Thu, Jun

Corps and Landlords Try to Destroy Rent Control, Tenants Unite


TENANTS RIGHTS - The promising new tool in the fight to preserve affordable housing: a coalition of tenant unions. 

On a Tuesday afternoon in Koreatown’s Seoul International Park, Rebeca Sanchez buys her daughter a Sonic the Hedgehog popsicle from an ice cream vendor and smiles as her child wastes little time coloring her face neon blue.

Sanchez and 15 other tenants are suing their landlord, K3 Holdings, which they say is targeting immigrant tenants as it attempts to push them out of rent-stabilized apartments. The mother of three says that her Koreatown building’s manager regularly threatened to have her deported as part of the displacement campaign. Today, Sanchez is a member of the fast-growing K3 Tenant Council, a coalition of tenant unions formed in 17 different K3 buildings. Thanks to the council, Sanchez receives support not just from her neighbors but from K3 tenants across the city; it helps with the fear of displacement and anxiety that Sanchez says hospitalized her for three nights in December of 2020.

“Now I know tenants have their own rights,” she says. “I’m not scared of their lies.”

The K3 Tenant Council says the company is waging an illegal harassment campaign to drive rent-controlled tenants from their apartments, hoping to replace them with market-rate tenants paying two or three times what current tenants pay. The tenant council model, they believe, is a promising defense against corporations scooping up L.A.’s rent-controlled housing stock.

On April 9 the council marched to the Beverly Hills offices of K3 Holdings, accompanied by the 10-foot “vulture landlord” mascot often seen at Los Angeles Tenant Union (LATU) rallies.

Apartments in Los Angeles built before October 1, 1978, are covered by the city’s Rent Stabilization Ordinance (RSO), which limits rent increases in those buildings to the rate of inflation. The 1995 Costa-Hawkins Rental Housing Act, however, punctures RSO law by abolishing “vacancy control,” allowing landlords to charge market rate when a tenant moves out of their unit of their own volition.

Leah Simon-Weisberg, legal director at tenant rights group ACCE Institute, says Costa-Hawkins created a tenant-harassment industry in California by financially incentivizing landlords to drive rent-stabilized tenants from their apartments. Freelance “retenanting” is now a career in Los Angeles, and K3 employs several retenanters, according to the Tenant Council, including a woman who was negligently copied on an email to tenants by the company. They were shocked at her email address: [email protected], and the name attached to the email, “Natalia Relocation.”

Institutional investors often provide capital for building acquisitions in exchange for shares of the rental revenue — arguably making the real owners of Los Angeles apartment buildings a league of anonymous investors located around the world. Each of K3’s known 41 properties is mortgaged to lenders including Opus Bank (which became part of Pacific Premier Bank in 2020), Luther Burbank Savings and Cathay Bank, while real estate finance trust TPG is fueling K3’s expansion with a $96 million loan.

But tenant councils have become increasingly common in the United States as the American housing stock consolidates under corporate control. In San Francisco, the Veritas Tenants Association represents tenants in a 110-building portfolio managed by landlord Veritas Investments; in 2022, the VTA got the company to agree to cancel pandemic rent debt for tenants and organized the passage of a law in San Francisco recognizing tenant associations as unions with bargaining power. In New York City, at least five council model projects are underway, according to organizers with the Crown Heights Tenant Union.

The Council vs. the Corporation:  K3 tenant Eduardo Jarquin says he turned down a $50,000 cash-for-keys offer for the bedroom he shares with a roommate and his son in Koreatown. The K3 Tenant Council taught him to be “tough in the head,” he says.

“Sometimes with our tenant power it feels like we’re able to grab them by the balls,” says Jarquin through a translator. “Wow!”

He grins, marveling at the council’s power, which gives him the strength to win games of chicken against multinational opponents.

When K3 took over his property, he says tenants endured seven months of construction. In what was then a Spanish-speaking building, Jarquin’s neighbors accepted cash-for-keys offers in droves, and now, English-speaking, market rate tenants have largely replaced them, he says. In just October and November of 2020 alone, Los Angeles Housing and Community Investment Department (HCID) data shows that 29 tenants in Jarquin’s building accepted cash for keys offers that totaled more than $840,000.

Tenant associations in each of the 17 K3 buildings in which they have formed meet regularly, and they convene once a month for a councilwide meeting, where tenants share updates from their individual campaigns, swap advice and celebrate victories. They communicate regularly in a councilwide WhatsApp chat, travel to each other’s buildings to confront management over conflicts and conduct outreach at recently acquired properties.

Nathan and Michael Kadisha are K3’s 20-something owners and relatives of Neil Kadisha, one of the richest people in Los Angeles and the founder of Omninet Capital, which owns over 13,000 multifamily units across the United States. (In 2007, a judge ruled that Neil Kadisha had looted the trust funds of a young widow and her children to make the first acquisitions in his real estate empire and called Kadisha “no more than a common thief.”)

Michael Kadisha is also the CEO of Treedom, a community service app for high schoolers currently used by the Los Angeles Unified School District.

Through a statement issued to Capital & Main, K3 denied accusations of tenant harassment as “spurious, false, and hurtful attacks.” Both brothers declined interview requests.

K3 would not disclose to Capital & Main exactly how many properties it owns. According to data from the HCID accessed in the spring of 2021, K3 made 167 buyouts between October 2019 and April 2020, spending more than $4.3 million to remove tenants from their units. As the company bought properties in Koreatown, East Hollywood, Highland Park and Boyle Heights, it consolidated hundreds of rent-stabilized units once owned by different landlords under its sole control.

Leonardo Vilchis, co-director of Boyle Heights-based Union de Vecinos, one of the first tenant councils in Los Angeles, says cash-for-keys offers are decimating low income communities in Los Angeles by “a thousand cuts.”

“When people take the cash for keys, either they go to a worse place than where they’re living or they go very, very far away,” Vilchis says. Money once reserved for rent is spent on gas to commute back to the city center.

“They’re never going to be home because they’re working all day and then in traffic,” he says. “They’re just going to show up to their home to sleep.”

Gentrifiers and Gentrified…Unite!  Alma Angel, who cleans homes in the Los Angeles area, has lived in her building a block from the 110 freeway in Highland Park for 24 years.

In December of 2020, Angel finally got a new carpet. According to Angel, there was mold beneath the carpet and around her room, and when her son went to Children’s Hospital of Los Angeles for his ongoing respiratory problems, the pulmonologist reported that the dark splotch on his lungs was growing. Angel claims a social worker recommended mold testing, and specialists found spores in the air and the carpet.

City inspectors also found mold, Angel says, but still, K3 manager Matthew DeBoth produced no carpet replacement.

When Deboth arrived at her building in Highland Park that December expecting another meeting with Angel, he found her instead surrounded by tenants from other K3 buildings. The tenants were of various races, backgrounds and immigration statuses. They dragged the carpet to the trash as he watched.

“It took two years of steady pressure — they didn’t want to fix the carpet,” Angel said. But after that meeting with organized tenants, the carpet was replaced.

“It’s a war for us,” Alma reflects. “But it’s also a war for them.”

The tenants backing Alma that day also represented an alliance between market rate tenants, termed “gentrifiers” on the tenant council website, and long-term immigrant tenants like Angel, who pay the least and have the most to lose.

That alliance is critical to the success of the campaign, says tenant Sam Trinh. The K3 Tenant Council alleges that the company targets undocumented immigrants, threatening to call ICE and coercing them to sign documents written in English agreeing to buyouts or rent increases. A lawsuit against K3 filed by 16 tenants accuses the company of “targeting Latinx families” and violating the Fair Housing Act with “discriminatory housing practices” that include denying a dwelling because of race or national origin. Market rate tenants like Trinh can use their citizenship and English fluency to advocate for Spanish-speaking or undocumented tenants. But they can also wield their influence over the company as market rate renters, the occupants RSO-flipping landlords want to keep, not lose.

“Younger, gentrifying tenants have a responsibility in standing up for everyone else,” says Trinh.

K3 acquired Rebeca Sanchez’s 76-unit building on Western Avenue in 2019. At the time, it was filled with Spanish-speaking immigrants, but Sanchez says through a translator that an aggressive campaign of cash-for-keys offers, in conjunction with threats to call ICE on resisting tenants, has nearly cleared the building. Tenants were presented with documents in English that they could not understand, according to Sanchez, including buyout offers and rent and utility increases.

Today, under a quarter of the building’s units are rented by their pre-K3 occupants.

When Angel Escobar, a management operative, presented her with documents in English he said she had to sign, Sanchez relented. Suddenly, K3 raised her rent from $750 to $1,800 and began charging for utilities, she says, and the company also claimed she had agreed to a $20,000 cash-for-keys offer.

When the pandemic began, she stopped paying her rent. K3 building manager Jose “Pepe” Yepez began to call her twice a week, according to Sanchez. “Señora,” he allegedly asked her, “What are you doing? Beware of ICE.” She says he once called at 4 a.m. asking if she was “in the shower.”

When asked about allegations that K3 threatens tenants with deportation, a K3 spokesperson did not issue a denial. “At K3 we operate good buildings, servicing and supporting our tenants without regard to race, color or national origin,” the spokesperson wrote and did not elaborate further.

In 2019, Sanchez says K3 construction workers smashed a hole in her ceiling, and dirty water flooded the apartment; then, when she moved to a new unit with the help of the union, the same thing happened a second time, taking out her TV.

On March 2, the apartment of Marbarita Ortega flooded as well in the building at 1057 S Western Ave. Her basement apartment had flooded before K3 took over the building, Ortega says, but the old manager regularly cleaned the pipes; when K3 reduced services, her unit now floods every three or four months.

Ortega, another Spanish-speaking immigrant tenant in a deeply rent-stabilized unit, put out a cry for help in the tenant council’s group chat. Tenants from other buildings arrived with mops and supplies.

The same building manager who threatened Sanchez also threatened Ortega with deportation, she says, alleging that the manager told her, “I can have everyone without papers in this building deported.” She also accuses him of spying on her and sexually harassing her in the building.

Tenant Rachel Lee lives in Koreatown at K3’s building at 410 S. Manhattan Place, organizing tenants with her partner John Taveras. Lee is the daughter of Korean immigrants.

“Fighting K3 kind of feels like what I felt growing up,” she says. “Watching a whole bunch of people bully my parents, who are incredibly intelligent, just because of whatever handicaps come with being a first-generation immigrant. [I had] to stand their ground for them. So, for me, it doesn’t feel like anything I haven’t done already.”

Undermining Disinformation: It’s Saturday in Koreatown, and the K3 Tenant Council is eating pupusas in Seoul International Park. Annabella Mazariegos, a non-K3 tenant from Boyle Heights, took three buses that morning to deliver a message to K3 renters: Stay in your unit at all costs. Tenants from K3 give each other advice like “Repair and deduct” — if K3 won’t address a building issue, arrange the repair yourself and deduct it from your rent. Some tenants scribble notes.

Los Angeles Tenants Union organizer Rose Lenehan says the council model undermines a landlord’s most powerful tactic: divide and conquer disinformation campaigns that isolate tenants from each other.

“Their business model involves buying RSO [buildings] and harassing tenants out of their units, but in the council model we can connect tenants in different phases of that process,” says Lenehan.

Tenants who fought and won disputes over illegal construction can guide newer tenants through the procedure. Tenants who spent hours on the phone with city housing officials, identifying helpful advocates within city regulatory bodies like HCID, can pass their contact information on, saving time and effort. Tenants who stared down deportation threats can share those experiences. Each intervention can halt what tenant advocates call the “self-eviction” of accepting a cash-for-keys buyout.

When tenants tell their stories, they are proof that displacement is not inevitable: I am still here, the storyteller says, and so are you. And the K3 Council grows.


(Jack Ross and Bobbi Murray are writers for Capital and Main, where this story was first published.)

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