Thousands of Angelenos will have fewer affordable housing options as ‘covenants’ will expire

Los Angeles is facing a crisis within a crisis when it comes to affordable housing. On top of the county’s well-documented shortage of cheap apartments, thousands of existing affordable units are likely to go market-rate in the next five to 10 years.

That’s because of expiring regulatory rent covenants. These covenants restrict rents on some housing projects, typically for about 30 to 50 years, in exchange for government loans or other types of public assistance for the developers.

According to a new report from the nonpartisan nonprofit California Housing Partnership, more than 10,000 homes in LA County are likely to lose their affordability restrictions in the next decade. That represents about one-third of the county’s entire affordable housing stock. Within LA city limits, nearly 3,700 units are scheduled to lose affordability restrictions between this year and the end of 2023, according to the city’s Housing and Community Investment Department.

“That’s a lot,” said City Councilmember Gil Cedillo. “That wipes out whatever gains we make.”

Last month Cedillo proposed a citywide rent freeze on units with expired or soon-to-expire covenants until comparable homes can be provided, based on health and safety concerns about displacing people during the pandemic. City housing staff and lawyers are expected to report back to the City Council with recommendations. Cedillo’s motion was essentially an update to one he introduced in 2019, asking for recommendations on extending expiring covenants in the city or assisting tenants with relocating to other affordable units. A report back on options is still pending.

Meanwhile, between 2019 and the end of 2020, covenants on about 5,000 units in the city expired, according to city records.