housing crisis and every affordable home counts,” said Treasurer Chiang. “We can’t afford to lose one, let alone 78 units. Keeping these apartments affordable represents a victory for the elderly, veterans, the disabled, and the working poor.”
Housing advocates and lawyers, as well as religious and neighborhood leaders, supported Chiang and Feuer in their efforts.
“The settlement reached between San Regis, the City, and the State shows how creative thinking can solve a problem in a way that benefits everyone,” Feuer said. “Now, without any further cost to city taxpayers, 78 units of greatly-needed affordable housing in the San Fernando Valley will be preserved for decades longer than originally planned."
The settlement provides for the refinancing of the existing bonds for the property, allows for the further rehabilitation of the project, establishes a new requirement that the units be kept affordable through the year 2073, and further ensures that 20% of any units built in the future be restricted to 50% of the area median income.
“The affordable housing we provide is often all that stands between our most economically vulnerable citizens and homelessness,” Chiang said.
