A world away from the Palisades and Altadena, landlords try to sell fire victims on living downtown

With thousands of houses and apartments lost to wildfires in an already tight housing market, landlords in downtown Los Angeles are trying to woo displaced fire victims to a more urban setting far from the burn zones.

A social media campaign has been launched by members of the Historic Core Business Improvement District to get people searching for housing to consider moving into one of L.A.’s oldest neighborhoods, where century-old office and retail buildings on blocks south of City Hall have been converted to apartments.

Downtown is outside the familiar haunts of most displaced people, district Executive Director Blair Besten acknowledged, but she said she hopes the availability and price of apartments there might tempt them to consider it.

“The Westside and the Pasadena area might be saturated with people wanting to move in proximity to where they lived before,” Besten said. “That might not be possible.”

California

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Quite a few displaced people were already apartment renters. Real estate data provider CoStar said 480 multifamily buildings with 9,500 rental units were potentially damaged or destroyed within the fire zones.

The affected properties are overwhelmingly older, small-scale apartment buildings owned by mom-and-pop landlords. Nearly 75% of the buildings contain fewer than 15 units, CoStar said, and have an average age of 71 years. Many of them lack common modern amenities such as central air conditioning, fitness centers or pools.

The cost to rebuild such modest housing “poses a nearly insurmountable challenge,” CoStar said. “New apartment construction in Los Angeles has skewed toward luxury, with units completed last year averaging $3,300 in rent, a stark contrast to the rates associated with the rental properties in the fire zones” where the average asking rate was $2,640 per month.

Modern seismic building codes and inflation-driven construction costs further compound the difficulty of redevelopment, making it financially prohibitive for many property owners, CoStar said.

The Historic Core program has about 500 units available at an average of $2,046 per month, Besten said. To increase the appeal to fire refugees, landlords are offering leases as short as three months and will arrange with furniture rental businesses to furnish units for new tenants.

“We’ve tried to very quickly furnish some homes, including kitchen essentials and bath essentials,” said Laurie Miskuski of landlord ICO Group. “There are many people who have lost everything, and the last thing they need to be worrying about is a toaster or a coffee maker.”

Among ICO Group’s properties is the Mercantile Lofts, which opened as a department store in 1907 and was turned into housing more than a decade ago. ICO also owns the Broadway Lofts, a 1907 Renaissance Revival-style building also dating to 1907.

The fires that turned people out of their homes have been “an incredibly traumatic event,” Miskuski said. “We’re trying to extend a hand and say, ‘Hey, we may not be the neighborhood you’re used to, but we are a vibrant neighborhood with many things to offer where more people are welcome.’”

The bulk of the units included in the business improvement district’s outreach program so far are in five historic buildings that have had problems of their own as a new owner took on deferred maintenance and ejected tenants who weren’t paying rent.

“COVID did a lot of damage to downtown in a lot of ways,” said Mark Sanders, co-founder of landlord Fifteen Group. “Habitually, people were not paying rent, and the eviction moratorium didn’t help.

“It’s taken us a long time to cycle through a lot of those units, which is why we have this vacancy” well above market standards, Sanders said.

He hopes that the ample vacancy in his buildings that include the Marley Lofts and the Thurman Lofts might even be a selling point to people displaced by the fire who might want to live close to family members, friends or members of their church or synagogue.

“Now they have a chance to kind of stay together by renting in the same building,” he said.

The business improvement district is looking to add other landlords to the appeal program, which Besten hopes will also improve the public image of the Historic Core.

The district’s advertising campaign on Instagram focuses on the availability of short-term leases and the chance to live in architecturally historic buildings in a neighborhood that has shops, restaurants, offices and entertainment in walking distance.

Once the commercial heart of the city for business, shopping and entertainment, the district fell on hard times in the late 20th century as businesses moved a few blocks west and department stores followed their customers to the suburbs. It revived after 2000 with the arrival of apartments, trendy stores, bars and upscale restaurants, but the tenor of some streets changed again during the pandemic as homelessness became more prevalent.

Reaching out to people displaced by fire offers district stakeholders an opportunity to reach out to “people who have been curious about what it’s like to live somewhere and not have to get in their car for an entire weekend” she said. They may ask, “what does that look like and would I be willing to give it a shot?”