Business & Economy

LA still seeks ways to pay for seismic retrofitting

LA needs to retrofit thousands of apartment buildings against an earthquake but landlords say they'll have to pass on costs to their tenants.
LA needs to retrofit thousands of apartment buildings against an earthquake but landlords say they'll have to pass on costs to their tenants.
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Los Angeles officials want thousands of older apartment buildings to be reinforced against an earthquake, but haven’t figured out the best way to pay for it.

Property owners have said they can't absorb the cost of retrofits — potentially hundreds of thousands of dollars for larger buildings — and will have to raise rents. Tenant’s rights groups counter that L.A. is already one of the most unaffordable places to live.

“Financing is the part that is going to give us the most heartache here, potentially,” said Councilmember Felipe Fuentes during the city's Housing Committee meeting Wednesday.

One idea the committee considered was helping property owners obtain financing through their property taxes. Participants in the state's Property Assessed Clean Energy program, or PACE, would repay their loans for seismic retrofits through an assessment added to their property tax bill for up to 20 years.

L.A. is already participating in the PACE program for energy-efficient and water conservation projects, but the City Council will need to pass a resolution allowing the city to opt-in for seismic retrofits.

Talks about financing are taking place as Mayor Eric Garcetti’s office is drafting an ordinance that would mandate the retrofits.

"The bottom line is an earthquake is indiscriminate," said Councilmember Gil Cedillo who chairs the housing committee. "It will make us all poor and homeless if we don't prepare for it."   

Tenants’ advocates urged committee members on Tuesday to bar any pass-through of repair costs, which is allowed under city laws.

"What good is it for these buildings not to fall down if people can’t afford to live in them?" said Steve Diaz of the Los Angeles Community Action Network.

But Beverly Kenworthy of the California Apartment Association, which represents landlords, said not all of its members can pay for retrofitting by themselves.

"For some people, it'll be extremely hard," Kenworthy said.

The city estimates that 15,000 of the city’s most vulnerable buildings are “soft-story” wood structures — the first level is open parking or commercial space — that were erected before 1978. Because of the date they were built, the units fall under the city’s rent-stabilization ordinance. Landlords who own buildings that fall under that rent-stabilization ordinance can only raise rents by 3 percent each year. This means landlords collect less rental income, and some have said they can't afford the retrofitting expenses.

Thalia Polychronis of the Mayor’s office told the housing committee that apartments need to be fixed soon. 

"So,” Polychronis said, “we do not have a situation where many of these buildings come down during an earthquake, and these units disappear entirely.”