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Op-Ed: The case for rent control after the Winstar takeover of Evans Apartments

  • In January, Evans Apartments, built by a former Alhambra mayor, was sold to Winstar Properties. Winstar pushed almost every tenant out with rent increases of over 50 percent. Photo by Bud Taylor.

  • Bud Taylor moved into Evans Apartments in late 2016, after a demoralizing apartment hunt in Highland Park. After the building was sold to Winstar, his rent was raised from $900 for a studio to $1,420 a month. Taylor moved into a cheaper, more spacious apartment nearby but struggles to make ends meet while pursuing a career as a writer. Photo by Bud Taylor.

  • Evans Apartments was built by former Alhambra mayor Montivel Burke. After his death, his children Norma Jean Evans and Talmage Burke inherited the properties. Evans' half was sold to Winstar Properties by her daughter Paula Peterson, while Burke's half was inherited by his wife Gertrude after his death. She has not sold to Winstar. Photo by Bud Taylor.

Location

Alhambra , CA United States

Last January, Winstar Properties, a real estate investment firm based in Mid-Wilshire, bought the historic, family-owned Evans Apartments on First Street just north of Main in Alhambra and pushed nearly all of its tenants out with an enormous rent hike. I was one of those tenants.

Evans Apartments is far from the only casualty in Alhambra’s growing affordable housing crisis, but its fate is especially noteworthy — and disheartening — given its long ties to a prominent local political family.

In the early 1950s, Montivel Burke, a former Alhambra mayor and personal friend of Richard Nixon, built the apartments as part of a larger complex at the civic heart of his beloved city. It’s hard to miss: a row of several two-story buildings rendered in Spanish Revival style — bright white stucco exteriors with red-tiled roofs and stairways — and divided by grass-bordered driveways or garden-lined footpaths. The architecture’s simple elegance and symmetry stand out amidst countless drab apartments erected nearby.

After Montivel died in 1966, the property was split between his two children, Norma Jean Evans and Talmage Burke. Each inherited a symmetrical half: three parallel 10-unit buildings — plus smaller dingbat apartments tucked at the back property line — for a total of 36 one-bedroom and studio units.

An attorney by trade, Talmage practiced out of an office at his First Street apartments for decades. (His law sign still graces a street-facing facade.) He also served 15 terms as mayor, earning the nickname “Mr. Alhambra” for his staying power and profound influence on the city’s development. His wife Gertrude Burke took over property ownership after he died in 2004. Meanwhile, his sister Norma Jean’s half, managed jointly and later independently, became “Evans Apartments.” When she died in 2010, her parcels passed to daughter Paula Peterson.

I moved into Evans Apartments in late 2016, deeply satisfied to have finally carved out a stable, independent life within my budget after two sublets and a demoralizing apartment hunt in Highland Park. I found management under Peterson to be friendly and attentive. Prices were fair. Family values seemed embedded in the business model. What came next, then, is all the more bewildering.

In January 2018, Peterson sold her property to WSP Value LLC, a holding company for Winstar Properties, for $6.85 million, according to the L.A. County Assessor’s Office. State LLC filings indicate Winstar CEO and President Jonathan Wintner as the likely buyer.

Winstar Properties did not return repeated requests for comment for this article.

Oddly enough, Peterson did not forewarn her tenants about the sale or even write a farewell letter after 60-plus years of family ownership. An apartment inspection the previous November was certainly a clue, but Peterson nor the manager were forthright as to its purpose.

Peterson did not respond to repeated requests for comment.

After the sale, Winstar took over management, dismissing our gentle-hearted superintendent Pablo, who had worked for the Evans and Burkes for decades. The onsite manager was also sent packing.

In February, Armageddon struck. Winstar slapped most of us with massive rent hikes. I was paying $900 a month for a studio. They raised my rent to $1,420, an increase of over 50 percent. Most other tenants got comparable 60-day notices. Everyone was distressed and angry. There was a collective sense that Peterson had thrown us to the wolves.

A few residents sought advice at the Housing Rights Center’s walk-in clinic at the Alhambra Library. Counselors told them we were out of luck. The rent increases were legal. There is no rent control in Alhambra. As long as Winstar did not discriminate against any single group, they could raise rent as high as they wanted.

“Unfortunately, if a city does not have a rent stabilization law, then a landlord more than likely can raise the rent as high as they wish as long as they provide the proper notice,” said Chancela Al-Mansour, executive director of the HRC.

“Even when there is no rent control, a landlord still must apply any increases fairly and evenly to all the tenants regardless of their race, religion, or immigration status,” she added, or any other protected category.

Our community was an ethnically diverse group of young and old — ranging in age from early twenties to late eighties — many a male bachelor, a few couples and families. Winstar was indeed indiscriminate. In the long run, no one was spared from the earth-shattering rent hikes.

“It was like a big slap in the face,” said a 28-year-old former Evans resident who chose anonymity over privacy concerns. His rent was upped about $500 a month. “It’s obvious that they just wanted everybody who lived there to be pushed out.”

Getting ahold of new Winstar manager Yvonne Low about his concerns over the increase was ‘like Mission Impossible,’ he said. When she finally called back, “She just — no sympathy, did not care at all,” he said.

Finding a new apartment was rough. He looked at about two dozen, but bad credit dashed his chances of getting approved. “I had to have someone cosign for me because I was getting declined like crazy,” he said. He ended up in a one bedroom in Alhambra near Target. The price tag? $1,450 per month, just above Winstar’s price for his studio, but the unit is way bigger and newly remodeled, he said.

Winstar initially spared a few old-timers from rent hikes. That changed this summer.

Larry Langston, 66, an L.A. native who moved into Evans Apartments in 1987, was paying $950 per month. Winstar upped it to $1,395. “I’m on a fixed income. I couldn’t afford that,” Langston said. He moved into a group home for homeless men in Pasadena in July.

In the end, nearly all tenants were pushed out.

The tragic irony is that renters living on the other half of Monte Burke’s historic complex remained blissfully unaware of our nightmare. Gertrude Burke’s half — managed by Pasadena-based Beven and Brock — never sold out to Winstar. The shared driveway dividing the properties became a looking glass between Manichean worlds. We could wave to neighbors paying affordable prices for units in a replica of our building. Lo and behold, Pablo still wandered the premise doing odd jobs!

When Winstar raised my rent, I inquired about moving into a vacant apartment on the Burke side and was told that a studio would be $850 a month. Unfortunately, it was in the building steeped in the shadow of a parking structure.

Winstar’s rent hikes forced us back into a local housing market where prices had risen steeply from even a year earlier. No studio was listed below $1,000 any longer. Then again, nearly every unit I looked at was more reasonably priced than Winstar’s. Within a mile radius, studios ranged from $1,050 to $1,250. I even viewed desirable one-bedrooms for $1,050 and $1,200.

While hunting, I attempted to negotiate with Low for a lower rate on a one-year lease, presenting my findings to her. Winstar would only reduce to $1,320, she wrote, a figure both unaffordable and, I felt, highly inflated for a roughly 320-square-foot studio.

Luckily, after a month and a half, I found a studio in a family-owned, century-old Craftsman apartment home nearby that was larger, didn’t sacrifice walkability, and had a more attractive, earthy interior.

The one catch: I now pay $1,145. I’m in the red monthly until I find a higher paying job that doesn’t compromise my creative goals. I work part-time in San Marino at the Huntington and hustle in the gig economy, mainly as a freelance writer and photographer, to make ends meet while putting aside time to finish my first novella (a task growing difficult as economic pressures mount).

This whole ordeal has me waxing philosophical — disturbed at the moral bankruptcy and greed in L.A.’s real estate world, the lack of rules curbing the destructive effects of speculative investment on cities like Alhambra with a high percentage of low-income renters. It doesn’t seem like what was done to us should be legal, and yet it was.

The City of Alhambra pays the Housing Rights Center up to $25,000 a year to counsel local renters, and yet the city’s own policies — a lack of housing regulation — ensure that HRC’s only message for those in our situation is “tough luck.”

“That kind of rent increase, that’s new to Alhambra, but it’s not going to stop without a change [in law],” said Al-Mansour.

This is a crucial moment for rent control in California. Proposition 10, on the state ballot this November, if passed would repeal the 1995 Costa-Hawkins Act, which is severely restricting the scope of rent control policies that California cities may impose. Its repeal would open the door for Alhambra to enact laws — including vacancy control — that would protect thousands of local renters from price gouging by unscrupulous landlords and the recurring nightmare of displacement.

Both Los Angeles Mayor Eric Garcetti and the Los Angeles Times Editorial Board endorse the measure, the latter noting that although the housing crisis is widespread, “each city has its own challenges and needs the flexibility to adopt its own remedies.”

Of course, for that repeal to matter, we would need to elect candidates to Alhambra’s City Council on November 6 who support Prop 10 and local rent control measures. Realtor Suzi Dunkel-Soto has come out against Prop 10. Meanwhile, Adele Andrade-Stadler, running against her for the 5th District, and Andrea Lofthouse-Quesada (1st District) have pledged support and are my picks for city council.

After all, how can tenants fight against these dollar-worshiping investors and developers — who don’t care one inkling about Alhambra or how their greed disrupts this community — when there are no laws on the books to protect us?

Editor’s Note:

Reached for comment, Gertrude Burke told the Alhambra Source that she was going to sell along with Peterson, her niece, but decided not to because of the property’s family history. “As long as I’m alive, I don’t think [we’ll] sell.”

Burke also said maintaining the apartments is expensive — she paid a lot recently to fix broken pipes — so views rent increases as inevitable, but believes Beven and Brock only raises rent about $25 every year. “We certainly don’t want to push anyone out,” she said.

Property manager Yvonne Low declined to comment when reached by phone last week. Beven and Brock did not return a repeated requests for comment.

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3 thoughts on “Op-Ed: The case for rent control after the Winstar takeover of Evans Apartments”

  1. To show the math:

    2018 Tax Assessment – $123,844
    2017 Sale Price – $6,850,000

    2018 assessed taxes (paid by old owners) – $4,830
    New taxes will be assessed at the current tax rate against the purchase price.
    6,850,000*.01178988 = $80,760 per year property tax

    Difference in property tax
    80,760-4,830 = $75,930

    Monthly difference in property tax costs
    75,930/12 = $6,327.50

    Monthly difference per unit in property tax costs
    6,327.50/12 = $527.29

  2. What a terrible situation and I am sorry to hear the experiences of these good people and how the increase in rents has dramatically impacted their lives. Certainly, large increases in rent are not welcome or affordable to many of us and it creates a strong argument in favor of rent stabilization.

    That said, there is more to the story that may not be well known.

    In looking up the property address and Assessor Parcel information, I can see that the old property taxes on this property were $4,830 per year.
    The APN is 5337-020-001 and on public records it shows as a 12 unit property. The new owner, with a purchase price of $6.85M, and Tax Rate of 1.178988 % (from the County Assessor page) will be paying $80,760 per year.

    The increase of property taxes on a 12 apartment building comes out to $6,327 per year PER UNIT. Divided by 12 months, the county has increased the carrying costs of each of the 12 apartments by $527 per month.

    For the new owner, the $80,000 per year paid to the county, city and state along with various bonds have to be paid. Assuming each tenant was paying ~$900 per month (like the author of this op-ed) and their rent increased to $1,420, all of that rent increase went to the pay property taxes.

    1. Evans Apartments is a 36-unit complex (comprised of two parcels, the one you mentioned plus APN 5337-020-004) not a 12-unit, so your math would have to be adjusted on that. (The answer per unit reduced to just a third of your quotient.) At least six units are one bedrooms as well, going for around $1,800.

      Therefore, based on your other tax calculations, only about a third of those rent increases would be needed to pay all annual property taxes.

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