Could L.A.'s rezoning plan to boost housing supply cause more tenant displacement?

Sandra Sanchez described the headaches as strong. They come on when she starts thinking where she, her husband and two sons will live.

In order to build a larger apartment complex, her landlord plans to demolish the six-unit bungalow court in South Los Angeles that the family has called home for decades. With her husband earning only $38,000 a year at a nearby factory, and rent in nearby apartments costings hundreds of dollars more than they now pay, the stress can be overwhelming.

"They are sending us to live on the streets," said Sanchez, 55.

Some tenant advocates worry such demolition and displacement could become more common in Los Angeles.

Currently, the owner of Sanchez's apartment complex is using one of the city's building incentive programs that allows developers to build more than they usually can if they include at least some income-restricted affordable units in the new project.

Now, in an effort to build more housing to alleviate the affordability crisis, the city is proposing to supercharge those incentive programs in a way that could result in such projects making even more financial sense to undertake.

Officials are proposing to do so on land already zoned for multifamily housing, where people tend to be renters, not in neighborhoods zoned for single-family houses where people tend to own.

That fact has raised concerns among a coalition of tenant and housing advocates who want the city to shift course to reduce displacement.

Of particular concern? The loss of older units like Sanchez's that make up the majority of apartments in L.A. and fall under the city's rent stabilization ordinance, which limits annual rent increases and provides a measure of stability.

"[This] housing stock is the reason working-class Angelenos are able to stay in Los Angeles," said Laura Raymond, director of the ACT-LA coalition. "It doesn't make sense to have this huge cornerstone of our housing policy solution be at risk."

Los Angeles is proposing changes because state housing rules mandate the city find land where developers can add 255,000 new homes — just over half of which would be affordable to low-income families.

L.A.'s answer is the proposed Citywide Housing Incentive Program ordinance, which is expected to come before the City Council's Planning and Land Use Management Committee on Tuesday. The proposal would enable developers to build more than currently allowed and receive breaks on height and parking if they include a certain percentage of affordable units — and the property is near transit or along a major street near jobs and good schools.

Projects that are 100% affordable would be eligible for incentives across a wider swath of the city.

The incentives vary by location and project type, but here's one example: Lots near both a Metro rail station and a rapid bus line could see developers build 120% more units than the underlying zoning allows, with the percentage of required low-income affordable units ranging from 11% to 27% of the new project.

If such a lot is in a so-called high-opportunity area near jobs and good schools, developers won't face a total unit cap and will be restricted only by what they can fit on the site given other limitations on height and density.

Under its proposal, the planning department says 56% of expected growth is targeted in high-opportunity communities, many of which have long fought development. That percentage could have been higher, but the department left single-family zones — which account for most land in such well-to-do areas — largely untouched.

Read more: Los Angeles has to rezone the entire city. Why are officials protecting single-family-home neighborhoods?

Incentives would apply in single-family zones only if a property is owned by a public agency or a faith-based organization, which accounts for 1% of the city's single-family lots.

Instead, the majority of parcels that fall under the proposed incentives are located in residential neighborhoods currently zoned for multifamily. Most remaining lots are in commercial zones. There, most parcels are likely to be occupied by a strip mall or office building, but some apartments exist in commercial zones as well.

While it works to allow more housing — the lack of which economists say is the underlying cause of the affordability crisis — the city is taking steps to increase protections for departing tenants.

Under a separate proposal, also set to be heard by the PLUM Committee on Tuesday, low-income residents displaced by demolition would have the right to move into the new development at either their prior rent or at rent deemed affordable to their income, whichever is lower.

Those residents would also typically receive expanded relocation assistance to help them afford rent in a market rate unit for 42 months, the average time it takes to build a new apartment building, according to the city, which estimates payments could surpass $100,000 for such households.

Current relocation payments top out at $25,700, which can run out quickly when long-term tenants protected by rent stabilization are suddenly forced to pay rent at today's prices.

Some of the tenant protections in the city's proposal already are mandated by state law, but set to expire in coming years. The city's proposal would make them permanent and go further to mandate every rent-stabilized unit demolished is replaced by an income-restricted affordable unit.

The planning department said it didn't have an estimate of how many apartments might be knocked down because of its proposals, but said the added tenant protections would add costs for developers and limit the number of existing rentals demolished. The department said it also took steps to lessen displacement of low-income Angelenos by offering greater incentives in high-opportunity communities, especially along major streets more likely to have commercial tenants.

Overall, those factors are reasons the planning department expects most new units to be built in commercial zones even if most parcels subject to incentives would be in residential multifamily neighborhoods.

A coalition of advocates for low-income households is asking the city go further.

They want officials to mandate developers replace each rent-stabilized unit they demolish with not one but two income-restricted affordable units. They also want building incentives to apply to high-opportunity single-family zones like those in Westwood and Studio City.

Doing so, they say, would provide a few benefits. It would make less financial sense for developers to replace existing rent-stabilized housing, and some builders would instead choose to build in single-family areas where they'd demolish houses an occupant has chosen to sell.

By adding low-income units to these areas, it would lessen a pattern of racial and income segregation that a city-funded report determined single-family zoning plays a key part in maintaining.

"We want to make sure that we are able to break the curse around the decades-long segregation of Black and brown communities in Los Angeles," said Estuardo Mazariegos, a co-director of the Alliance of Californians for Community Empowerment, a group that advocates for low-income communities.

Because the city is proposing to allow developers to build more where existing apartments are, but also imposing additional costs through new tenant protections and replacement requirements, the planning department said it's unclear whether more rent-controlled units would be demolished in the future than are today. But Greg Bonett, an attorney with pro bono law firm Public Counsel, said the city's current proposals create a risk that could happen.

He said displacement is also disruptive and departing tenants could "fall through the cracks" and not receive their money, find temporary housing and return to a new home.

The planning department warns two-for-one replacement could backfire.

In a staff report, it said it would probably prove too costly for many developers and could significantly reduce the construction of housing, including units that are mandated to have rent affordable for low-income households, not merely rent-stabilized.

While the city's rent stabilization ordinance limits annual rent increases for a tenant — usually to 3% or 4% — it does not mandate rent be affordable. Landlords can also set the rent wherever they want each time a tenant moves out.

"The policy challenge is how to appropriately balance critically important goals around housing production with equally important preservation and tenant protection goals," the department wrote in a recent report.

Last fall, the city dropped plans to include some single-family zones in its incentive programs after objections from homeowner groups. The planning department, however, has presented the council with several options to include these areas if they want to.

In letters to the City Council, many residents of single-family zones told their representatives to hold firm. They said allowing apartment buildings in their neighborhoods would reduce opportunities for homeownership and decrease their quality of life by adding more traffic. They noted that the city found it could meet state housing mandates by planning for redevelopment in commercial and multifamily neighborhoods while leaving single-family zones alone.

"Those of us who sacrificed many years of their lives to live here now must be just fine with another group that is probably younger now being placed by the government into our community?" one San Fernando Valley resident wrote.

Maria Briones has another perspective.

The 69-year street vendor said she lives in a motel near the Los Angeles Memorial Coliseum, arriving there after a stint of homelessness that occurred when code enforcement forced her to move from an illegal garage she rented for around $500 a month. Now a member of the Alliance of Californians for Community Empowerment, she is advocating for low-income housing in single-family neighborhoods near good jobs and schools.

"Why do only rich people have the right to have a beautiful house, beautiful surroundings?" Briones asked. "Why can't low-income families have the same thing?"

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