Taylor Avakian
seems like every year it just gets harder and harder be a landlord
December 31, 2024 · 1 hr 17 min
LA Housing Crisis: Inside Look from Former HACLA Commissioner
With Dan Tenenbaum — Former HACLA Commissioner & Real Estate Investor
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Dan Tenenbaum, veteran real estate investor and former commissioner for the Housing Authority of the City of Los Angeles (HACLA) discusses the complexities of affordable housing and real estate…
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Episode show notes
Dan Tenenbaum, veteran real estate investor and former commissioner for the Housing Authority of the City of Los Angeles (HACLA) discusses the complexities of affordable housing and real estate development in Los Angeles with Taylor Avakian. In this episode, we uncover the challenges facing apartment owners, developers, and real estate investors in navigating LA’s housing market. From the impact of rent control policies and the controversial Measure ULA ("Mansion Tax") to the opportunities presented by Project Homekey, this episode dives into the pressing issues shaping the Southern California housing landscape. We also discuss the hurdles of Section 8 housing, skyrocketing development costs, and how LA’s unique real estate dynamics affect investment strategies. Whether you're a seasoned developer or new to real estate investing, this episode offers valuable insights and practical tips to thrive in the face of LA’s housing crisis. 0:00–2:30 - Introduction to "No Vacancy" and Los Angeles Apartment Market 2:31–6:45 Dan Tenenbaum’s Journey to Los Angeles and Multifamily Real Estate Beginnings 6:46–10:20 Growing a Multifamily Apartment Portfolio in Southern California 10:21–14:50 How Dan Tenenbaum Became Involved in Affordable Housing in Los Angeles 14:51–20:15 Innovative Affordable Housing Initiatives by HACLA in Southern California 20:16–26:40 Overcoming Affordable Housing Challenges in Los Angeles and Beyond 26:41–32:10 The Role of Upzoning and Market Dynamics in Southern California Apartments 32:11–36:00 Advocacy and California Apartment Association’s Role in Housing Policy 36:01–41:30 The Impact of Measure ULA on Los Angeles Multifamily Housing 41:31–47:15 Challenges of Rent Control Policies for Los Angeles Apartment Owners 47:16–51:50 Section 8 Housing and Vouchers: Risks and Rewards in Southern California 51:51–57:30 Revitalizing the Historic Synagogue in Boyle Heights for Community Development 57:31–1:01:00 Future Opportunities in Los Angeles Multifamily Real Estate 1:01:01–End Closing Remarks: Solving the Southern California Housing Crisis Connect with me: Website: https://www.thegroupcre.com/ Email: taylor@thegroupcre.com X: https://x.com/TAYVAY_ LinkedIn: https://www.linkedin.com/in/tayloravakian/ #LosAngelesRealEstate #MultifamilyBroker #LandlordTips #RealEstateInvesting #PropertyManagement #TenantScreening #RentalMarket #LosAngelesApartments #RealEstateStrategy #TaylorAvakian #ApartmentOwner
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Episode transcript
This 13,935-word transcript is matched to English (Original) automatic captions. Timestamps seek the episode player to the matching passage.
0:00–10:00
Dan Tenenbaum
the timing of now limiting the rent increases after what apartment owners have gone through with multiple years of no rent increases the LA County Board of Supervisors voted unanimously to extend the local rent relief when the city of La extended the eviction moratory one more year after the state almost zero compensation for apartment owners in the RSO it says reasonable return for apartment owners well we have not had reasonable returns for multiple years never mind all the increase in expenses that 100 to 200% increases
Taylor Avakian
and insurance waste water power everything has gone up significantly more than you can raise their right question
Dan Tenenbaum
is whether it will convince the politicians to to rethink what they
Taylor Avakian
have done welcome to no vacany where I share conversations with LA's top multif family owners investors and Visionaries I'm your host Taylor ven the founder of the group and I specialize in the sale of apartment buildings in Los Angeles on this show we cut straight to what matters Market insights and real world strategies straight from LA's multif family icons to help you navigate one of the most complex real estate markets in the world Southern California enjoy welcome to the podcast my name is Taylor Ven and my esteemed guest who knows everything about affordable housing in Southern California Dan tabom is here to tell us about everything he was actually on the inside of the city and dealt with the city council and worked on some boards and governments and so he's going to tell us all about that Dan thank
Dan Tenenbaum
you for being here glad to be here I'm there are better affordable housing Specialists than I but maybe not ones that that only manage uh an an own market rate department so that that'll be my Niche yeah exactly so so tell
Taylor Avakian
me about that so walk me through a little bit um just to give the listeners a little bit of background like you from Montreal originally you came here to something Califoria and how did the apartments Acquisitions come and then how did you get into the
Dan Tenenbaum
affordable housing sure so um I mean I moved here in 1992 so it's been quite a while okay so you're La native yeah and and if you come from Montreal the weather aspect is important part but the other part actually was the entrepreneurial opportunity opportunity to start off in a new place and and kind of feel like it's an environment where you may not know as many people but that if you can make things happen and you can you know you can do something in fact so in that way the American dream and the California Dream I've really been able to uh benefit from that and um so yeah my my first acquisition is back in 1995 where you came here to buy buildings I came here to start a business I didn't know what that business was going to
Dan Tenenbaum
be like and it started off with me and a few friends just buying a small 14 unit apartment building uh in Burbank that was still own um and um just yeah putting my whatever you know $50,000 in savings which was most of my uh liquidity at the time after graduating from business school moving out here without a job um and um and so yeah so three years after arriving I I I bought the first building and did that on the side while I was working for Disney and that ended becoming the the business I didn't know that I thought it was just going to be an investment at the time but that became my my focus and we got investors and uh started growing and then I became basically a a real estate syndicator where we're buying larger and larger apartment buildings and eventually I gave notice to Disney
Dan Tenenbaum
and they been doing this fulltime since
Taylor Avakian
1998 wow okay so so from 95 to or 94 to 98 is when you grew the portfolio and how
Dan Tenenbaum
big did the portfolio become uh well during that time when I was still fully employed yeah um uh I we we I think we had purchased four buildings at that time and I gave notice when we got uh laner approval on the fifth so at the time if I doing my math correctly about 80 units across four buildings uh while I was at Disney and then when I got loan approval for a 76 unit building uh further west in the valley in Tarzana that's when I gave notice and uh been doing that ever
Taylor Avakian
since did was it enough money with five buildings where you could live or was it like okay this is just enough but now I got to go buy more to be able to afford the fees and you know know cuz if you're doing syndication full-time like you don't see a lot of money for the first couple of years typically um so did
Dan Tenenbaum
you have enough money to drive well I had the benefit because I syndicated the deals I I was also the property manager so the property management fees carried me over to help me pay the rent for my basically my one-bedroom apartment I was working out of a breakfast nook in that you know in in that one bedroom apartment so yeah no I mean I had low expenses at the time as I was growing it I had you know you know very little support of than a part-time bookkeeper um and and some man managers that i' had hired uh that were offsite uh you know not working with me in my apartment um so yeah I had to have low expenses and and that's how it started but yeah no I was thankfully for the management fees helped carry over that that allowed
Dan Tenenbaum
me and I've always tried to be in a position where I didn't have to buy deals just to to have income coming in and that's where the management fees have always coming we've always self-managed to this yeah it helps it creates a discipline that you know we maybe attempting just to go out and buy further buildings just to create fees and and increase business uh revenues and stuff like that that that was I've always been disciplined in just purchasing things I really believed it where were the First Investors that you got to help invest so I mean it's a story of you never know who would be your you know your investors or how how or how random things could happen but it literally was um on a plane from Montreal to Los Angeles where I just was being social I recognized uh guy who
Dan Tenenbaum
I knew lived in La he was an actor who lived in uh LA from Montreal who was in my younger brother's grade and that's about all I knew about the guy I said hello we ended up chatting for a while and sitting next to each other on the plane and turns out his father had an investor group actually in Montreal who um they invested in real estate and that I maybe try to call call them and see if they might be interested and so I followed up with them and the next time I was in Montreal I I showed them a a potential type of deal that I was seeing at those days and and I presented all to to you know strangers basically wow uh around the boardroom about you know five different uh s of friends and I
Dan Tenenbaum
said well if I could bring you this kind of a deal in the future with these kinds of returns and this is the strategy and at the time it was you know around the studio and explaining what the long-term benefit of doing that would be and um they went around the um the boardroom uh table and each said that they were interested one by one and I still remember to that day wow wow okay I I just raised my first amounts of money and that was just the beginning of a long-term relationship with those folks and of course I've grown it ever since but those same that those same groups and now families are are still were involved with the a lot of our investments after all these years
Taylor Avakian
that's crazy the on an airplane man you never know I'm always sometimes I'm like I put my headphones on and I'll listen to podcast or movie but sometimes I tell myself shoot I should try to talk to people on here because you never know you never know where do it you know especially when you're just getting started you have to kind of keep all the options open you got to make things happen you got to be yeah network is is huge um and so okay so so 95 you do this or 98 you do this full-time full-time 98 and so from 98 till tell me to today like what did the portfolio growth look like what was the trajectory there
Dan Tenenbaum
we've kind of abbed in float so we we we bought um buildings as large as 170 units uh where we bought another one that was uh about 78 units almost next door so you know in cond Parks almost like a 250 unit uh complex that we were owning and operating uh so at that time we probably got up to uh 800 or so units and and uh now we're down more into the 500s um so you know we've always I've always kept it a medium siiz um yeah try just kind of uh medium siiz that it you know you always have employee issues on the property manager side but it seems to be easier to manage and still large enough to get quality people to manage the properties and maintenance you know full-time maintenance that allows you to have be more directive and control you know
Dan Tenenbaum
what goes go on to to have higher quality service to the residents that's
Taylor Avakian
awesome um so then walk me through how you became part of this affordable housing you know U how how you became part of Los Angeles affordable housing community because you eventually ended up working for hacka right the city of Los Angeles and so walk me through how
Dan Tenenbaum
that happened so um it it uh it really started in a major way when I was appointed by mayor Garcetti to become a commissioner for the Housing Authority for the city of Los Angeles so that's the agency that oversees all the public housing but also the whole section 8 program for the city of Los Angeles so that was the the the the part of what I've done that's probably had the mo the largest impact on affordable housing but I I had been already involved um with various homelessness organiz ations
10:00–20:00
Dan Tenenbaum
as the kind of quote unquote landlord advisor um as you probably know there's these uh different nonprofits path brilliant Corners Etc that now have established programs for what they call uh scattered side placement of homeless that means basically they they put in one indiv could be one individual in a a market rate apartment building and without any specific services offered on site but they would provide the social services to them um scattered sites so they go from one building to the next but basically we would get at you know Market rents from them um and you know high security deposits Etc so um I was the one who was as and there were other uh apartment owners as well that said you know you need to have you know much higher security deposits if if
Dan Tenenbaum
you're going to convince parman owners to uh H the homeless to are market rate say you need to be able to be aggressive on the rents uh to convince them uh you need to have a one phone number to call if there's a problem so just you know those kinds of examples of uh you know quick approval process and and payment to secure the apartment and so all all of these kinds of factors that uh went into uh helping them put their programs together make them landlord friendly
Taylor Avakian
I was part of that and then that led to Garcetti do you is it you like run for that position or did they it's
Dan Tenenbaum
an appointment it's an appointment um and um you know I think they saw that because I was involved with the landlord stuff because I was been involved with Civic things uh in boil Heights we can talk about that a little in the a you you know about this uh large historical synagogue that we're redeveloping for the benefit of the local Latino population over in uh boil Heights uh they saw that I I was not necessarily just a you know a landlord who doesn't care I'm someone who was uh put in the time and effort to who cares about the community and and um and frankly you know when when you have to convince apartment owners to accept Section 8 um and you need to be able to be a landlord to thousands of public housing residents it's very good for the city to have someone with the expertise of owning
Taylor Avakian
and operating multif family totally I think that's how a lot of it should be is hey the private sector tends to understand a little bit more about how to get done if you know what I mean and understands the nuances and running these B businesses and these buildings because they do it on a daily basis like that is their profession so I agree with you on that and um and then obviously this was what time frame did were
Dan Tenenbaum
you the head of commissioner so uh about that say I want to say 2016 to 2020 to okay and what were
Taylor Avakian
the initiatives during that time period because the reason I ask is if from outside people looking into Los Angeles right and and all the news outlets and everywhere Los Angeles is they got a homeless problem or they got crazy high Sky rents like it's just Doom and Gloom everyone shits on California like what was the internal discussion when you guys were there and what was the the issues you were trying to solve and and what were some of the things that you guys implemented to try to help some
Dan Tenenbaum
of that yeah well well first of all I mean objectively we have a significant major problem that everyone recognizes whatever your political stripes are that it's bad um having said that it's they actually for the last three or four years we've been housing more people than we ever have so it's it's that people are still falling into homelessness so you know we can talk about some of the efforts that that the they if these efforts had not occurred as bad as things are things would be worse so about that and we can't we we don't want you know that's kind of almost unimaginable because we there's probably very few communities within the city or and adjacent Community counties Etc that are not impacted byess so imagine being worse well at least we're that so that's the good news it's not it's not worse but yeah so so the
Dan Tenenbaum
the the um you know one of the main initiatives related to homeless that the Housing Authority got involved with and that I was um you know much more involved with as a board member and again a board members just overseeing you know a large organization and trying to provide uh feedback and Direction um the main thing was the uh the acquisition program and uh specifically the project hom key Acquisitions so the way that worked is during covid the governor one of actually his most most Innovative programs I think in general was that he provided um the opportunity to purchase brand new buildings or existing buildings that are vacant uh or and or which hotels and motels can be more easily made vacant or at that time a lot of people were not staying in hotels
Dan Tenenbaum
and motels so those were available too to acquire them and use those properties to house the homeless and what we saw was the benefit of that in terms of because they had to be readily available and vacant as a criteria to be able to House people right away that became a create a sense of urgency and the fact that a lot of the development that typical development uh of affordable housing requirements were not necessary we could buy from anyone from a market rate developer who was just finishing who had planned on renting it to the general public but we were as a Housing Authority were able to purchase and we were able to purchase over 2,000 apartment units over two years wow uh over you know I forget how many transactions but you know
Dan Tenenbaum
30 something transactions including hotels and motels including brand new apartment buildings but the average cost per unit was less than $400,000 mhm comp you compare to the to to what it is for the normal uh pathway way towards affordable housing in in our in our state which is $750 to $850,000 per unit so so that I'm super proud of I'm proud of hackas have been able to to do that I'm also proud that they um they've also put money where their mouth is when they have their own money to be used and that because the Housing Authority um gets uh management fees or Asset Management fees for overseeing non-public housing but still um affordable units they they use some of those funds to
Dan Tenenbaum
actually acquire uh existing apartment buildings and put a covenant on those and then provide secondate vouchers for those tenants so that there's an acquisition program outside of the uh project homy that still exists where and we've seen quite a few transactions I you you know of some of them uh some quite large ones and again it's it's uh the cost per unit is significantly lower because they're existing units so just by definition just like in the regular Market those are you know those sell for Less um and it's certainly less than the brand new affordable quote unquote affordable units that are coming on board and so this is a result of of a tradeoff and the tradeoff is the existing affordable housing you know requires long you know significant
Dan Tenenbaum
long-term uh costs and financing through this very formal process of many multiple applications it takes a long time huge legal costs and then once you're done with that then you have all these other additional um costs that that occur there you know all the the costs related to environmental costs all the Labor uh requirements and so when you add up a lot of those other costs it's you the the administrative the legal the the length of time it takes approval all of those things at so much cost it almost doubles the cost of affordable housing and so the Housing Authority was able to prove out this different model and it's a model that I think we need as a state and as a city and as a county we need to consider what are the trade-offs we are making by saying hey we need to have
Dan Tenenbaum
you know these environmental requirements on any affordable unit we need to make sure that we have prevailing wage on any project that has affordability well that's a choice and so you know these are well-intended choices does anyone necessarily think that we shouldn't have good environmental buildings or should we not pay people uh uh you know a a a great salary so that they can support their families I mean well intended but we have to make a decision and we and there are tradeoffs and the tradeoff here is that if we really believe that we need to that that we have a homeless and a housing affordability crisis then we have to prioritize and and I think we've just demonstrated examples of what the city and the state need to start considering that that no matter what up zoning we
Dan Tenenbaum
do in the city if it costs too much or I would I would go beyond just upzoning even if you speed up the approval process if these other costs are too significant then they don't get built and that's the problem that we have now
20:00–30:00
Dan Tenenbaum
that is a problem that the state has that's the problem the city of La has and so if we're going to keep doing the same thing we're going to get the same results the ed1 is a great initiative by the mayor it's it's speeding up the process but there's if all these other requirements either are be put put back or as some of these labor requirements I understand are coming back for Ed even ed1 and you know we're we're getting back to the same place so we we have to really start prioritizing uh housing and that means sometimes it means maybe disappointing some other groups who are pushing
Taylor Avakian
for other things why are they building uh brand new housing for example the the one in Santa Monica that they came out and estimated it was going to cost a million dollars per unit to build why are they doing that instead of taking the existing Properties or buying them from Market owners and then converting them
Dan Tenenbaum
into housing well that's a good question I mean that's you know I mean the the benefit of aand brand new building is the same benefit as project Hy which was you get a bunch of units you get the 100% of the units at the same time the benefit of buying an existing apartment building with people who are eventually going to move out or a good chunk of them even a rent control building over five years will probably have about three qus of their the residenc they move out um is that there's cash flow for the investor so there there there is a pathway uh frankly for a different way of doing it it just it does take longer because you have to rely on turnover and certainly there's not going to be any government agency is going to try
Dan Tenenbaum
to force anyone out uh just to put in a new affordable buyouts or anything like that yeah but but but yes that's a that's another great model to do it and or they can incent the private Market to do it and there's some incentives with property tax abatement and things like that for that but it's you know if it was strong enough we would see that as a much more prevalent uh tool but it's it's it's still in a limited uh usage be the Market's very efficient so there's a program that makes things uh worth it for developers whether it's affordable housing developers or market rate to do something people figure out right away so you know and and vice versa when there's impediments if you're not seeing things being built there's reason so you need to look Inward and that's what
Dan Tenenbaum
we need to do as a state uh to with wiart the housing we we need to look inward we need to say you know we've we've done all of these things State frankly has done quite has been very aggressive it's not just the adus they' they've increased all kinds of ways to you know to avoid local um jurisdictions from impeding housing production and yet it's still not being not happening and so we need to you know continue to look Inward and saying okay well maybe we're trying to try to please too many different groups at the same time if we really have a housing crisis let's focus on uh lowering the cost so that more can be built and you are on the board I believe of uh the California apartment association yes so I kind of have that interesting yeah very involved with a nonprofit but I'm also
Dan Tenenbaum
representing basically the most significant probably in the country uh Lobby group for uh housing yeah and let me just say that that that as someone who who is sees both sides I will I will tell you that the uh not only has is the ca uh a super sophisticated group as as we just saw with the uh the no on proposition 34 33 win and and the yes on 34 win yeah so I mean just you know just very sophisticated group what's amazing to me what's surprising maybe for others and and I'm I'm still an amazement is as you speak to the the elected officials at the state level you know the vast majority of whom are are Democrats they they will describe uh the people representing California partment associ ation as a great resource for them they are seen not as
Dan Tenenbaum
this radical you know selfish right-wing uh you know landlord group uh that doesn't understand the local you know what you know the fact that there's an affordability issue the fact that larger cities are are very uh tenant uh dominated and uh and those need to be considered um so what they see is what I see is that it's a it's a group that's you know understands the environment is working in the environment has empathy towards the affordability situation but does a but also does a good job representing uh landlords and and as bad as some things have been at this day level especially during covid things would have been a lot worse without uh CA uh representing them and what is
Taylor Avakian
your role there at at this time at least is it because your experience with the the public housing that they're bringing you on to kind of be this bridge to communication and understanding hey here's what's going on on here's what all the owners are dealing with like let's figure out a solution to solve both of our problems is that kind of what I imagine or is it a
Dan Tenenbaum
little different it's different it's I was involved with CA even before I got on the TLA board so I just been involved for a long time and I but but I think because it's so involved in in the legislation so I'm on the the the legislative committee where yes I'm involved with especi I mean we take positions on every single bill that comes out of of either the assembly or the state senate uh so everything that comes out of Sacramento we're taking a position so we either in you know we support it we're against it or or we're neutral on it um but but our board is what you know takes a position on that and and that's what the legislative committee does I'm I particularly get involved with affordable housing legislation and making recommendations to our
Dan Tenenbaum
group about that so there is some aspect of the affordable stuff but at the end of the day I'm just interested in that Confluence of of uh our market rate uh developers and owners with public
Taylor Avakian
policy so there's a problem that California has and you are very much intertwined in terms of getting the top level people and the government in the city discussing Solutions what are some Innovative strategies or ways that they're approaching it or how do you see a way for us to fix some of the issues that we're having as a state and a city
Dan Tenenbaum
of La well I think um we have to look what the impediments are what are the you know we we this the issue of of needing to build in general has been on the front burner for probably about a decade why why can't we build why won't they let it so it goes back to what we said before I mean I there there are interest groups who are want to make sure that labor costs you know labor gets paid a certain level the environmental requirement all of these things um are and frankly the whole uh State process of the that I think most most people would agree that the state process for affordable housing is Antiquated too bureaucratic takes too long is it and and is a beast and there's a whole
Dan Tenenbaum
bunch huge industry uh set up for it and it and there's a lot of barriers to entry frankly because you have to once you figure out the rules you're you're in and you know how to do it but if you're not it's you know if you're a market rate developer it's not like you could just easily switch into affordable it's a whole new financing system it's a whole new bureaucratic system there's a whole bunch of increased legal cost so that that needs to be worked on the state I I think they know it but they have to prioritize it well that's okay you know it well let's let's let's put some action behind it and then and and then going back to those other costs we have to lower the cost because the
Dan Tenenbaum
up zoning that we're doing here in the city and the state you know the adus was is a great example of of doing something new and it's super successful we need to be doing much you know more significant not no more business as usual uh and once we once there's enough people who who who believe that uh and make make it happen I think we'll see a lot more units being built and we have to build more affordable units that are you know affordable from the beginning and so with capital A affordable yeah uh I mean because what if we you know we build if we just build more units which is part of the problem think about all the people who are in roommate situations as the rents go down well they'll just instead of two people in one unit the rents will go okay I can afford that
Dan Tenenbaum
now so the demand is like you know is is is could could be made up you know just be having more units that you know or people will move to LA that might not have moved otherwise so you the people who are really at the B them wrong they're not necessarily Ben benefiting from that so so we we'll need to create affordable housing that are you know on on title for 55 years that needs to be a priority that's the good part about ed1 because that's what it will will create that's a good thing about the hacka acquisition program because they're going to be put these covenants on after acquiring we need to do we need to do more of that in addition to more uh supplies so that's interesting so
Taylor Avakian
you're saying that even if because I think they came out the city says we short 400,000 units you're saying that even if we had magically 400,000 units that were built in the city that the people who need or that they're trying to fill those units with would be taken out would be those would be filled by either current tenants who are splitting rent in the city or people from out of state who then can now afford to come in who aren't necessarily that capital A affordable and and what about you
30:00–40:00
Dan Tenenbaum
know younger people or sometimes older people that are living at home yeah with parents so those people will leave too so there's an elas there's an elasticity of that market rate group that you know needs to be considered where it's not an a vacuum it's so you you don't just benefit you know doesn't just benefit the people at the lower rung just because you create more units you need to be more thoughtful and uh very specific about creating affordable housing in addition to market rate it's not you can't solve a problem just with doing one one of those two got it it
Taylor Avakian
has there has to be a program in place that that's very interesting I don't think a lot of people talk about that how just because there'll be because people say like Argentina how went from that's more on the rank control side but they went from highly rent controlled to not rank controlled at all and their rents came down 30% right like that's something that a lot of apartment owners and people who stand up for apartments will point to and say Hey look this is why some of these programs and policies that we have in place on the service may look great but actually in reality the psychology of humans and the way that the economic macroeconomic factors work like it's not actually getting us to our goal um which is so so very
Dan Tenenbaum
interesting to me although although I will say that there I think the story is more complicated than at first blush with Argentina oh really yeah I think part of what happened was that there were people there were owners because because the rent control laws were so egregious uhhuh they were so restrictive they chose not to rent them out oh so like New York right and so that was part of the reason why the rents went down they they were off the market they weren't actually leasing even though they were vacant and so yes so that so that's not necessarily the case here we have a pretty low vacancies which is crazy
Taylor Avakian
how prop 33 even had legs to begin with because that would have done exactly that which is happened in New York City in 2009 when they passed that bill now I don't know the exact number of of units that are off the market but when you have vacancy control and you have a TI pay 700 bucks and then you can raise to $730 like it just makes more sense to close the doors and not rent it out right it's only going to exacerbate
Dan Tenenbaum
the issue that's right that that would be as you know and and Frankl you know you I mentioned I'm from Montreal they have a a major cling Supply issue even worse there really because they have that um you know super restrictive rent control laws and so yeah so they have uh you know they have a major affordability problem even though the wages the cost of living is lower uh wages are lower too and and so yeah they it's very difficult to get an apartment there as a result and um so yeah people are uh yeah or they don't you know their their buildings are aren't taken care of very well and they're degraded can we we
Taylor Avakian
talk about Ula oh yes tell me tell me about first tell the people who don't know what is Ula and then give me
Dan Tenenbaum
your thoughts on it well was it was it two years ago that measure Ula passed it was it was the The Mansion tax in the city of La and so I think a lot of people thought oh yeah all those wealthy people they when they sell their mansion they're going to make money anyway so let them pay a tax right most of the people who are voting aren't don't have manages and we never never think that they're ever going to vote so why not vote for that and and and be able to help fund programs for the homeless which is where the money or preventing homeless where the money's going so again well intended I think like a lot of these things um by people who you would enjoy talking to I know some of them nice people um so it's not a question of bad intention you know
Dan Tenenbaum
the problem with measure Ula is obviously is in our industry in the apartment industry it's it's it's a huge huge uh disincentive and we knew it when it passed but now um my friend M Smith just did an analysis and uh it's the the if you compare even apartment buildings that over 5 million which is what's the first um threshold for the tax to kick in versus apartments that were below that threshold uh even within the same industry the uh reduction in number of sales since that past for the threshold over 5 million for those sales plummeted compared to the others that kind of were more in line with historical Trends and um so yes it's it's a disaster and
Dan Tenenbaum
it's a disaster because um it doesn't take into consideration the profits number one it's just based on the selling price so if you're a developer just to use Easy numbers you you know you you build something for 9 million that you're going to sell for 10 million after you complete it well the the the the tax is based just based on a 10 million cost it doesn't look at the million dollar and that makes that developer say when they're choosing to whether they're going to be building in the city of La or or elsewhere say you know it doesn't pencil out anymore I can't I don't I don't have enough there's not enough of AE profit to to to justify the risk of me signing a personal guarantee with me and my family I mean people underestimate what what what what uh developers need to put up and the
Dan Tenenbaum
the risk is not just themselves and it's not just this Corporation no the the lenders can go after you personally can go after your personal house that you know and and we we we probably all know some people where that is actually happened it's not just stories it's this actually happens and um so yeah so so there so so what happens is that as we don't get the development we need and where we were just talking about how we need development mhm as Ula is a disaster because it you know while it does raised some funds and frankly you know we've had some tenants that have benefit and then we're able to keep because of the funds that help them get arm all in favor of the uses of the funds but if we're not if it's having a detrimental effect on on the development of
Dan Tenenbaum
of housing in general that's just terrible longterm and it doesn't benefit the people when when when rents keep going back up higher and and even more people fall into homelessness because of
Taylor Avakian
is there an alternative like what's the solution for clearly we need or the the city wants to raise more funds to help pay for some of these things and clearly project H key was seem to be an ex success and so if you can use the funds to go and do something similar to what you guys with hom key that seems like a logical place to use those funds but if it if it takes away from uh the available units for even marker rate people so that affordable people can move into some of these other older buildings like what is a solution for us to solve the issue
Dan Tenenbaum
with taxing people more yeah I mean you know if the the idea of taxing if it it's you know we've been paying transfer taxes for instance since you and I were been in the business right it's like half reasonable right so but if you're going to do a significant transfer tax you need to it needs to be based somehow especially when it comes to multi family business where where it's not just the business it's it it it's it's hope it's creating homes and then and that's the number one issue that you know people in California have about living in the state is the cost of housing so if you're putting policy together you need to be super sensitive to it and and and if you're going to tax it tax it based on on some reasonable amount number one and and reasonable you know profits
Dan Tenenbaum
um so yeah and and and and just in taxes in general people you know need to see the the benefits of it so if it's if it's working and it's actually preventing homelessness and and and and the landlords are receiving rents that they wouldn't otherwise that could be a win-win so you know to me it in and of itself if it's crafted properly something similar uh could work and and and both yes is a higher tax but it's also benefiting the the the uh housing provider Community I think that could be a reasonable there there's probably
Taylor Avakian
a reasonable way to do that how do you feel about the city council and some of the decisions that they've been seeming to make in terms of making it either more restrictive in terms of rent increases which I know the county came out and Chang the amount that you can raise the rent uh based two-thirds on the CPI for rent control units which was built before 1995 and then recently I've heard that the city is making a push to convert all buildings to Electric appliances and an electric and then also they're considering reducing some of the rent increases and changing up the formula to calculate how much you can increase the rents and things like that which on the surface I you know obviously we want to make housing more affordable but H how do you feel
Taylor Avakian
about the city council and the decisions that they're making or some of these
Dan Tenenbaum
bills they're trying to get passed well I mentioned I've been involved with the California apartment is for many years so I've been reviewing and we've been taking positions on City of La uh propos changes to all kinds of issues that affect apartment owners and the way I would summarize you know maybe 20 years of my first 20 20 years is that they would pass legislation that would make the landlord Community unhappy and the Tenant Community unhappy and we kind of moved on and no one was really happy and as a politician you probably can pat yourself on the back because that's probably the best you going to get especially in a market where it it you know a lot of the electorate are are tenants
40:00–50:00
Dan Tenenbaum
so to me was you know things have consistently moved more Pro tenant but it was kind of balanced and reasonable ever since covid it has not been it has been bashing landlords that has made uh you know uh L the housing providers no longer a partner with the city but as an antagonist uh almost like the the you know a a they have an antagonist view of of apartment owners whether they do or not that's the result of the this legislation and and so it's been really really tough and it's no longer balanced and unfortunately and when I and I do have a chance to meet with city council members and I had the opportunity to meet with the nithia ramen who's the council member who's the head of the housing committee currently of the city
Dan Tenenbaum
council and and I explained to her and and is you know we are not Scandinavia we are not a place where they have significant amount of government funds to handle a lot of these problems the the a lot of the problems for affordability and homelessness will come as a partnership with a private Market the private Market is now alienated is alienated now this measure Ula you know is not as noticeable now because development is down but it it's down nationwide but when things pick up it's still going to be down here unless we get rid of that or change change that measure and so the balance is no longer there just at this point after what apartment owners have gone through with covid with multiple years of no
Dan Tenenbaum
rent increases where people forget and and and I don't even think it's been I've read it anywhere when the city of La extended the rent evict the eviction Mor atum one more year after the state there was zero or almost zero compensation for apartment owners it was there wasn't zero but it was very very limited and there were zero State funds so whereas maybe during the initial years of the eviction moratorium we were getting 33 cents on the dollar we got zero on the dollar for the final year so that was just to me that was just you know very made it things very difficult for for owners now if that is the
Dan Tenenbaum
case that okay we we recognize that you know you as apartment owners find the city council you've really had a tough time the timing of now limiting the rent increases is not a good timing at this point to relook at an RSO that has been in place this is October 1st 1978 that was designed to have in the RSO it says reasonable return for apartment owners well we have not had reasonable returns for multiple years never mind all the increase in expenses that including 100 to 200% increases in Insurance some city-led increases in
Taylor Avakian
in refuges waste water power Li it everything has gone up significantly more than you can raise right so
Dan Tenenbaum
there's no Reon there has not been a reasonable return for many years so so to start thinking about it now just I just think it's a really bad timing the good news is I don't think they're in a rush to to get that P just yet and that we're making we're going to make it clear that the the timing is not bad the actual uh losing the floor from 3% to 2% yeah I don't think that's that that that would be appropriate at all one of the bad one of the difficulties I should say is that if we're going to if if they really the intent was to have a reasonable return remember 1978 when this was first um pass the rank control it was Sky High inflation so it's not like it was in this different much higher than
Dan Tenenbaum
than today so it's not like it was established and the words reasonable return were were were in a vacuum that's oh it's not the same as this no it's exactly if not worse than it is today uh they thought even that time they needed to have a reasonable return because you need to be able to maintain the housing stock the quality of the housing stock in our city and so that's the re and and that reason still pertains and so to to decrease it to 2% when actual and but based on the CPI um where the CPI does not necessarily and often doesn't mimic the cost for apartment ERS unfortunately there's not this other index that's easily accessible that we may be able to suggest as an alternative but really the 3% kind of says okay well even if inflation goes below 3% we're
Dan Tenenbaum
gonna still allow a 3% floor it's kind of recognizing okay you know maybe the CPA CPI is not the best gauge let's you know make sure that at least they get 3% every year so I think that's you know that's that that's not a good thing the bank with their their 5% increase as as as a Max but banking the difference the CPI so you'll be able to let's say um if it was 7% this inflation in one year but you can only do 5% that 2% can carry over that one you know I have a
Taylor Avakian
more open mind in uh I know in Northern California there's a couple of cities that do the banking Mountain View being one of them which is obviously a near Google and apple and stuff like that so cver city has their own um I think rent control policies they have their own Ula stuff which seems to be working out pretty well I saw a detailed breakdown of that my my concern and I get this question a lot from not only owners but people who friends family they're like are you sure you want to be dealing and selling properties in in Los Angeles because it seems like every year it just gets harder and harder and tougher to be a landlord and disincentivizing investment in the city like these new lies these new rules I get a new email every week from agler CIAA saying
Taylor Avakian
this new ordinance is you know like you it just keeps getting worse and worse so like do you see it the city as an owner and someone who deals with that do you see it getting to a point where it just becomes unreasonable to want to invest or own property in this city or is does it have to flip does something have to flip and we have to go in the other direction or does it you have toit Rock Bottom before people realize you
Dan Tenenbaum
can't keep doing this I think it's the last one really unfortunately so I the good I mean I do think that that at the end of the day the incentives when if things get as as bad I think things will have will get worse before they get better and the question is whether uh it will convince the politicians to to rethink what they have done now the some you know we are seeing San Francisco you know High you know elect a more Centrist mayor and so we're even in California we're starting to see people who are getting tired about some of the these business as usual types of things where um you know if you're if you don't consider the the backbone of the business Community or the Housing Community if you just forget them um and eventually things get bad enough which is what happened in San Francisco
Dan Tenenbaum
where people push back and um and it may take that I'm not sure um I'm hoping it won't and that's why I keep getting out there and and talking to the officials who will meet with us and you know at least give them perspective that you know just so you know we may be looking back at 2024 as the low rent years and you're so trying to focus on getting affordable housing this this it may be getting much worse than this so just so you know it's you know you need to have this go back to the balance go back to to to this you know to the situation where where you're you're helping fin but at the same time you're making sure that it's not detrimental to the housing Supply and to the housing the partners that you need to be with the housing providers
Dan Tenenbaum
to enact a lot of these affordable housing and and uh housing general policies you're an owner do you want to invest more in La I am more hesitant now than I ever have to be honest it's it's it's really yeah it's hard and I love the city yeah so it's hard for me it's just so frustrating when
Taylor Avakian
people who do good work and are some of example as yourself of like you've done your civil Duty and like have tried to help a lot of these issues and even you are like come on man like this you don't even want to invest in the city that um obviously you've come to and and is trying to to make great and it's it's very sad and I really hope that things can change a little bit I want to talk about something and I'm not a conspiracy theorist right but I've heard this go around and it's interesting and it's just like H so I don't know when this started but the city of La makes all landlords register their rents right so you have to say what your rents are for the city not me but people have said
Taylor Avakian
that one of the reasons that they want to do that is because eventually they want to get to a point where the city owns a signif portion of the apartment buildings and units or it's government
50:00–1:00:00
Taylor Avakian
controlled basically apartment buildings because it doesn't make sense for uh private individuals to to own the assets so they can get the prices down to a place where they purchase it from owners or investors are taking over whatever it is and then it becomes government subsidized government controlled housing because they know what all the rents are for people right they can control they know how much people they don't know the expenses necessarily but they know they they can underwrite every building basically per se right do you think that there's any ulterior motives within the city for wanting to eventually get to a place where they own more and more and more of these units no no I think that's a good spirit okay all right all right honestly that's yeah why do you think they make you register
Dan Tenenbaum
the rents well I think um like a lot of these things they looked at other cities and this oh they're they're registering the rents I'm sure that we can avoid excessive rent increases of Bad Bad actors bad landlords who increase it significantly the whole thing to me is a little I mean how are they how are they using it we it's it's not clear if if the if there is they are not uh as far as I know and maybe they are but I I've never heard anyone getting Flags saying hey you know in your 2022 rent registry you had this rent and we see the same in there in 2023 and their rent is 10% higher so can you please justify or explain what happened there I don't think that's happening that's the way
Dan Tenenbaum
if you're going to do the program that's the way it should work I don't think you know it's they don't have the funding the housing department play doesn't have the funding things the the way things work is the politicians get the idea and the housing department tries to do what they can to the minimum they can just to to comply but if they don't get the funding to to actually monitor it I don't think anyone is I mean what we what I do know is if there is a a complaint of an excessive rent increase they will send out a letter to investigate it they don't rely at all on they don't think they go back uh uh to the rent reg registry for it they still require the landlord just to respond you know that's the way it should be uh and I'm not sure who who is protecting
Dan Tenenbaum
and it's created again an example of a you created a bureaucracy re for for apartment ERS make it more difficult uh you know we have to yeah we have in January we have to fill in all these you know the whole thing to pay for it too yeah and and um so yeah yeah that's an excessive to me an examp if if they're going to do it let them do it but don't do it and and and create this bureaucracy and not use it in a way that actually protects the people that they're supposed to protect let it let them let them actually use the data yeah exactly and then at least I feel like okay you know it's worthwhile that now I feel like it's not being it's really just kind of sitting there everyone feels good cuz they can say tell
Dan Tenenbaum
other cities look we have a red registry they can tell the tenant groups we have a red registry and then you know so what it's interesting city of Santa
Taylor Avakian
Monica actually publishes theirs publicly right so they they publish it online I'm curious to know if the city published it online if that would uh be a good thing or a bad thing which do you know much about Santa Monica and obviously Santa Monica is not in the the brightest of light in terms of the public uh perception of how they're doing with housing and homelessness and things like that but it's interesting to know if there was a a public opening up of you know the details if that would change behaviors Andor anything
Dan Tenenbaum
like that I'm not sure I mean I think it's going to be it probably you know opens up a whole you know another ball of wax where if if the housing department was fully staffed to to that every I mean because it it can be someone could independently you especially if they can make the data downloadable can can put it through Ai and say okay all these people look like they got same just like I described before same same name on the lease or same on the rent roll you know 20% increase in rents it's supposed to be rent control how did that happen and and and so yeah they can that you know so someone could actually do that themselves but if there's no one they want the staff to investigate it you know I don't know to me to me I'm
Dan Tenenbaum
sure the the people at the housing department wouldn't want that they're going to get way many too much work yeah they just they're they're not staffed enough to do the work that they're supposed to do now crazy so they're overwhelmed significantly oh yeah oh yeah there's no question about it and that's just the N but it's the nature of the the the politics it's like we're going to enact it we're going to have the press conference we're going to show what we're doing for tenants and then the housing department will figure it out uh I think that's basically how it works and then if they don't have but there's you know funding issues we have more funding issues you know this this
Taylor Avakian
year and the coming years they one AI programmer to be go in there and be like hey here give me the data here you guys go here's this automated system that you know like that's they have all the data it's so easy now with the way that we're headed with the manipulation you don't have to be a genius to be able to build these kind of systems it's like wow we can be so much more efficient um well
Dan Tenenbaum
I have you know and my thought on that by the way is that yes with new technology we should be able to do also other things I mean theoretically if you if you think about what the rent control law is it's a blunt instrument that doesn't look at income as a factor but benefits everybody now if you ask even tenant Advocates you know you know they're interested in protecting lowincome tenants they're not interested in wealthier protecting but yet it protects every everybody it's a blunt instrument in the old days there was no way to be able to use any other system because it was too onerous now though and frankly with covid we we've had a huge amount of income verifications right people didn't get p uh didn't get the Run subsidy if they weren't a certain income so we have a whole new system that has been set
Dan Tenenbaum
up if you integrate AI into the whole thing just like we now have with application processing and things like that I mean we There's an opportunity to have a uh some form of uh help for the people who deserve the help um but but not others that could theoretically create a benefit to the apartment owners who are currently subsidizing people who really are not low income I mean I've heard
Taylor Avakian
the stories of the the doctors the lawyers or the high net worth individuals whatever who live in a right control property and and you know Beverly Hills for example but somewhere in the city of West Hollywood other the areas High net worth high high net worth areas neighborhoods where they're paying you know 500 bucks for three better unit and it's just like they don't need to have the rank control if you're trying to give them or give people yeah it's it's a blunt object instrument that I don't think they've thought through how they could actually Implement some of the Strategic strategies for helping the people they want to help versus really not giving it the thought or giving a blanket program that
Dan Tenenbaum
affects everyone right and up till now that that's really it did make the most sense if you're gonna try to do that but now we have new tools so we need to look
Taylor Avakian
at that you know yeah what um I don't know if you thought about this or or anything but I know there because the Olympics are coming and 2028 there's been a big push to revitalize quote unquote Los Angeles um have they said anything to you about what they're planning on doing there or has that impacted you at all in terms of ownerships or directions
Dan Tenenbaum
or anything like that no I don't know too much I mean you you can imagine that they're going to be focusing on visible homelessness in and around especially the locations but other than that um not much I don't yeah not nothing uh
Taylor Avakian
that I'm aware of yeah so we talked about Ula a little bit we talked about the difficulties developing um you shared a very surprising stat with me that I found very insightful that over 70% of the buildings in Los Angeles are five units and below is
Dan Tenenbaum
is that true yeah I think it was like uh 73% are like five units and small and then like 80 something percent are 10 units and smaller like it's we're we're the second largest city in the United States and yet we're if you look at the apartment uh layout is it it it it's dominated by these smaller apartment building is is not we have it's so different from Manhattan it's so different from most major cities around the world and so yeah so that's uh it is I think surprising for was surprising for me when I first heard about it and then yeah and just to see the data it's uh yeah even just the number of duplexes is is significant and they're seeming
Taylor Avakian
to uh change a lot of the rules in terms of what you can build on these sites where they're protecting a lot of these residential areas um which isn't necessarily inherently bad however I think it restricts a ton of potential areas or potential properties that could have much more density much more housing much more opportunity to include and and get private investors or the current investors to want to develop right because it's there's more land value there there's a higher opportunity cost for them to to want to take on the risk of doing this development have you looked at the the new chip program at all have you looked at where the zoning and the changes or do you have thoughts on the zoning
1:00:00–1:10:00
Dan Tenenbaum
in La yeah I mean I have thoughts and in fact it so the city's reaction reacting to this California Housing element requirement which every five years each city has to show how they're going to up Zone to allow for a certain number of units uh in fact I was not in this one but I think you know 10 years ago I was actually in on the city side of the housing element uh part of uh this cross you know representing apartment owners but you know a bunch of different interest groups and on how we're going to do it at the time so I'm very familiar with the with the process so um but up zoning doesn't necessarily result in actual units being built and so the question will remain you know even though you know it will there be enough
Dan Tenenbaum
incentives to up Zone and and my my sense is since a lot of the focus on this you know recent City of La is is to like you said avoid the single family areas and focus more on Commercial corridors which I think you know as retail weakens and uh the ability in the state law has allowed for redevelopment of those and I think we that's those are the easiest in my mind you know busier streets um be able to build there they're typically accessible to to uh Transit of some kind and and they're already busy um but the second most interesting place is in the multif family areas the the R3 R4 zones uh in in our city and but but you're not see why why aren't we seeing a lot of development in those areas it's
Dan Tenenbaum
it's it's not because um the rents aren't high enough it's it's the it's not and it's and it's not just because of the cost of development it's the fact that we have to make the existing uh tenants whole in a way that I think goes Way Beyond um reasonableness again this this is you know no longer in the middle so the thing that really bothers me about the when you take down a rent stabilized apartment building I do believe that any you know that people have the right they're who are there that's not no fault of their own that that the owner decided to take it down that they should be made whole they should have upfront compensation as they have right now for um and and if you're you know if you're older or you have you know if you have um disability all of those things
Dan Tenenbaum
where you have a stepped up amount of uh of an amounts I you know I think that's that's uh proper compensation you know you can argue the dollar amounts but the philosophy of of paying someone for the inconvenience moving out I'm in favor of that I'm also in favor of of this idea that they um you have to make them whole meaning they should be able to provide or find an apartment build apartment in the you know within a certain radius where they Liv before if they want to uh to uh at the similar rate uh so that we protect tenants in that way um and and we can create you know there's not enough systems but you know we could probably create a system that allows them to have some form of a of a voucher to make up the difference between maybe what the they're paying in
Dan Tenenbaum
their existing building where they're being asked to leave and the new building and that you know that could can it should be part of the the cost that the developer pays I think that's reasonable um but then to ask those people the allow them to come back into your brand new building with you know maybe three times the rent for for a similar unit um that to me goes beyond um what's reasonable because we just need to make that person find a similar unit in the same area and give them up up front that's reasonable to me going beyond that it becomes you know it's it's just a win for the tenant and in it of itself is is is not just a fairness thing it's it's actually has a negative impact on the development and that's my big issue is that there
Dan Tenenbaum
are deals that are not being made there are small you know four unit buildings we remember how many we have there you a huge number of five unit and smaller buildings that could be taken down and have 20 plus units on there and they're not being done because it's been so restrictive or they have so many you know costs associated with it or the labor law again the the the the prevailing wage requirements we need to rethink th all of those things um so that we can you know you're not going to get as much push back to put a a 20in apartment building in an area that's already zone for apartments as compared to in a single family area where they're not used to having apartments and and and then put a a 20 unit apartment so it's much easier even politically for for
Dan Tenenbaum
the city council members to approve it but they're not being built like I talked about before the Market's super efficient you create the right incentives you create the right rules you know we should be taking down a large number of these smaller buildings making those tenants whole and and figuring out a system them how to do that so that we can increase uh the number of units that we have in our city in the multif family area and I'm sure there's a ton of people who are developers who are peers who would who would be happy to to to build to build take the risk and to build and and
Taylor Avakian
do that what um I'm curious to know from you've been doing this for 20 plus years um what advice or if if you were starting over from scratch right you had to come do the American dream um what what would you do and would La be the place to do it or where would you
Dan Tenenbaum
look for opportunities I think right now I mean think things are Dynamic so things can change and opportunities can change um you know if you found in the right submarket or you know some some place where you're just getting a great deal you should still buy an LA uh just know you know what you're getting into um but as a general rule I think you know there are in more innov ative programs that have occurred in the affordable area where they're you know things are getting FASTT tracked they're TR you know trying to lower some of the cost of developing or you know or you know there to be able to or to be able to buy you know if there's programs especially that get developed where you can buy and then you you can convert them to Affordable units but still
Dan Tenenbaum
make a nice return to me that that would be uh you know there may be some opportunities there I mean there are people who are who who are taking advantage of the ed1 program um and I know people who are building on the West Side using ed1 so there's something interesting about it people you know it's not just in in in in South La or or east LA or North Valley that they're developing these units they're they're they're going build affordable units even where it historically has been difficult to do if you know if they're able to do that you know they need to that there could be some good opportunities there so I think you know it's worth looking into all of the you know you know those kinds of programs that uh so that may be at least today maybe the more interesting kinds
Dan Tenenbaum
of deals or oportunities I know Section
Taylor Avakian
8 has been um a little bit of a with the ed1 because I don't know if you've heard this but I recently heard that the city is changing up Section 8 um in terms of either the rent amounts that they're giving vouchers to or the the the rent um fair market rent values right I know a lot of ev1 Builders were planning and underwriting where their units were going to have a certain amount of rent from SE and 8 like that was what they were begging on which is the the government subsidize housing do you think that section 8 and that program and and things like that are going to continue to fuel um that expansion or do you think that there's potentially some risks associated with you know banking on Section 8 and banging on these these government subsidized
Dan Tenenbaum
rent programs well anyone first of all anyone who had section A tenants during Co were very grateful to have it because when things go bad and to have the government backing you know that was good um I will also say that the the fmr as the fair market rents as calculated um by the Housing Authority for various areas are are you know quite High I mean so there you know people who are taking advantage of Section 8 in in in some areas are getting some very solid rents and and we need to make that and you know there's still a bureaucracy there are still additional rules but if you make uh the you know if you have a a a a a payment a monthly payment that you can count on um yes you may be doing some repairs that you might not
Dan Tenenbaum
have done otherwise yes you may be some bureaucratic things but you're getting a strong rent and probably low turn over and so you're getting enough benefit so I believe that what we they have done thus far which has been quite aggressive fmrs has been a great thing um and despite that we you didn't see a huge any significant increase in fact there's small decreases of of landlord participation in the section a program in the city so despite that and despite you know these um the a new law I think now three or four years old that made illegal to discriminate based on uh on source of income which would protect Section 8 voucher holders we still saw a decrease in landlord participation in the section 8 program so the idea that they
1:10:00–1:20:00
Dan Tenenbaum
would lower fmr potentially to me is a little scary um and that will not be good for uh at least for for their the Section 8 program where they you know you try that are used by the private Market um because yeah that that that not normally will the developers who are maybe taking advantage of ed1 like you mentioned but you know there's there's another issue which is we you know you we landlords will not participate in section A we already people are on the wait list for for for over four years already and so to get it once you know so get a voucher to get a voucher once you have a voucher many of them are not able to use them interesting so yeah only half the people who get a voucher I think there's about half were able to actually find a
Dan Tenenbaum
place in I guess in the area that they want um at the rent that they want despite the fact that you know they're only paying a third of their uh 30% of their income towards rent so that's interesting
Taylor Avakian
so there's there's plenty of tenants who have the voucher that can go and live to fill up these Section 8 units it's just because I've heard that it's actually slowed down in terms of it's harder to fill these units with section A tenth like it's taking longer and longer or the rents you got to reduce the rents to be able to you're not getting the
Dan Tenenbaum
fmr kind of rents oh yeah I I um I'm not sure I'm I don't I not a Section 8 provider in fact while I was commissioner I was not allowed to got
Taylor Avakian
it even if I wanted to got it okay very interesting well I want to end on more of a positive note and talk about some of the work that you're doing with this uh boy Heights synagogue and tell me a little bit about that and what we should be looking out for and that sounds
Dan Tenenbaum
very promising and exciting yeah well I'm I I'm I like Civic being involved in our community and in different ways so certainly uh the Housing Authority was was a great way for me to get back using my housing skills but uh for a very long time I've been involved with the breed Street Sho project which is actually was the largest synagogue West of Chicago between World War I and World War II wow it was a real center for the Jewish community at a time when it was a very boil heads was very diverse um many people who were including the Jewish Community who were were they were redlined out of other communities uh so there was Japanese there was Armenian there were African-American so there was a multiple communities that were there by default M but it was a a real
Dan Tenenbaum
nice Melting Pot um where um you had Latinos and Jews and and uh Japanese especially having a lot of daily interaction uh together and um now it's primarily workingclass Latino area after they crossed the area with uh with freeways and and the red lining went away that allowed the Jewish Community certainly to move elsewhere um and so um this is an a project that kind of uses my real estate skills um to the the the development itself is taking the synagogue there's not there's not much of a Jewish Community left there so it's really to benefit the local boil Heights uh Mexican Latino Community because it's not just Latino it's Prim arily Mexican Latino um Bo height has always been the imig uh Gateway of immigration into
Dan Tenenbaum
the city of La it still is in many ways um and so we like like all immigrants they need services and people are working glass need services so the whole basement which is a lightf area of this domed beautiful structure it's actually the same architect as the Wilshire Boulevard Temple over in Korea Town area um uh the whole basement is going to be used to create uh offices nonprofit offices to serve the local community with social services and Immigration Services English is a second language all these kinds of things the sanctuary area will be for performance space or meeting space so you might have mariachi wow evening and one one night and the next morning having a a bar mitzvah um but yeah so it's going to be as multi-use uh it's also it'll be large enough to have a large community
Dan Tenenbaum
meeting so when there there's a big issue for boil Heights or for that part of the city they can they can have a large venue to to have the community come out and then a very interesting part of it that celebrates Royal Heights as this Gateway of immigration is to have uh a some form of exhibit space or Museum space that tells the story of all those different groups that I mentioned uh you know yes the Mexican and the Jewish but also the the Japanese Armenian african-amer all of the different experiences is that uh of all these immigrants that have made La so rich telling their story you know in La we don't tell a lot of historical stories but this will be a great place to be able to do it when you have a sense of place and a place where we really
Dan Tenenbaum
have uh know a lot of history uh and so because we we we were fortunate enough to get $15 million from the state during covid to redevelop it after it has been basically fenced off for decades MH it was one of the few um maybe the only brick building that was not structurally reinforced that was required back in the 1980s jeez you know Dorothy May and all of those yeah so um lot of work not done and so the thing's been red tagged ever since the the Silmar earthquake and fenced off and now uh we we just finished uh using you know using this $5 million we've finished the we're finishing the first part which is this to put the structur will reinforce the building and that's all being done but then the fun fun part starts and so
Dan Tenenbaum
we will amazing now make this building alive again and Alive really for the benefit of the boil Heights community and to be able to use some of my you know real estate skills to help is is is a real honor and you know I just can't wait for for it to be done and and being used again after Decades of uh being underused I'm excited to come see
Taylor Avakian
it when it's finished Dan thank you very much for coming coming on I appreciate everything you shared and uh I hope people got a little bit of insights into what's going on and understanding the landscape of of Los Angeles and people are working hard to solve these issues and we need people like you continuing to do great work and helping us
Dan Tenenbaum
get there so I appreciate it yeah no we and anyone else who's listening who wants to get involved please get involved we need more apartment owners to be involved and be part of the solution absolutely Dan thank you thank you thank you for
Taylor Avakian
listening to this episode if you enjoyed the podcast it would mean the world to me if you could rate US five stars on YouTube Spotify and apple podcast it really helps us get our name out there and helps us get fantastic people like our guests to share their insights and knowledge with you again my name is Taylor vacan I specialize in the sale of apartment buildings in Los Angeles in Southern California and I look forward to sharing more of these conversations with you see you in the next
Dan Tenenbaum
one [Music] the