Amid rising property prices, increased investment, and gentrification, longtime residents living in Los Angeles’ Latinx community of Boyle Heights and East LA were concerned about their future stability in the neighborhood. These concerns were heightened during the COVID-19 pandemic as residents faced economic hardship, rent arrears, and noticed affordable properties – many that are home to BIPOC residents and low-income families – were quickly acquired and flipped by profit-driven purchasers.
In response, local Eastside residents formed a community land trust, Fideicomiso Comunitario Tierra Libre (Fideicomiso), to foster greater community control of housing and take property off the speculative real estate market. While Fideicomiso organized to secure permanent affordability for Eastside residents, the community land trust (CLT) needed necessary funding and adequate staff capacity to acquire and preserve their first property.
- Located in unincorporated East Los Angeles
- Built in 1930
- 11 residential units
- Acquired in 2021
- LA County CLT-CDC Pilot Program: $2,790,250 – $253,659 per unit
- SPARCC and Genesis LA: Predevelopment funds $75,000
Founded in 1979 by a group of Japanese American activists, Little Tokyo Service Center (LTSC) is a social service and affordable housing community development corporation working to provide culturally and linguistically sensitive services to Los Angeles’ Japanese American community, seniors, and underserved individuals and communities. LTSC has developed community facilities, commercial spaces, and more than 950 units of affordable housing throughout Los Angeles County and continues to serve the Little Tokyo community and surround Asian Pacific Islander and other low-income communities.
Fideicomiso Comunitario Tierra Libre (Fideicomiso) was founded in 2019 through a community-led effort as the first community land trust in Los Angele’s East Side. Fideicomiso works to secure stable and quality housing and address the impacts of disinvestment for Boyle Heights and East LA residents. FCTL seeks to provide low-income individuals and families with wealth building opportunities, foster community control and promote grassroots decision making, and protect residents from speculation and displacement.
Shortly after Fideicomiso’s formation, the Los Angeles County Board of Supervisors launched the Pilot Community Land Trust Partnership Program, a program aimed at facilitating partnerships between emerging CLTs and established community development corporations (CDCs) to preserve affordable properties at risk of market conversion. The program paired five CLTs-CDCs partnerships with a collective $14 million in public funding to support the acquisition, rehabilitation, and continued affordability of small to medium multifamily properties with 4-20 units in Los Angeles County’s communities with high displacement risk.
Through this pilot program, Fideicomiso partnered with Little Tokyo Service Center (LTSC), a nonprofit with a long history of community organizing and affordable housing development in Los Angeles’ Little Tokyo neighborhood. In 2021, LTSC acquired an 11-unit, fully occupied multifamily apartment building at 700 Simmons Ave in East Los Angeles. Once the Simmons property completes rehabilitation construction, LTSC will transfer the property to Fideicomiso, who will then transition the property to a limited equity housing cooperative ownership model, where tenants will own shares of the property.
Capacity Building to Develop a Replicable Preservation Model
Joint-venture partnerships are successful when they leverage each partner’s strengths, expertise, and balance risk. For organizations new to unsubsidized preservation, learning the preservation development process and sustaining this work can be a challenge. Meanwhile, affordable housing development organizations may not be rooted in a community they are investing in or familiar with local resident challenges and needs.
The roles and responsibilities of LTSC and Fideicomiso were established in a memorandum of understanding. As an experienced affordable housing developer with a successful track record, LTSC serves as the project manager of the Simmons property, acquiring the property and assisting the CLT to acquire its first property as a relatively new organization. As a resident-led community land trust, Fideicomiso laid the foundation to transition its first preservation deal to a community owned model by organizing the Simmons’ property residents and nurturing relationships with East LA residents, engagement that is necessary, vital, and often underestimated for long-term community stewardship.
LTSC has made life and safety repairs, such as replacing the roof, and plans to do a full property renovation starting in early 2023. The building’s plumbing and electrical system will be replaced and light to moderate renovations will occur in each unit, which will require temporary resident relocation. LTSC will continue to manage the property as Fideicomiso learns standard operating and asset management procedures. Meanwhile, the CLT will continue to engage and conduct owner education to prepare residents to become cooperative owners.
Property Identification Informed by Community Engagement
To identify acquisition opportunities, LTSC and Fideicomiso hired a broker to focus on properties in East Los Angeles. Before the Simmons property was identified, LTSC and Fideicomiso faced fierce competition from private market buyers for properties on the market, including cash buyers, local investors, and REITs.
Resident engagement played a vital role when the Simmons property went on the market. To connect East LA residents with information on tenants’ rights and resources, Fideicomiso went door knocking to rental properties that were listed on the market, including the Simmons property. Through this direct resident engagement, Fideicomiso gathered intel about the property and discovered it was a good candidate for preservation. Fideicomiso and LTSC learned that families in the Simmons building were longtime residents – some living in their homes for more than a decade – yet were on the brink of eviction.
One Stop Shop for Acquisition and Rehabilitation Funding
Assembling multiple sources of funding within a narrow timeframe to competitively bid for properties listed on the market is a key challenge for organizations preserving unsubsidized small- to medium-multifamily properties. Enterprise’s Strong, Prosperous, and Resilient Communities Challenge provided a recoverable grant to the partnership for predevelopment and due diligence activities. Public funding from LA County’s CLT Pilot Program was key to this project’s success, providing upfront and flexible acquisition and construction funds, a rare occurrence. This public subsidy streamlined the acquisition process, reduced transaction costs, and saved the partnership time, which allowed them to quickly purchase the property amid competition from private market purchasers, start renovations, and keep rents at an average affordability level at 50% AMI until the property transitions to a tenant owned cooperative.
From this joint venture partnership between LTSC and Fideicomiso, the Simmons property will receive property improvements that will improve the quality of life for existing residents. The property will remain affordable in perpetuity and longtime residents will become owners, securing their stability and future in East LA. This partnership also increased the capacity of Fideicomiso and LTSC: The pilot program’s CLT-CDC partnerships have formed a coalition to continue and scale preservation efforts and advocate for additional resources. To date, the coalition has acquired and preserved eight properties, proving the success of the pilot program, and raised philanthropic resources for staff and operations and due diligence costs on additional acquisition opportunities.
Interview with Takao Suzuki, Little Tokyo Service Center, August 2022
Implementation of the Los Angeles County CLT Pilot Program, Roberto Garcia-Ceballos, Co-director Fideicomiso Comunitario Tierra Libre