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Corruption in LA’s Housing Dept Out of Control … and Nowhere for the Buck to Stop

RETHINKING LA - Last week City Watch LA took LA’s Housing Department (LAHD) to task for its controversial Rent Escrow Account Program (REAP) charging that it preyed on small landlords, failed to deliver the oversight it promised, left tenants in limbo and provided a safe-haven for squatters.

Over the weekend, the plot thickened as the LA Times covered a Housing Department employee who exploited her relationship with immigrant landlords, collecting payoffs from them and steering them to her contractor husband. The employee was convicted of felony bribery charges while her husband, also charged in the case, left for South Korea where he remains out of reach of police.

Most damning for the City and the Housing Department is the clear lack of oversight and accountability that has been revealed in incident after incident, going back ten years to when Laura Chick conducted an audit and declared REAP broken.

Last year’s arrest and conviction of an LAHD employee failed to motivate LAHD management to call attention to the case, leaving high-level officials in the city attorney's office, the Personnel Department and the Department of Building and Safety in the dark until informed by the LA Times.

The Assistant General Manager responsible for the REAP program, Robert Aldape, didn’t investigate further to see if there were other incidents, saying employee communications with customers aren't closely monitored.

Speaking of the convicted employee, Aldape said "We simply don't know what interactions she had, people come to the public counter all the time, so there would be no way to track it."

Insiders at the LAHD contend that Aldape has personal motivation to take a laissez-faire attitude, pointing to his prior role as the “executive director” of the LA Housing Law Project, a “tenant advocacy non-profit” which he operated right out of his law office, a private firm that made its money by suing small landlords.

This two-hat journey to the #2 position at the LAHD has allowed Aldape to position himself as a “non-profit director” when dealing with housing issues but as a “law firm principal” when making campaign contributions.

Over the last decade, a cottage industry has blossomed in support of REAP, made up of nonprofit corporations that provide “tenant outreach services” under contract with the LAHD. Critics charge that the nonprofits, once armed with critical information from the LAHD, turn their contracts into lawsuit generation machines against the small landlords who lack the sophistication to fight back.

Faced with a lawsuit, many of the small landlords simply roll over, negotiate a monetary settlement, and look for an exit strategy.

A review of the nearly 1700 properties under the REAP control reveals a disproportionate number of 2 to 4 unit buildings that have been taken from the control of the property owner, serving as anecdotal evidence in support of the landlords’ charges.

The City of LA has heard the allegations of those who claim to suffer at the hands of the LAHD, prompting Councilmember Parks to call on the LAHD and the City Attorney’s Office to investigate the complaints and come up with a report.

This stirred another round of allegations, this time from within the department, from staffers who contend that “The foxes have taken over the henhouse and are partying up. They are calling the tune, and the unwitting public is footing the bill.”

Aldape appeared before the Housing, Community, and Economic Development Committee and reported that his investigation had found “nothing to substantiate the allegations.”

This self-evaluating system of oversight is somehow sufficient for the City Council but when an employee was convicted of felony bribery, Aldape claimed an inability to monitor the actions and communications of employees.

Charges that the LAHD has been run as a personal fiefdom of upper management go back to the days of Mercedes Marquez who left for Washington DC in 2009 to take a position as Assistant Secretary of the Housing and Urban Development Department.

Critics claim that Marquez left in her wake a highly polarized and demoralized department that continues to take its direction from political patrons, leaving potential whistleblowers in fear of the self-investigating regime, and communities vulnerable to the REAP administration that leaves tenants, landlords, and neighbors equally abused.

REAP is the city administered program that evaluates rental properties when they are cited for code violations and if the property is declared “unsafe” or “untenantable” by the LAHD, the city steps in and collects the rent with a discount of up to 50%, depending on whether the conditions are “nuisance” or “hazardous.”

Landlords, tenants and neighbors complain that the good intentions have failed to materialize in good performance, resulting instead in foreclosed properties, blighted buildings, and neighborhoods terrorized by squatters.

Demonstrating the controversial nature of LA’s housing program, the Mayor’s Deputy Mayor of Housing & Economic Development Policy is now referred to as the Deputy Mayor for Economic and Business Policy.

LA’s Housing Department is in such dire straits that even the Mayor’s office knows it’s time to step away from the carnage.

(Stephen Box is a grassroots advocate and writes for CityWatch. He can be reached at:    This email address is being protected from spambots. You need JavaScript enabled to view it. .) –cw

Tags: REAP, Rent Escrow Program, City, Los Angeles, Housing Department, Los Angeles Housing Department, Robert Aldape, City Attorney, Mayor Villaraigosa, LAHD, Councilman Parks





CityWatch
Vol 9 Issue 83
Pub: Oct 18, 2011

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