Rents to Rise on 196 Subsidized Units

Rents at Lurline Gardens, for 25 years a federally subsidized apartment complex, will rise to market rate in June, worrying tenants who fear they won’t be able to afford the increases without other government assistance.

Representatives of the U.S. Department of Housing and Urban Development and the Los Angeles Housing Authority met with more than 100 tenants earlier this week to announce the rent increase that will take effect June 9 for the 196-unit complex at 9930 De Soto Ave.

Kimberly Martin, asset manager for HUD, said most of the tenants would probably qualify for federal rent subsidy certificates for at least one year. Future subsidies are dependent on continued congressional funding.

To be eligible, a two-person household must earn less than $32,850 annually, and a four-person household less than $41,050, said Steve Renahan, an official with the city housing authority.

HUD and housing authority officials will begin the process of determining eligibility next week, said Linda Molina of the housing authority.

Lurline Gardens residents now pay between $327 and $394 for a two-bedroom unit, said apartment manager Marie Walser. Under the new rate structure, a two-bedroom apartment will rent for $850.

Lurline Gardens was part of a federal government program established in the 1970s that allows apartment building owners with 40-year, low-interest government mortgages to pay off their mortgages after 20 years. The owners then have the option of raising rents to market level or selling the property, provided they give tenants the first opportunity to buy.

The Lurline Gardens tenant association wanted to buy the property, but its owner, Lurline Gardens Limited Partnership, did not want to sell, said Kathi Frazier, the tenant association’s president.

“It was a business decision,” said Lisa Ehrlich, general counsel for the owners. “It was built with the intention it would be prepaid and kept on as part of our apartment inventory and moved up to market rate.”

The partnership owns five apartment buildings, Ehrlich said.