From 1984-1996, Santa Monica implemented a policy to allow renters an opportunity to purchase their units under certain conditions, one being a majority of their fellow neighbors agreed to do the same. The program, the Tenant Ownership Rights Charter Amendment, or “TORCA,” was passed by voters but, after mixed results, was allowed to expire 12 years later.
TORCA had several shortcomings, among them – it allowed building owners to sell voluntarily vacated units at the market price. Thus, it created a tremendous incentive to harass renters in rent-controlled units into leaving. Even one’s fellow neighbors might put tremendous pressure on them to either buy or get out. It also allowed real estate speculators to buy TORCA units, fix them up, and flip them for high prices without planting roots. In addition, if TORCA owners decided to live elsewhere and rent out their units, they had little to no control over when they could return to living in them. The renter living there now had rights (a good thing) and could essentially stay there in perpetuity unless stipulated in the rental agreement. That also meant owners couldn’t sell their TORCA unit while someone was living there.
On Tuesday evening, Michelle Gray, Chair of the Santa Monica Housing Commission, presented on behalf of her colleagues a report titled, “Creating Equity: Affordable Home Ownership.” The 31-page report includes many laudatory goals and states unequivocal facts about the state of homeownership, who is benefitting, and who is being left behind. But the Commission’s goal is also clear – create a “TORCA 2.0.”
The Housing Commission’s Recommendations, which are numerous, seem to be an honest attempt to avoid some of the pitfalls of the original TORCA program. And we like that the commission is dedicated to an equity lens in finding opportunities for those in a position to buy out a unit. In fact, we want to help them trumpet the fact that people of color are being left behind and frozen out of home ownership and that it’s a problem increasingly getting worse. Effective affordability models need to not only be found, but utilized to help even the scales of homeownership and make it a reachable dream for all. Bottom line: We support the goal.
However, we have questions, and we’re not alone. First, why push this now? It’s like that joke – “In this economy?!” But seriously so. We’re currently in a homelessness crisis, more than half of renters are rent-burdened, and because of that, we’re in the middle of a mass eviction epidemic throughout the L.A. area. Who, pray tell, is clamoring to buy when most are barely making rent payments? Does the Housing Commission really have the luxury of diving the city head first into, of all things, another TORCA experiment?!
In fact, Gray acknowledged the Housing Commission wants some of the city’s Housing Trust Fund dollars to go toward funding these efforts, money that would have to be taken away from its mission of developing affordable rental housing and keeping the vulnerable indoors. They also haven’t really thought through a solid funding source for the construction of new housing that would be dedicated to affordable units for sale. Therefore, the program would mean taking existing rental units off the board.
Councilmember Caroline Torosis also exposed the Housing Commission’s lack of comprehensiveness in developing the report, as they apparently didn’t even think to call the Rent Control Board and collaborate with them. Hello? We’re talking about renters buying their units. The Rent Board should have been their first phone call. But sadly, we suspect that this Housing Commission doesn’t really want the Rent Board’s input.
Torosis was also right to point them in the direction of advocates working on something called the L.A. County Tenant Opportunity to Purchase Act (TOPA), who have been studying new models for shared equity in homeownership. Torosis emphasized that the city needs to be looking for models that would avoid the pitfalls represented by Santa Monica’s failed experiment with TORCA. Ms. Gray didn’t seem to know about TOPA.
It’s also unclear if Gray fully understood how many low-income housing programs work., as Mayor Gleam Davis seemed to be informing her, for example, that many are specifically intended only for the development of affordable rental housing and its construction.
Davis also educated Gray on the difficulty the city has had in incentivizing the development of the “missing middle,” elusive condos that sell in the hundreds of thousands – not over a million – that developers have said don’t really pencil out under existing incentives.
The Housing Commission vaguely came up with models used in San Diego or New York but didn’t really go beyond the surface to determine if those cities’ efforts were successful or befitting our particular city. It’s almost as if they slipped them in the report to check a box.
Councilmember Oscar De La Torre tried to help cover for the commission, stating they were there to merely “plant a seed.” But it was abundantly clear they are not fully aware of the numerous challenges before them in pulling this off and are clearly not the ones with the bandwidth, budget, or even mission to fully develop a program. But therein lies another rub, because they are thrusting a debatable priority into the hands of city staff and the city council.
Again, at a time when Republican governors like Ron DeSantis are trying to destroy corporate responsibility initiatives and diversity, equity, and inclusion efforts, we should be honoring the Federal government’s stated commitment to increasing home ownership, especially among people and families of color and lower-income buyers.
But given the housing and affordability crisis renters are currently enduring, we think this work needs to be that desirable elective a student takes on the weekends, and the school week still needs to be focused on things like rental assistance and right-to-counsel programs.
Photo by marchmeena29
Disclaimer: The author of this editorial is a former member of the Santa Monica Rent Control Board and the Santa Monica Housing Commission