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									Creating, Preserving, and Improving
Housing Through Community
Economic Development
By Elena Popp and Francisca Gonzalez Baxa
[This article was first published in 33 CLEARINGHOUSE REV. 668 (Mar. – Apr. 2000)]

Elena Popp is a staff attorney and Francisca Baxa is directing attorney, Community Economic Development
Unit, Legal Aid Foundation of Los Angeles, 8601 South Broadway, Los Angeles, CA 90003; 213.640.3884;
epopp@LAFLA.org; fbaxa @LAFLA.org.
        “Poverty in America... has always been with us,... and it will always be with us,” said
the lecturer, who had joined the war on poverty in the 1960s, was a legal services attorney in
the 1970s, and later became a professor in order to train “poverty lawyers.”1 Twenty students
sat transfixed. His opening statement did not dampen their enthusiasm. Fifteen years later one
member of that poverty law class is a legal services “lifer”—a lawyer who intends to make
legal services a permanent career and who, like most of her colleagues, is determined to help
improve the lives of low-income persons. Her lengthy case list proves that legal intervention
has positive impact, but she is aware that for every person the agency is able to assist,
thousands go without any assistance.
        Legal services attracts attorneys with vision. Some of us believe in the legal and
economic systems in this country and want to facilitate access to the benefits of those systems
to the poor. Others think that both the economic system and the justice system are flawed and
look for opportunities to make fundamental changes (on our own time and/or within Legal
Services Corporation restrictions). Whatever their vision, many who join legal services
programs have enthusiasm but little understanding of how to make an “impact.”
        Most of us wonder if we can affect our clients’ lives in ways that run deeper than
unlawful detainer actions and welfare case complaints. Some file impact litigation, while
others choose legislative advocacy. Others choose a combination of strategies called
community economic development (CED), which recognizes that developing economic
opportunities for our clients necessarily precedes justice and equality. Economic opportunity
means jobs that pay a living wage, quality education, stores and markets that carry quality
products, banking services, access to credit, and housing that is decent, safe, and sanitary.
        In this article we highlight how the Legal Aid Foundation of Los Angeles (LAFLA)
has used CED strategies to create, preserve, and improve housing in low-income
communities. We describe some collaboration that has revitalized neighborhoods,
strengthened communities, and built, maintained, and improved affordable housing.

I.          Community Economic Development

  We dedicate this article to the memory of Julia Davis, who served as president of the Holiday Venice Tenant
Action Committee from 1995 until her death from breast cancer in February 1998. Davis was a strong and
inspirational leader. Her participation in the 1996 budget process was instrumental in preserving the funding that
led to the preservation of thousands of units of affordable housing.

CED_cpih_eng.pdf                                              1
            CED is an advocacy strategy with these core principles:

                   •   Strive to increase the economic wealth and power in a community.
                   •   Promote self-determination—leadership, vision, and direction must derive
                       from the client.
                   •   Identify resources required to meet community needs and then prioritize these
                       needs to improve residents’ quality of life. Such needs include jobs, housing,
                       child care, social services, and cultural programs.

                   •   Identify, access, and make use of financial and other resources for the com-
                       munity’s benefit.
                   •   Make central the goals of collaboration and active participation by the com-
                       munity, government, and private industry.
                   •   Tap into skills and expertise, both legal and non legal, that are out there.
       We assess or measure the success of work against these criteria. Likewise, we
evaluate each of the case studies that follow against these criteria.
        The CED practitioner is as interested in how the work is carried out as in the outcome.
A successful practitioner does not do all the work for her clients but rather helps clients do for
themselves. Practicing CED basically requires strong communication skills—the ability to
collaborate with a diverse group of people. The practitioner also must have patience,
creativity, a strong interest in client education activities, and the ability to identify and recruit
other resources. Since CED is multifaceted and most successful when different tools and
strategies are utilized, a CED practitioner is a mediator, educator, negotiator, transactional
attorney, litigator, legislative analyst, and lobbyist.

        The substantive legal areas most commonly associated with practicing CED are
corporate, contract, real estate, business, and tax law. CED, however, is a combination of
strategies that an advocate can apply to any substantive area of law.2
        The projects we discuss here will show how practitioners use these basic skills and

II.         Community Economic Development in Housing
       In the context of housing, CED revolves around creating new units and preserving and
improving existing units. Creating affordable housing means constructing new housing where
no housing exists, rehabilitating private, for-profit (usually dilapidated) housing, converting it
from private to nonprofit use, and developing financial and other resources to facilitate

       The preservation of housing, on the other hand, refers primarily to stopping efforts to
convert privately owned government subsidized housing to market-rate housing, but CED

 Nona Liegeois et al., Helping Low Income People Get Decent Jobs: One Legal Services Program’s Approach,
33 CLEARINGHOUSE REV. 279 (Sept-Oct. 1999).

CED_cpih_eng.pdf                                             2
work also includes preservation efforts for public and private rent-controlled housing.
Besides creating and preserving housing, the CED team seeks to improve housing quality and
the tenants’ quality of life. Severe habitability problems, mistreatment by management and
management staff, lack of economic opportunities, and shortage of programs and services
often concern tenants.
        The CED team carries out all three— creation, preservation, and improvement—by
working with grass-roots community-based organizations, tenant organizations, or groups of
local residents.

       Attorneys in the LAFLA CED team work with community-based nonprofit housing
developers to create new funding streams to develop and rehabilitate housing and collaborate
with community-based nonprofit housing developers to build new affordable rental housing
and develop new homeownership opportunities.

        LAFLA’s CED attorneys, representing tenants who live in private developments with
code-enforcement problems, force the owner to make repairs and/or force a sale to a
nonprofit developer or tenant-controlled nonprofit organization.3 They represent tenants living
in subsidized developments, where attorneys work to maintain affordability or to transfer
ownership to tenant organizations or to nonprofit organizations endorsed by the tenants.4
They represent residents in public housing in order to encourage tenant participation in the
development of public housing authority (PHA) policy and enforcement of U.S. Department
of Housing and Urban Development (HUD) regulations. And they represent local community
residents to ensure that redevelopment plans increase and improve the housing stock.

III.        Neighborhood Revitalization and Affordable Housing Development

        We at LAFLA represent community-based organizations, tenant groups and com-
munity development corporations interested in developing new housing units, rehabilitating
dilapidated housing, or otherwise revitalizing communities. We give legal and technical
assistance at every stage, from assessing organizational readiness to the closing of permanent
financing and into operations. We are the real estate lawyers representing the buyer and
borrower in these transactions. We are also the trainer and mediator for the client. More
specifically we provide the following services:
                   •   Assessing organizational readiness

                   •   Providing education and training about multifamily affordable housing and
                       homeownership development5
  Legal Aid Foundation of Los Angeles (LAFLA) provides free legal assistance to low-income people. The
Community Economic Development (CED) Unit was established in 1987 to provide technical and legal
assistance to grass-roots organizations that are part of or serve low-income communities. Our mission is to build
clean, safe, and economically vibrant communities by working with community groups that want to create jobs,
develop services, or build or rehabilitate housing. The CED team represents community-based organizations,
tenant groups, and community development corporations interested in developing new housing units or
rehabilitating dilapidated housing.
 Developments built with low-interest federal loans to private developers. Also referred to as “assisted housing”
or “prepayment eligible” or “at-risk housing” or “preservation buildings.”
  We have an annual workshop series that covers organizational capacity development, maintaining nonprofit
status, how to develop affordable multifamily and home ownership projects, business structures, fund-raising,
and employment issues.

CED_cpih_eng.pdf                                              3
                   •   Identifying project needs and the resources that will address those needs
                   •   Drafting, reviewing, and negotiating contracts—purchase and loan
                       agreements, consultant contracts, leases, joint venture and partnership
                       agreements, bidding and construction documents, insurance contracts, title
                       and escrow documents
                   •   Identifying funding sources and technical assistance resources

                   •   Encouraging networking with for-profit and nonprofit organizations work-
                       ing to improve housing for low-income communities

            A. Dunbar Economic Development Corporation

        Dunbar Economic Development Corporation (Dunbar) is a nonprofit organization
incorporated in 1988 to revitalize the historic Central Avenue corridor in Los Angeles.6
Somerville Place I and II (Somerville) stands on two blocks of land that once were filled with
trash and dilapidated buildings. The property, in a neighborhood that sorely needed services,
was unusable, posed health risks for the community, and was an attractive nuisance to

        To be successful, Dunbar knew it had to collaborate with many entities and would
need community support. Residents would need to participate actively in the project and
communicate about what services they preferred. Dunbar also needed the support of elected
officials, the Los Angeles Housing Department, and private sector investors to secure
adequate funding. It had more than 20 funding sources, including foundations, public monies,
private banks, and investors.
        Private individuals and an insurance company owned the two blocks Dunbar wanted
to develop. Our CED team first had to prepare the purchase and sale agreement and then
negotiate the purchase of the parcels of land.7Once construction began, we gave legal
assistance on issues raised by the various funding sources, addressed disputes with the

 Dunbar Economic Development Corporation’s vision is to revitalize the community by bringing services,
removing environmental hazards, and creating jobs for low-income neighborhood residents. Developing
Somerville allowed the corporation to fulfill its vision, and we are grateful that they made us a partner in their

 Finding the sellers and their representatives, some of whom were not in the United States, was an obstacle. At
the same time the CED team had to draft and review contracts for the development and financial consultant, the
architect, the appraiser, and the companies that were to perform the toxic evaluation; review and negotiate the
acquisition loan; prepare escrow instructions; review title reports; address insurance coverage. During
construction but before ground breaking, the team had to negotiate agreements with lead and asbestos
contractors; draft the bid documents for the general contractor; draft and negotiate the agreement for the
construction supervisor; draft and negotiate the general contractor’s contract to make sure to include affirmative
action, Section 3, minority- and women-owned business, Davis Bacon Wage and nondiscrimination language in
the contract; draft and negotiate the limited partnership agreement with the investor that purchased the tax
credits; review and negotiate with public and bank construction lenders; draft and negotiate a commercial lease
with Head Start to provide child care services at the child care center; and draft escrow instructions, review title
documents, and generally assist on all the construction closing details.

CED_cpih_eng.pdf                                                4
contracts, conducted training sessions on fair housing laws, drafted a tenant lease agreement,
and drafted and negotiated an agreement with the management company.
        Construction completed and a certificate of occupancy issued, we closed the
permanent loan. The clients paid the construction lenders, and the clients entered into a new
loan arrangement with the public lenders and a private bank for a permanent loan. During this
phase we reviewed and negotiated the public and private loan documents, prepared escrow
instructions, reviewed title reports, and cleared all liens and encumbrances placed on title
during the construction phase.
        What were once empty lots and boarded-up buildings is now a thriving development
composed of 41 units of affordable housing, a child care center operated by Head Start, retail
space leased by a health clinic, and several restaurants. Today low-income families fully
occupy the buildings. The families have access to many social services, including tutoring for
the children, child care, and a computer laboratory. We are assisting Dunbar in enhancing the
housing environment with opportunities for the youth in the new housing development.
        Dunbar uses part of the profits made from this project to incubate such businesses as
recycling and gardening services, which will be operated by and employ Somerville youth.8
The businesses will offer job training and help the youth break the cycle of poverty with
college scholarships partially funded by the profits of the businesses.
         This project illustrates that Dunbar’s board had a vision, exhibited leadership, and
came to us for legal assistance. Rather than wait for outside developers to invest in the inner
city and build another mini-mall, Dunbar developed a plan to meet community needs. It
engaged in a multifaceted strategy and utilized many people’s skills to achieve the
organization’s goals. The board brought together the community, developed needed housing,
retail stores, child care centers, and a health clinic and increased the economic power of the
community by collaborating with local government, banks, and private investors.

      B. Search to Involve Pilipino Americans
       Since 1973 Search to Involve Pilipino Americans (SIPA), a nonprofit community
services organization, has provided social services such as counseling, leadership
development, and cultural activities for the youth and seniors in the Beverly/Temple area of
Los Angeles. SIPA saw the tremendous need for affordable housing and decided to expand its
services to include affordable housing development.
        LAFLA’s CED team provided many of the legal and technical services described in
the Dunbar Somerville project. In addition to providing the transactional development and
transactional services for all affordable housing development cases, the CED team had to
assist SIPA’s board and staff in undergoing a tremendous cultural shift. SIPA had been
formed to provide social services and had done so successfully for over two decades. It was
expanding into becoming a developer and a landlord. The CED team assisted on the project’s
development and on the development of the board and staff.

        After completing its first project, SIPA was invited to be part of a development
collaborative with other Asian Pacific Islander organizations serving low-income Asian
Pacific Islander clients throughout southern California. A once vacant lot that attracted litter
  The CED team has provided legal assistance by preparing customer contracts; reviewing consent forms;
researching insurance coverage issues; conducting business development training and referrals; and doing
trademark research.

CED_cpih_eng.pdf                                             5
and illegal dumping has been transformed into a beautiful, affordable, multifamily housing
development with large two and three bedrooms for low-income families. SIPA now has the
capacity to increase the stock of affordable housing by developing other affordable housing
projects to serve other low-income people in need of housing.

IV.         Working with Public Housing Resident Leaders
        HUD regulations require that residents of public housing have the opportunity to
participate in a meaningful way in policy development and the implementation of programs.
PHAs are required to form agencywide resident advisory committees to give input on policy
development.9 A strong resident advisory committee represented by counsel can be a
meaningful voice in PHA policy development.

       A. Background
        In October 1998 Congress passed the Quality Housing and Work Responsibility Act.10
The Act requires housing authorities to submit plans that specify how they will run their
federal programs including public housing and the Section 8 voucher and certificate
programs. The housing authority plan has 18 required sections including a statement of the
housing needs of the community and a specific analysis of how the PHA will spend its funds.
The plan must also articulate the PHA’s policies for
                   •    eligibility and admissions (preferences, income targets, waiting-list
                        policies, deconcentration of poverty);
                   •    establishing rents (flat rents versus income-based rents, ceiling rents for
                        working families, minimum rents for families with no income, earned
                        income disregards for families who are just beginning to work, and
                        payment standards for Section 8 residents);
                   •    maintenance and management;
                   •    addressing resident grievances;
                   •    handling capital improvement projects;

                   •    addressing the demolition, sale, and conversion of public housing to
                        Section 8 vouchers;
                   •    implementing community work requirements; and

                   •    providing services, job training, jobs, homeownership opportunities, and
                        other programs to residents.

    Tenant Participation and Tenant Opportunities in Public Housing Regulations, 24 C.F.R. §§ 964 et seq. (1999)

  Quality Housing and Work Responsibility Act, Pub. L. No 105-276, tit. VI, 112 Stat. 2461, 2518 (Oct. 21,
1998), codified at various parts of 42 U.S.C. §§ 1437—13664. Download the text of the Act by searching for
“Public Law 105-276” at www.access.gpo.gov/ nara/nara005.html. HUD Interim Rule, 24 C.F.R. pt. 903 (1999),
64 Fed. Reg. 8169 (Feb. 18, 1999).

CED_cpih_eng.pdf                                               6
        The Quality Housing and Work Responsibility Act gives local PHAs control of a
great deal of policy development. The Act presents an opportunity for residents to make
positive contributions to the development of policies at the local level.11 The plan addresses
key management and operation policies that affect the day-today lives of residents. These
policies have tremendous long-term impact. For instance, the policies ultimately determine
whether public housing will serve extremely low-income residents or those at the upper end
of the eligibility scale.
         Under the Quality Housing and Work Responsibility Act, residents are entitled to be
at the table as the housing authority plan is developed.12 Representation by legal services
attorneys is essential.
       The CED team helps resident advisory committees ensure that agencywide policies
are implemented correctly. The CED team works to secure needed repairs and address
concerns regarding mistreatment by management staff. CED attorneys respond to failure by
the PHA to abide by the transfer policy and the
grievance policy and to address resident concerns
regarding security issues.
        As PHAs continue to implement cost-saving
measures focused on reducing the number of                            What were once empty lots
housing units, legal services attorneys must
represent local residents facing demolition of their                  and boarded up buildings is
homes followed by reconstruction of fewer units
under the HOPE (Home Ownership for People                             now a thriving development
Everywhere) VI program.13 Representing public
housing tenants whose homes are threatened by                         composed of 41 units of
demolition involves informing them about
residents’ rights during the HOPE VI application,                     affordable housing, a child
assisting elected leaders in participating in the
HOPE VI application, representing resident leaders                    care center operated by Head
in negotiations over the implementation of the
program, and working to ensure that relocation is as                  Start, retail space leased by a
efficient and painless as possible. We have also
helped residents monitor the commitments that a                       health clinic, and several
PHA makes in the HOPE VI application regarding
non-displacement, relocation benefit amounts,                         restaurants.
providing homeownership opportunities for higher-
income families, and developing after-school
programs, employment opportunity programs, and
resident-controlled businesses.

 Submission deadlines are based on the housing authority’s fiscal year. Some housing authorities must
submit their plans by December 1,1999, others by April 15, 1999.
     24 C.F.R. § 903.13 (1999).

  Much of the current demolition of public housing is financed under the HOPE (Home Ownership for People
Everywhere) VI program, which funds the “revitalization” of severely distressed public housing projects, as well
as their demolition. Although revitalization efforts are theoretically a benefit to the community, public housing
authorities and the U.S. Department of Housing and Urban Development are under extreme pressure to save
federal dollars by disinvesting from public housing. This results in demolition of large communities and the
reconstruction of fewer units and leads to the displacement of families from their communities.

CED_cpih_eng.pdf                                              7
      B. Resident Participation in Policy Development
       The Housing Authority Resident Advisory Committee (HARAC) is a resident
 group consisting of one representative from each of the 17 developments owned by the
Housing Authority of the City of Los Angeles. In the late 1980s HARAC contacted
our team at LAFLA for assistance.
   Initially we took on a general counsel role, with a strong education and training
component. We ultimately entered into specific retainer agreements to
                   •    rewrite HARAC’s bylaws;
                   •    negotiate a memorandum of understanding with the housing authority on
                        matters such as a budget for operating funds;
                   •    conduct leadership training sessions on facilitating meetings, recruiting
                        and motivating board members, basic fiscal management, and developing
                        negotiation skills;
                   •    negotiate changes in the lease and grievance procedures;
                   •    set priorities for the expenditure of funds for renovations and capital
                        improvements; and
                   •    negotiate the formation of a joint venture partnership with a private
                        construction company to create construction jobs.
        We sat as counsel at all HARAC meetings and monitored board of commissioner
agendas and meeting minutes and were therefore aware of proposed policy changes and
proposed funding applications for new projects or programs that required HARAC input. As
a result, between 1991 and 1996, HARAC actively participated in reviewing and giving input
to policy changes and funding applications that were submitted to HUD and other funding
sources.14 In 1996 budget cuts forced us to close the case. In 1998, through an AmeriCorps
grant, we reestablished contact with a new HARAC board, which retained us to review and
modify bylaws and to negotiate a memorandum of understanding with the PHA.
       The new leadership insisted that it be afforded “meaningful participation” as required
by HUD regulations.15 Its refusal to rubber-stamp PHA proposals presented at the eleventh
hour caused tension between resident leaders and staff. That tension ultimately led to a PHA
decision to withdraw recognition of the HARAC because of two alleged violations of
bylaws.16 LAFLA subsequently entered into two additional retainer agreements with HARAC
  We do not mean to imply that it was an easy task. Often, the final application was brought to the residents just
before the submission deadline, thereby precluding meaningful participation.
     24 C.F.R. §§ 964 et seq. (1999).
  The bylaws state that appointments to fill vacancies shall be made by the resident advisory committee
president of the particular development. Two presidents refused to fill vacancies. At the recommendation of the
head of the public housing authority resident relations office, the Housing Authority Resident Advisory
Committee (HARAC) board made the appointments. The housing authority swore the first appointee into office.
The housing authority disagreed with the board’s second choice (a vocal, anti-HOPE VI/anti-demolition
advocate who is a member of a strong tenant advocacy group in his development). He was not sworn into office.

CED_cpih_eng.pdf                                               8
to represent HARAC in the appeal of the suspension withdrawal of recognition and to
represent it in the evaluation of the PHA draft plan. 17
        HARAC formed an ad hoc residents’ committee to evaluate the draft housing
authority plan. The committee invited all of the resident advisory committee presidents. Two
other legal services programs, the Legal Aid Foundation of Long Beach and San Fernando
Valley Neighborhood Legal Services, and a local community agency that assists tenants in
organizing campaigns, La Union de Vecinos, also joined the effort.
       The issues that must be addressed in the housing authority plans are complex. We
took each one in turn and focused on it until the residents were ready to make a decision. For
example, when discussing the issue of income targeting, even after two hours, most tenants
evidently were confused.18 Median income, percentages of median income, and shifting the
admission goals are complicated issues.
       To make it real for residents, we gave to each of 15 residents an income level and
made them applicants on the waiting list for public housing. Each person represented 100
people on the waiting list and was admitted according to the income targets proposed in the
housing authority’s draft plan.19 Under the housing authority’s proposal, some of the
extremely low-income people were not admitted. The facilitator asked the residents if they
agreed with the result.
       The group expressed unanimous disagreement and expressed the opinion that public
housing must be for those that needed it most. The facilitator asked for a counterproposal. A
resident proposed shifting the admission targets in favor of extremely low-income. We
repeated the exercise until all of the extremely low-income people were admitted. This type
of exercise and other popular education tools are essential to the success of CED work.
Advocates who are not familiar with popular education techniques should enlist the support
of popular education experts in their communities.
        The ad hoc residents’ committee developed a detailed document assessing the housing
authority draft plan, identifying points of agreement and disagreement, and presenting
counterproposals for consideration by the housing authority. The ad hoc committee requested
a meeting with the executive director of the housing authority and key PHA staff and
articulated its concerns regarding the lack of meaningful participation. Its concerns included

The HARAC bylaws committee presented its revised bylaws to the membership. The housing authority
disagreed with some of the proposed changes and demanded changes. HARAC refused to make the requested
changes. The new bylaws were approved. HARAC subsequently received a letter that the vote had been taken
without a quorum due to the appointment of those two individuals. The HARAC president immediately wrote
the housing authority that the vote would be retaken at the HARAC’s next meeting. HARAC took the vote again
and excluded the votes of the two controversial appointees. The bylaws passed again. In spite of efforts to
correct the problem and to negotiate regarding the appointments that had been made at the recommendation of
senior housing authority staff, the executive director suspended and ultimately withdrew recognition.
     After trying to resolve the problem informally, we have begun the grievance process.

  Income targeting refers to setting goals for the income levels of tenants to be admitted into the developments.
Because the resident pays 30 percent of his or her income in rent, housing a higher-income individual is less
costly. The housing authority proposes to save money by attracting higher-income tenants, thereby shifting the
availability of public housing as a community resource from those most in need to people at the higher end of
the eligibility scale.

     Forty percent extremely low-income; 20 percent very low-income, and 40 low-percent income.

CED_cpih_eng.pdf                                                9
the housing authority’s withdrawal of recognition of HARAC during a crucial time, failing to
meet with a citywide body of leaders, meeting with resident advisory committee presidents
who did not have the benefit of counsel, and conducting only one public hearing for the entire
city. The ad hoc committee demanded that there be a public hearing at each development and
that the housing authority engage in a meaningful negotiation process with the ad hoc
       At writing, HARAC has not been reinstated and has submitted a request for appeal
review. The ad hoc committee has had two negotiation sessions with the housing authority.
Rather than wait for the housing authority to decide on further resident input on the plan, the
ad hoc committee is planning to hold its own series of “public hearings” and is developing a
media strategy to garner support for its proposals. The dedication, energy, and tenacity of the
residents have been an inspiration to the professionals who are acting as their staff.
        This case illustrates that the role of the attorney should sometimes be limited to
educating clients about changes in policy and that leadership, vision, and direction must come
from resident leaders. When attorneys and community activists collaborate to encourage
tenant leadership, varied skills and expertise are brought to the table. A successful result
means preserving a substantial amount of affordable housing for extremely low-income
people, improving existing affordable housing, and demonstrating that residents can have a
substantial amount of power and control over decisions that affect their daily lives.

V. Private Housing and Eradicating Deplorable Conditions
        A 1995 American housing survey for the Los Angeles Long Beach metropolitan area
revealed 156,400 housing units to be substandard and in need of major repair, 107,900 rental
units infested with rats, and 131,700 rental units without working toilets.20

   A. Background
        Legal services advocates must represent tenants facing deplorable housing conditions
because of the owner’s failure to comply with housing codes. Representation and advocacy

                   •     advocating at the legislative and administrative levels21

                   •     advocating with local courts to ensure that local and state statutes are

  Blue Ribbon Citizens’ Committee on Slum Housing, The Slum Housing Problem in Los Angeles and the
Department of Building and Safety: Interim Report Number 1 (July 28, 1997), at 3. Call us at 213.640.3811 for
a copy of the report.
     Within Legal Services Corporation restrictions.
   E.g., in Los Angeles more than 50 cases are scheduled each day in Division 20. Due to a lack of resources, the
commissioner refused to retain jurisdiction of cases where he found code violations until repairs were made as
required by California state law. We convinced the presiding judge to identify a different judge to conduct
“compliance hearings” in these cases. After the eviction trial, these cases are now referred to Division 77, where
a judge, via one or more compliance hearings, enforces the court’s ruling that the owner comply with all housing
code requirements.

CED_cpih_eng.pdf                                              10
                   •     supplying client education materials such as presentations and handouts on
                         a tenant’s right to live in habitable housing and regarding rent withholding,
                         the “repair and deduct” remedy, and local programs designed to force
                         owners into compliance with the housing codes;23

                   •     assisting groups of tenants in developing a plan for addressing habitability

                   •     representing residents who are part of mass evictions and bringing suits for
                         injunctive relief to force the owner to make needed repairs; and

                   •     assisting tenants in purchasing their building via a tenant-controlled
                         nonprofit corporation.

B. Abating Slum Conditions

        Comunidad Cambria is a 41-unit development that was purchased and rehabilitated by
a tenant-controlled nonprofit organization comprised primarily of building residents. The
development is a model for addressing slum conditions in severely dilapidated buildings.

         In 1992 a small group of tenants came to LAFLA’s Central Community office to
discuss serious code violations in their building—a severe rat and roach infestation, large
holes in the walls and floors, serious plumbing problems, theft of a majority of the pipes for
the fire sprinkler system, theft of all fire extinguishers, use of vacant units by prostitutes, drug
addicts, and a local gang, no garbage collection, and a threatened termination of all utilities
because the owner failed to pay bills.

        A LAFLA attorney inspected the building and recommended that the tenants withhold
the rent and use the fines to pay for trash collection and the utilities. The tenants began to
deposit their rents in trust and took care of some of the more serious problems. The owner
abandoned the building. At this juncture the CED team was asked to speak with the tenants.
We presented to the tenants various options such as tenant-controlled purchase or a purchase
with a joint-venture partner.

        At first, tenants were unable to fathom these ideas. We decided to pool our resources
with another local organization, Inquilinos Unidos, and established a leadership training
program addressing immediate needs such as trash pickup, threatened utility termination, and
fire and safety hazards. The training featured tenant-controlled ownership models.

       The property went on the market, and we watched as the purchase price slowly
dropped from $1.5 million to $700,000. At that point we arranged for a local nonprofit
developer to talk to the tenants about a tenant-controlled purchase. The leadership training
and their experience with problem solving gave the tenants the confidence they needed to
move forward. Their offer to purchase was accepted.

       The day escrow closed, our clients faced obstacles. City attorneys, who threatened
prosecution, put pressure on the board and its attorney to rectify all code violations
immediately. Gang members threatened to set the building on fire when vacant units were
boarded up. Our clients tackled these problems while undertaking all the development steps

     Go to http://tenant.net/other_areas/Calif/ for an example of materials and handouts on tenants’ rights.

CED_cpih_eng.pdf                                                 11
described in the Dunbar case study. They had to hire consultants, approve consultant
contracts, approve documents to secure funding, evaluate architectural plans, approve color
schemes, establish house rules, develop new rental agreements, address security and fire
safety issues, and address concerns regarding tenants who refused to cooperate and continued
to withhold rent. The CED team worked with the residents during this development and
provided all the services described in the affordable housing section.
       Our clients’ decision to purchase resulted in the rehabilitation of 41 units of affordable
housing that is now owned by a tenant-controlled, nonprofit corporation. The Board members
have become active leaders in the community. They have joined other organizations seeking
to improve the neighborhood, and they are regular speakers at affordable housing developer
conferences. The building’s community room is becoming an anchor for community
meetings and cultural activities.
       Our initial role was to act as lawyers and educators presenting information and
options for resolving habitability problems. As with all of our projects, tenant leaders
supplied the vision and direction, which led to the proactive tenant purchase.24 Again
attorneys and community activists who supported the tenant leadership brought varied skills
and expertise to the table. Cambria illustrates the power and control tenants can exercise
when they make the decisions that affect their daily lives and when they act to resolve
problems they confront.

VI.         Preserving Privately Owned Subsidized Housing

        In legal services circles, preservation refers to preserving privately owned housing
built primarily in the 1960s with funds from the 221(d)(3) and 236 programs.25 These
programs offered low-interest loans to private developers. The loans had 40-year mortgages.
The developer signed a regulatory agreement promising to rent to very low-income, low-
income, and moderate-income people for the term of the loan. In most of these cases the
regulatory agreement allowed the owner to prepay the mortgage at the 20-year mark and
convert the housing to market rates.

       A. Background

        In 1988 an estimated 1.5 million units nationwide were at risk of prepayment and
market-rate conversion. Many of these units were preserved via tenant and nonprofit “buy-
outs” through the Emergency Low Income Housing Preservation Act and the Low-Income

  Collaboration with non-legal services advocates (initially an organizer from Inquilinos Unidos and
subsequently an entire development team including financial consultants, architects, and a development
consultant) in support of the tenant leadership allowed us to play a limited counsel role and allowed the tenant
leadership the opportunity to access and make use of other resources. Other examples of our slum-abatement
work include eventual purchases by nonprofit organizations. In most cases our intervention, if the owner fails to
respond to negotiation efforts, leads to rent withholding and representation either in eviction court and/or in an
affirmative suit for injunctive relief. These cases are handled jointly with our housing unit.

     National Housing Act § 221(d)(3), 12 U.S.C.A. § 17151(d)(e), (d)(5); id. § 236, 12 U.S.C.A. § 1715z-1.

CED_cpih_eng.pdf                                               12
Housing Preservation and Resident Homeownership Act (LIHPRHA).26 These laws restricted
the right to prepay the mortgage and provided authority and funds for resident- and nonprofit-
controlled purchases of the housing.

        In the 1996 budget process Congress restored the prepayment right to owners and in
1997 Congress eliminated all funds for tenant and nonprofit purchases from HUD’s budget.
From 1996 through 1998 Congress also enacted changes that affect buildings with project-
based Section 8 subsidies. The statutory changes, coupled with pressure to save money by
divesting from this housing stock, put the stock at great risk of market-rate conversion, which
lead to the displacement of thousands of families, seniors, and disabled people. CED work in
this context includes

                   •   legislative and administrative advocacy to ensure passage of legislation to
                       preserve the housing;27

                   •   working with tenant associations to preserve their individual developments
                       via tenant- and/or nonprofit-controlled purchases; and

                   •   working with tenant associations to encourage and/or force owners to
                       remain in the program.

      B. Tenant-Led Legislative Advocacy

       The Countywide Alliance of HUD Tenants (CAHT) is a coalition of tenant leaders
who live in housing developments built with federal loans given to private developers. Their
mission is to preserve these buildings as affordable housing for very low, low, and moderate-
income individuals.

       In 1988, using Interest on Lawyers’ Trust Account funds, LAFLA’s CED unit called a
meeting. The invitees included tenant leaders in prepayment eligible housing, community-
based nonprofit organizations with established histories of work with tenants, and other legal
services providers. The meeting began the development of a countywide organization to
address the threatened loss of approximately 40,000 units in the greater Los Angeles area.

        We were surprised to find that most of the tenants who attended the first meeting were
not at the second meeting. The pattern repeated itself several times. The participants agreed to
address the attrition of potential tenant leaders from the group, and we began to look at
possible causes.
        Interviews with participants who failed to return to meetings revealed that the pre-
sentation was too technical. After many fits and starts, two bodies were formed. The
leadership body was CAHT, while the service providers became the Technical Assistance
Team to the Countywide Alliance of HUD Tenants (the technical assistance team). LAFLA

  Emergency Low-Income Housing Preservation Act of 1987, Pub. L. No. 100-242, tit. II, 101 Stat. 1877 (Feb.
5, 1988), and the Low-Income Housing Preservation and Resident Homeownership Act of 1990, Pub. L. No.
101-625, tit. VI, 104 Stat. 4079, 4249 (Nov. 28, 1990), both codified at 12 U.S.C § 4101.

  Before the 1996 restrictions, legal services advocates were involved in legislative and administrative advocacy
in this area. After the 1996 restrictions, many programs, including LAFLA, ceased their work in this area. Those
that have continued do so under Legal Services Corporation restrictions.

CED_cpih_eng.pdf                                             13
became a member of the technical assistance team and was retained to provide services to

        CAHT developed a regular meeting schedule and created a bylaws committee. The
committee studied the advantages and disadvantages of incorporating as a 501(c)(3) or
501(c)(4) nonprofit organization and determined that doing either was unnecessary. The
larger body concurred.
        The technical assistance team was responsible for CAHT’s technical and legal
assistance. LAFLA was lead counsel on all legal matters and conducted capacity
development training. The Coalition for Economic Survival, which specializes in organizing
tenant associations, gave technical assistance on organizing issues. Advocates worked with
tenant leaders to address logistical issues of meeting such as translation, transportation,
location, and agenda development in order to ensure tenant control of the organization. Attor-
neys and other advocates were asked to speak only on request at meetings. CAHT
subsequently helped form the Statewide Alliance of Tenants and joined the National Alliance
of HUD Tenants.
         Technical assistance team members participated in statewide and national conference
calls to learn about the various legislative proposals related to the prepayment problem. They
presented that information to CAHT members at sometimes daylong training sessions. The
attorneys presented legislative proposals and the possible consequences of each of the
proposals. Team members ensured that tenant leaders led the discussion and that the
decisions from these sessions were the tenants’.
        Using the resources of non-Legal Services Corporation-funded agencies, tenants
participated in national conference calls and meetings, reached consensus on key issues, and
planned for a tenant-initiated legislative agenda. The result was LIHPRHA, legislation that
mandated protection against prepayment and preserved the housing. LIHPRHA also allocated
funding for technical assistance and for the hard costs of purchases by nonprofit organizations
with a priority to tenant-endorsed nonprofit organizations.

        From 1991 through 1995 CAHT focused its energy on ensuring that its member
organizations took advantage of LIHPRHA’s purchase possibilities. In 1995-96 CAHT was a
key player in a national campaign to stop Congress from returning the prepayment right to
owners and defunding the LIHPRHA program. Coordinated by the National Alliance of HUD
Tenants, tenants from all over the country wrote letters and held rallies, met with their elected
officials, and engaged the media. Southern California tenants were key to the campaign
because the chairperson of the HUD/Veterans Administration/Independent Agencies budget
subcommittee was a southern California legislator. Although the right to prepay the mortgage
was restored, the campaign was otherwise a success, and, in a year in which the HUD budget
was reduced by approximately 25 percent, LIHPRHA funding increased from $150 million in
the prior year to $732 million targeted toward preservation of the housing.28
        CAHT quickly developed legislative advocacy and grass-roots organizing to
accomplish its goals. Collaboration with multiple agencies including non-legal advocates and
government agencies brought the necessary skills to the table, allowed us to limit our role to
legal counsel, and allowed the clients to maximize their resources to accomplish their goals.
LAFLA CED attorneys’ role in this campaign was to present the legislative proposals to the

  Some tenant advocates feel that the prepayment right would not have been restored had advocates without
direct ties to tenants not given it up in a negotiation session from which tenants and their representatives were

CED_cpih_eng.pdf                                               14
clients, identify the advantages and disadvantages of each proposal, and assist the clients in
making decisions based on the legislative information. The tenant leadership, with the
support of the Coalition for Economic Survival, coordinated the grass-roots organizing
campaign. The result: preservation of a substantial amount of housing, some tenant and
nonprofit purchases, increased economic wealth and power in the community.29

       C. Tenacity in the Struggle to “Save Our Homes”

        Holiday Venice is a 14-building, 246-unit, scattered-site development within a half a
mile of the beach in the Oakwood area of Venice in the City of Los Angeles. The
development is funded under the Section 236 program with project-based Section 8 funding
for 99 percent of the units.30 Residents in the neighborhood and development are
predominantly African American and Latino. Due to its proximity to the beach, the Oakwood
neighborhood has been under extreme gentrification pressure for many years.
       In 1988 the residents sought help from Westside Legal Services on a notice of intent
to prepay the mortgage and convert the rents to market levels. Westside Legal Services is not
funded by the Legal Services Corporation and used a variety of legal and non-legal strategies
such as direct grass-roots organizing. The effort to prepay the mortgages was defeated.
        In 1991, when the attorney for the tenants joined our staff, the case came to LAFLA.
The Holiday Venice tenants were already members of CAHT and became extremely active in
the campaign to pass LIHPRHA described above. With patience and tenacity they mastered
the fine points in the law and participated in the tenant debate. At one point in the
negotiations with Congressional staff, the possibility of “selling out” developments in higher-
income areas was proposed. The Venice tenants successfully argued to defeat proposals that
would have harmed them. The legislative record has a statement by the congressman Ned
Levine recognizing the Venice tenants as “the mouse that roared. “31

        In 1996, although not directly affected by the threatened loss of LIHPRHA funding,
Holiday Venice Tenant Action Committee members participated actively as CAHT members
in the campaign to save the LIHPRHA program.32 Using their own unrestricted funds, the
committee’s president, Julia Davis, traveled more than once to Washington, D.C., to advocate
refunding the program.
     In 1997 Holiday Venice residents had the opportunity to purchase the development.
LAFLA, retained to assist on purchase negotiations, started educating the tenants about

  Unfortunately in 1996, LAFLA leadership felt that even our limited involvement in educating the tenants
regarding how changes in the law might affect them was too politically charged, and the CED unit was ordered
to close the case.
  In the 1970s rising operating costs made many 236 and 221(d)(3) programs costly to manage. The government
provided additional funding, in some cases project-based Section 8 contracts. Initially these contracts were
multiple-year contracts. Since 1996, the funding for expiring Section 8 contracts has been renewed annually,
resulting in a certain amount of instability for the tenants. Legislative and regulatory changes leave the decision
to renew almost entirely in the hands of the owners and thus put these developments at greater risk of market-
rate conversion.
     See www.leginfo.ca.gov/bilinfo.html
     In the 1988 effort we established that Holiday Venice was not eligible for prepayment.

CED_cpih_eng.pdf                                               15
possible purchase options.33 The tenants interviewed potential joint-venture partners and
consultants and negotiated a purchase and sale agreement. Negotiations, however, broke
down over the purchase price, and in 1998 and 1999 residents had to confront the sale of their
development to another for-profit entity.

        A Freedom of Information Act request revealed that the potential purchaser inquired
about terminating the Section 8 contracts. The tenants contacted the Coalition for Economic
Survival for assistance in organizing to stop the sale. LAFLA, the Law Firm of Hill, Farrer
and Burrill, Venice Community Housing Corporation, a financial consultant (California
Housing Partnership), and the Coalition for Economic Survival formed a technical assistance
       The tenants urged HUD to disapprove the sale to a developer that wanted to terminate
the subsidies and convert to market rents. Although HUD approved the sale, the tenants
secured in writing a promise to renew the Section 8 subsidies as long as Congress made the
funding available. They also secured commitments regarding tenant participation in the
development of a management improvement and operations plan, which addressed
management, repair, and maintenance issues.
        In spite of the promises they received, the tenants have struggled to be heard with
regard to the management improvement and operations plan. They have also had to put
tremendous energy into addressing
                   •   recertification inefficiencies resulting in numerous tenants receiving
                       notices of rent increases to market rent and incorrect recertification rent
                   •   dissatisfaction with the quality of the work under the management
                       improvement and operations plan;

                   •   verbal abuse and mistreatment at the hands of office staff including being
                       called stupid and other derogatory terms;
                   •   security guards peeking in windows, following tenants and their guests
                       when they are in the common areas of the development, and noting down
                       everything that the tenant and his or her guest do;
                   •   hanger-by-hanger, drawer-by-drawer searches of tenants’ homes for
                       evidence that boyfriends are living with the tenants;34 and

  They explored various possibilities—cooperative ownership, tenant-controlled nonprofit ownership, and a
joint venture with a local nonprofit entity. They selected the last option and, after issuing a request for
qualifications and interviewing various candidates, selected the Venice Community Housing Corporation, a
local nonprofit developer, as their joint venture partner.

  One tenant was verbally threatened with eviction and initially faced an increase in rent to market because
during one of these searches the resident manager found a pair of boxers on her bed. She said that she slept in
boxers. Many women do. The outrageousness of this search and its conclusion illustrate the humiliation that
government-assisted tenants have to endure at the hands of overbearing management companies. We reviewed
the leases carefully and did not find any reference to the type of underwear tenants were allowed to wear nor a
requirement that women report to the management company that they intended to sleep in boxers.

CED_cpih_eng.pdf                                             16
                   •   notices of intent not to renew the Section 8 contracts in spite of commit-
                       ments to the contrary made by the current owners during the purchase
       The tenants are confronting these problems with varied strategies and are taking
advantage of all the resources at their disposal. They have divided the issues into five
                   •   threatened loss of the Section 8 subsidy;

                   •   threatened loss of the housing once the mortgages expire (in 11 years);
                   •   problems with recertification of individual tenants;
                   •   problems with conditions and management improvement and operations
                       plan implementation; and
                   •   other harassment.
        In each of these categories they have developed a legal strategy and an organizing
strategy. They have formed a legal team and an organizing assistance team. The legal team is
developing legal strategies for maintaining the affordability of the development and is
handling individual recertification and harassment cases. The organizing team has assisted
the tenants in organizing meetings and accountability sessions with HUD, the owners, and
elected officials and in developing a media strategy.35 Although we have resolved a majority
of the recertification cases, the legal team is exploring the possibility of litigating some of the
more egregious violations of privacy, and the tenants are resorting to direct action such as
marches and demonstrations. They are currently working with the Coalition for Economic
Survival and two other local political organizations, Venice 2000 and the Metropolitan
Alliance, to organize a press conference and march.

        The result to date is that 246 units of affordable housing have been preserved and are
home to African American and Latino tenants in an area whose proximity to the beach
renders it vulnerable to gentrification. The tenants’ continued efforts will lead to improved
conditions and treatment by management staff and illustrate actual power and control by sub-
sidized housing tenants over decisions that affect their daily lives.

        As in the other projects we have described, collaboration with nonlegal services
advocates and government agencies in support of the tenant leadership has allowed LAFLA
to play a limited counsel role and the client to maximize its resources and tap skills and
expertise to accomplish its goals. Our role has been limited to legal assistance with regard to
the preservation of the development, the possible purchase of the development, addressing
specific regulatory violations in recertification, addressing regulatory and statutory violations
of privacy, and otherwise handling individual cases. As always, the leadership, vision, and
direction come from the tenants. Holiday Venice has been proactive in legislative advocacy
and grassroots organizing to accomplish its goals.

VII.        Local Governments and Community Redevelopment

  An accountability session is a public meeting where a decision maker is forced to make public commitments
by a large group of constituents or stakeholders.

CED_cpih_eng.pdf                                           17
       In many communities the powers used under the California Redevelopment Act have
destroyed affordable housing and displaced large numbers of tenants.36 In some cases
redevelopment agencies have wiped out entire communities.

       A. The California Redevelopment Act

        The California Redevelopment Act grants local government the power to form a
redevelopment agency and identify redevelopment areas.37 Within each area the agency is
given powers (eminent domain and other zoning powers) to facilitate the development of
projects such as shopping malls that will in turn increase the tax base. The increase in the tax
base is used primarily to fund further redevelopment. State law requires that a minimum of 20
percent of these funds be set aside for affordable housing development.

        If a redevelopment area includes housing, the agency must form a project area
committee (PAC), which is an elected advisory body with a right to counsel.38 Legal services
attorney representation ensures that the PAC is informed about the impact on housing and the
potential displacement of low-income people and the availability of the minimum 20-percent
set-aside for affordable housing construction.

       B. Adelante Eastside Project Area Committee

       Adelante Eastside Project Area Committee (Adelante PAC) is an example of how
residents, and in particular tenants, can influence the redevelopment plan for a particular
community concerning (1) the number of affordable housing units that are destroyed in the
redevelopment and (2) the number of new units that are constructed as a result of the
requirement that at least 20 percent of the tax increment be set aside for affordable housing

        LAFLA’s CED unit has worked on many successful CED projects on Los Angeles’s
east side. When the redevelopment agency called for an election of members to the Adelante
PAC, many local community advocates were ready and able. The Los Angeles city attorney’s
office initially represented the PAC, but it also represented the redevelopment agency and the
city council on the same issues. The Adelante PAC recognized the obvious conflict of interest
and sought legal assistance from LAFLA.

        The Adelante PAC is responsible for developing comments on a draft redevelopment
plan. As an initial step, it developed a list of specific goals and objectives. In keeping with
our policy of never telling our clients what to do, our role was to facilitate discussion of the
advantages, disadvantages, and consequences of each element of the plan and to help the
PAC determine whether each element accomplished its stated goals and objectives. The
Adelante PAC’s goals included preserving existing housing, a greater than 20-percent set-
aside for affordable housing development, and a bar on eminent domain on residential

     CAL. HEALTH & SAFETY CODE §§ 33,000 et seq.



CED_cpih_eng.pdf                                     18
properties.39 Because the devil is in the details, the PAC will remain in place for the life of the
plan, in spite of the redevelopment’s opposition, to ensure resident participation in the plan’s
        The redevelopment plan contains provisions that ensure the preservation of housing
and creates a pot of money that will be used by local community-controlled nonprofit
organizations to increase the housing stock. The Adelante PAC’s continuing role in the
implementation of the plan illustrates actual power and control by residents over decisions
that affect the quality of life in their community.40

         This case study again illustrates that leadership, vision, and direction should come
from the clients, in this case the representatives of various local organizations and other local
residents and small business owners. Our involvement in prior CED projects had already
established a base of leaders capable of serving on the PAC. Our role was limited to
facilitating a discussion to ascertain goals and objectives and to present the legal and policy
analysis to ensure that the redevelopment plan accomplished those goals and objectives. This
case study also shows that CED is a proactive strategy. The members of the PAC participated
as community leaders when they worked to develop a policy document that dictates the future
of their community. The PAC itself was a collaboration of community organizations and
community leaders and had a diverse group of leaders with diverse skills. The only skills that
we as attorneys needed to bring to the table were our legal skills.

       C. Developing Resources for Affordable Housing
        The CED team at LAFLA is also engaged in creating resources for the development,
preservation, and improvement of housing. We have (1) worked with community groups
interested in developing community land trusts; (2) filed litigation against the Metropolitan
Transit Agency to require it to replace housing demolished because of promised
transportation projects; and (3) filed litigation against the City to stop the practice of
improperly assessing transfer taxes on affordable housing developments. We also offer
community education on new and potential funding legislation for housing programs.41

VIII. Conclusion

        Like all strategies, CED work has its challenges. In every collaboration, the
participants have to guard against miscommunication, territoriality, and other sources of
conflict. When working collaboratively with nonattorneys, the CED practitioner has to guard
against breaches of client confidentiality and actual and potential conflicts of interest. The
legal services attorney must carefully balance CED pulls against the day-to-day pressures of
addressing the needs of the clients who walk through the front door.

  The final plan included a ban on the use of eminent domain on housing units and a 25-percent set-aside for
affordable housing development to be used within the project area.

  We must note that the only concept that this project area committee did not understand is that it was an
advisory body.

     All activities comply with Legal Services Corporation restrictions.

CED_cpih_eng.pdf                                                19

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