Page 37 - AAGLA-JULY 2022

Member Update
California’s Complex Housing Crisis
New units are needed, however, owners must also earthquake retrofit vulnerable multifamily buildings to avert disaster.
By Ali Sahabi, Chief Operating Officer, Optimum Seismic
TCredit must be given to apartment owners who have completed seismic retrofitting.
press conference in October, that also marked the date of the “Great California Shake-Out” earthquake awareness observance. After many years of promoting building safety in Los Angeles, this milestone represents a growing resilience not only for the city but increased safety for the throngs of families making these buildings their homes.
Earthquake Safety Milestone: City of Los Angeles Mayor, Eric Garcetti, thanks Optimum Seismic’s Chief Operating Officer, Ali Sahabi, for Optimum’s efforts in helping the city to reach the milestone of completing 7,000 seismic retrofits of multifamily buildings.
The success was due to the foresight of city leaders who recognized how critical it is to preserve and protect existing housing that houses tens of thousands of Angelenos. Credit must be given to apartment owners who had the work completed. They put time into carefully evaluating their options and invested money to protect their properties and to make them safer for their tenants. While 50% of the cost of a retrofitting project can be recovered through rent increases under the City of Los Angeles’ ordinance, housing providers have “footed the bill” for the rest, and the sacrifice of putting that money upfront was a burden for many. The sacrifice and efforts made by landlords to preserve buildings and protect lives should be applauded.
Hundreds of Thousands Could be Left Homeless
The California Earthquake Authority estimates that as
he number of apartments available for rent in Los Angeles County is the lowest it has been in two decades, with the vacancy rate in the first quarter of 2022 at its lowest since 2001, the Los Angeles Times recently has reported. As a result, rental housing prices are at a premium, with higher competition
for available units that has led to bidding wars among competing applicants.
From a business perspective, this has given Los Angeles Area landlords pricing power they have not had for several years. On the “flip side,” a shrinking inventory of available units underscores the potential for an expanding housing crisis – surpassing the supply issues we have seen in recent years. This is especially true when you consider how vulnerable our region is to earthquakes.
Five years ago, Los Angeles voters approved a $1.2 billion bond measure to help find permanent shelter for the city’s growing homeless and at-risk populations. In the time since then, according to an audit from Los Angeles City Controller Ron Galperin, the city has established 8,091 units “spread across 125 projects in various stages of development,” Dan Walters of CalMatters reported in March of this year. The costs for these units have averaged $559,846 each – with 14% exceeding $700,000 per unit, and one unit topping out at $800,000. Given such exorbitant cost of constructing housing units in the City of Los Angeles, it gives rise to an obvious question: What if we invest some of the bond proceeds into improvements that extend the life of existing buildings, particularly units that may be at risk of collapse in a major earthquake? In 2015, when Los Angeles Mayor, Eric Garcetti, signed into law the city’s seismic retrofitting ordinance, there were 12,558 older, soft-story structures identified as at risk of failure during a large seismic event.
Optimum Seismic joined the mayor last year to celebrate the milestone of completing 7,000 retrofits under this law. “Here in Los Angeles, we’ve made resilience a priority, retrofitting our most vulnerable buildings to protect Angelenos’ lives and property,” Garcetti said at a joint
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