The chairman of a state affordable housing agency bought two Los Angeles rent-controlled properties at the end of 2014 and then quickly began the process of ousting longtime tenants to build luxury condos.
Matthew Jacobs, chairman of the board for the California Housing Finance Agency, acquired the properties in Beverly Grove and the Fairfax District in October, according to his economic statement of interests. After the beginning of the New Year, according to a resident at the Beverly Grove apartment complex, Jacobs’ management firm was telling residents that he planned to demolish the apartments and evict everyone.
Within the month, the management firm started serving eviction notices. Most of the residents at the Beverly Grove complex have already left, and the residents at the other property are slated to leave in July.
The news that Jacobs was chairman of the CHFA became a rallying cry for residents, tenant rights groups and affordable housing proponents. The agency’s mission is to create affordable housing opportunities for low and middle income Californians.
Consumer Watchdog joined a growing coalition, asking Gov. Jerry Brown to remove Jacobs from his position. Jacobs tarnishes any affordable housing effort if he remains the face of CHFA and having him run the board of an affordable housing agency is like putting the Koch brothers in charge of climate change prevention.
Jacobs used a loophole in rent control laws, the Ellis Act, which gives landlords the power to evict tenants from rent-controlled buildings as long as they sell the property, convert it into condominiums or let the building sit vacant for five years, to eliminate 17 rent-controlled units to reap a healthy profit.
In Los Angeles, nearly 19,000 rent-controlled units have been withdrawn from the market since 2001, according to the Los Angeles Housing and Community Investment Department. With a stronger housing market emerging, this trend will only become worse, not better. Rising income inequality is now becoming rental inequality.
The news around Jacobs’ plans prompted Los Angeles City Council members to begin exploring ways to save rent-controlled apartments and at least slow developers like him from indiscriminately destroying these types of properties.
Read Consumer Watchdog's letter to Gov. Brown:
