Officials Call for Overhaul of Slum Program

A Los Angeles city program that withholds rent from landlords to force them to repair slum conditions has collected rent payments from only 10% of the 220 buildings in the program, prompting housing officials to call for an overhaul of the project.

The city’s Rent Escrow Account Program, or REAP, was adopted seven years ago as the city’s get-tough effort to bring slums up to code. Under the program, tenants can withhold rent from their landlords, depositing it instead into a city-controlled escrow account. Once the repairs are made, the money is released to the owners.

But few tenants participate, city officials say, because they either don’t know about the program or are intimidated by their landlords and continue to pay rent as usual instead of putting it into the city account.

As a result, about half of the buildings in REAP have remained in the program between two and five years while slum conditions remain unabated, according to a city Housing Department report.

“Tenants either don’t know they can pay into the program or don’t participate for fear of retribution,� said Gary Squier, head of the Housing Department. “If there is no economic cost to the landlords, they are not going to make the repairs.�

Squier said the city cannot legally force tenants to participate, leaving the program’s success in the hands of the tenants.

The buildings that have been in the program more than two years are located throughout the city but are concentrated in poorer neighborhoods. Nine of the buildings are in the San Fernando Valley, five along crime-plagued Blythe Street in Panorama City.

At a five-building complex on Blythe Street that was placed in REAP in 1993 due to electrical, heating and plumbing problems, tenants face a complicated situation because the complex was taken over by a court-appointed receiver four months ago, after the owner filed for bankruptcy. The city continued to send notices, asking tenants to pay into REAP.

“I know that we have to pay to the city, but then how will the receiver pay to make repairs and clean up?� asked a woman who has lived in one of the buildings with her two daughters for five years.

But other tenants said the receiver has done nothing to deal with a leaky roof, broken windows and grungy carpets.

“No one has done anything for us,� said Rosa Ramirez, who pays $200 per month for a two-bedroom apartment in the complex. “They work harder to fix the vacant ones so they can rent them out.�

Housing officials acknowledge weaknesses in the program but vow to increase the rent collection rate by adopting a series of changes, including a $25,000 outreach program that would deploy tenant advocates to educate renters about the program.

Among the hurdles to overcome, housing officials say, is the skepticism of some tenants and their distrust of government and official-looking documents.

In fact, at a South-Central apartment complex that was placed in REAP in 1990, one tenant showed a reporter a stack of unopened letters from the REAP program that tenants had simply ignored and set aside next to their mailboxes.

Officials also plan to amend the program’s bylaws so that, after six months, the rent collected in the escrow account will be returned to the tenants so they can make repairs themselves.

“The loopholes are so big you can drive a Mack truck through them,� said Mirta E. Ocana, a legislative deputy with Councilwoman Jackie Goldberg, who has pressed to make the program tougher on landlords.

Ocana is also working to shorten the lengthy process currently used to list a building in the program.

When it was proposed in 1988 by then-council members Zev Yaroslavsky and Gloria Molina, the program was considered the toughest of many city efforts to clamp down on slumlords. It was designed to go after the worst offenders--the landlords who repeatedly refused to correct problems cited by building and safety, fire or health inspectors. Even some housing officials described the program as Draconian.

A building is recommended for the REAP program only after a landlord repeatedly fails to repair leaking roofs, faulty heating, clogged plumbing and other serious problems that tenants report to city inspectors.

A review process follows, with hearings and appeals that often take six to nine months to complete. If the owner still does not make the repairs, the City Council then votes to place it in the program.

After the council puts a building into the REAP program, city housing officials send letters in English and Spanish to tenants every month, explaining the benefits of the program and providing details on where to send their rent payments.

Once tenants start to pay rent into a city-controlled escrow account, landlords can only retrieve the money when repairs are completed. The city keeps 15% of the funds for administrative costs.

Sam Luna, head of the Housing Department’s neighborhood recovery program, said buildings are taken off the REAP program once a city inspector approves the repairs. Often, he said, the buildings remain in the program because the inspectors and the landlords disagree on whether all the repairs have been completed as required by the city.

Toney Chisum Jr., the owner of a four-unit building near USC that was put into REAP in 1990, said he recently took over the building and made the repairs that the previous owner failed to fix.

But he said the city has failed to take his building off the REAP list. “I’ve been calling and calling and calling, and they don’t get back to me,� Chisum said.

Despite its low collection rate with current REAP buildings, the program has been successful in another respect: The threat of placing a building in the REAP program has prompted repairs in many properties.

Of the 1,603 buildings that safety inspectors have referred into the program since it began in 1988, landlords for 1,127, or 70% of the buildings, made repairs before they were placed into REAP, according to a housing report.

Of the 476 buildings that were actually placed into REAP, landlords for 244 buildings have made repairs and have been released from the program, the report said.

William Shaw, president of the Apartment Owners Assn. of Greater Los Angeles, said that most landlords are conscientious and spend thousands of dollars keeping their buildings up to code.

Although he acknowledged that some landlords fail to make repairs promptly, Shaw said landlords should not be blamed for the REAP’s low collection rate.

“If there is a problem with the REAP program, that is the city’s damn program,� he said. “I defy you to provide numbers showing landlords are intimidating tenants.�

On the other hand, Larry Gross, executive director of the Coalition for Economic Survival, a tenants’ rights group, said tenants should not take the blame for the program’s ills because they fail to participate.

He said tenants probably don’t participate because they are disillusioned at how long it takes to get results.

“The key to all of this is the swiftness of the program for it to be effective,� Gross said.