Monday, April 27, 2009

A glimpse of USC's rapidly evolving housing market

Over the last few decades, the University of Southern California has transitioned from a school  attended mostly by commuting locals into a residential campus that houses students from every corner of the earth. And while USC's housing management department, TrojanHousing, has responded to the growth with several development and renovation projects, the limited size of the campus and its enclosure in an urban setting hinder ideal growth.  

From JOUR309 final
Above: Tuscany Complex (Westar Housing)

As USC continues to grow over the next decade, the new wave of private student housing developers will play a crucial role in determining the nature of the evolution of campus life. And one of these newcomers, Costa Mesa-based Westar Associates, has raised the stakes early. 

Picking up the slack

Before Westar Housing arrived in the Figueroa Corridor, its properties were owned by another student housing developer, Conquest Student Housing, which used to sit atop all others as the most prominent independent housing provider in the area. So when Conquest decided to cash out and sell the entirety of its USC assets, Westar CEO Bob Best saw an interesting opportunity. 

Best and his company bought seven properties from Conquest, including Roma, Pisa, Chez Ronnee and The Bungalows  on Shrine Place, Corsica and Habitat Soo Zee on 32nd Street near Royal and Tuscany on South Figueroa.

The map above includes the areas of 32nd Street and Shrine Place where Westar's properties are located. The company's luxury complex, Tuscany (A), which includes a pool, workout facilities and ground floor retail is near the southeast corner of campus. The full list of addresses is below: 
Following his decision to purchase the properties, Best talked with USC officials and the two sides formed a working partnership. They decided that while Westar would fully own the apartments, USC's housing department would manage leasing and building management. 

While Best often notes his love for USC, his alma mater, he says his primary reason for outsourcing management to the university has to do with economics.
From JOUR309 final
Above: Corsica (Westar Housing)

"The real key is to create enough supply so that private landlords have to compete, and get better service and better pricing," Best said. "And that's what I think 'SC is primarily interested in. As long as we do quality product, we are interested in competing to get as many students in here, and we're not going to be able to do that unless we give them better service and a better price."
From JOUR309 final

Best thinks he sees a clear path to a full wallet and a happy student body in his approach, but he also understands the complications that come with developing in this neighborhood. USC's student community coexists with a community of urban families, most of whom can't afford the kind of business the university setting attracts. 

"You can't antagonize or displace a lot of people," Best said. "What we're concerned about is being able to make sure that we don't infringe on affordable housing." 
From JOUR309 final
Above: Habitat Soo Zee (Westar Housing)

Be that as it may, Best doesn't plan to lose any money on the deal. His goal isn't to offer the cheapest housing, but the most valuable housing for the money spent. In some cases, he says, the his prices were drastically lower than they had been. In others, Westar raised the bottom line. 


Full interview with Bob Best, CEO, Westar Associates

Homes away from homes

During their time at USC, most undergraduate students move at least two or three times. As freshmen, students are urged by the university to live in USC-owned housing either on campus or off. But such arrangements only accommodate around 6,500 people, and the annual housing lottery favors younger students. That means many USC students are turning to private landlords as early as sophomore year. And, as one might expect, inexperienced college kids and money-hungry landlords don't always mix. 

From JOUR309 final
Above: Ground floor retail at Westar's Tuscany Complex

Landlord problems are nothing new to Kevin Brashear, a junior and a Tuscany resident of two years. He lived in the USC-owned Radisson his first year, but when his housing lottery number yielded unsatisfactory results in spring 2007, he decided to move into a three-bedroom off-campus apartment with five of his friends. 

"I think it's not as fair," Brashear said. "But I think [Tuscany] is one of the exceptions. What used to be Conquest was sort of a price gouger, and it was a good product but it wasn't worth the price."

In spite of his negative experience, Brashear, along with many other students, says he'd like to see more private development close to campus. 

"I think it will be better for the student to have more options," he said. 

 Full Interview with Kevin Brashear, USC Junior, Aerospace Engineering

Nearing the end of her freshman year, Kate Mather, now a Sophomore, faced a similar situation to Brashear's. But instead of moving into private housing, she decided to spend another year with TrojanHousing at the university-owned apartment complex, Troy East, located on Royal Street just north of campus. Mather said she has been satisfied with her experience on the whole, if not impressed by it.

"The furniture isn't the best, the appliances aren't the best, but Troy East is pretty cheap to live in and it's spacious," Mather said. "So for sophomore year it's not that bad." 

But Mather's contract with TrojanHousing will expire in May, and her sophomore status has made finding USC-owned housing for next year difficult. So she has made arrangements to rent a room in a building on 30th Street owned by Nupac Apartments, which owns 12 properties around campus. She is optimistic about the move, but says she doesn't expect her new landlord to match USC's high management standards.

"I don't foresee my landlord or my maintenance people fixing my problems the day after I report them," she said. "That will probably be the biggest thing." 

Full Interview with Kate Mather, Sophomore, Print Journalism

Sidebar: Why bring your business to a university campus?

Anyone who has ever lived near a college campus knows that, for college students, partying is a way of life. During the course of a lease cycle, students are much more likely to be difficult, costly tenants. So why, then, would a developer invest in student housing? As it turns out, the answer to that question depends on where you are.

The City of Los Angeles abides by one of the most stringent rent control codes in the United States. If a tenant remains in the same unit, in most cases, the landlord's ability to raise rent from year to year is very limited. As Jim Clarke, Executive Director at the Apartment Association of Greater Los Angeles, points out, this problem is essentially nonexistent in the student housing sector. 

"Because LA is subject to rent control, the upside would be that students are vacating more often," Clarke said. "When a unit is vacated, it is decontrolled and you can raise the price to fair market value." 

Clarke noted the few obvious downsides to competing for student tenants, but said that overall, student housing as a business has been trending upward for years.

Full interview with Jim Clarke, Executive Director, AAGLA

Sunday, March 8, 2009

Left in the dust

A Site for Sore Eyes
In Bell Gardens, a small city just southeast of Los Angeles, attention doesn't come easily. It is just one in a string of cities along the 710 freeway that often seem to evade the scrutiny of the press, the authorities, and even the district attorney's office. 
Several Bell Gardens politicians, most infamously former councilman Mario Beltran, who was recently convicted on two counts of campaign finance fraud, have drawn recent suspicion from federal investigators for their apparent illegal procedural exploits, but many of the city's most devastating problems have a tendency to go perpetually unaddressed. 
One of the more tangible examples of this unfortunate but all-too-common neglect is the fenced-off and supposedly contaminated parcel of land located just a few dozen feet from two schools and a residential neighborhood on the east side of Bell Gardens. 

The small vacant lots are the former sites of two chrome plating factories, J&S Chrome Plating Co. and Chrome Crankshaft, that allowed chromium and mercury to leak into the soil and groundwater. Since the recognition of the leaks and the subsequent bankruptcy of both companies 28 years ago, the lots have remained largely untouched by the California Department of Toxic Substances Control, standing as a reminder to the community of its low priority. 

Since the early 1980s, green fencing and ominous signs  have guarded the contamination site, warding off anyone who might have plans to sneak in. But neighboring business managers say that doesn't stop gang members and the homeless from entering at will. 
According to Gloria Conti, an information officer at the DTSC, the organization conducted an assessment of the contamination in 1987, seven years after discovery, and ordered that the land be cleaned. But, as Conti explains, this task is easier said than done.  
"One of the reasons a lot of these sites don't get cleaned right away has to do with a lack of funding," she said. "These cleanup processes cost millions and millions of dollars. I mean part of the time is identifying the site in the first place. But the other part is finding someone to pay for it. If there isn't any owner or private entity to pay, it gets put on a backlog." 

Conti also noted that one of the most important aspects of her job is information distribution. When the DTSC identifies a contamination site, she is assigned to handle the crucial task of keeping the surrounding community in the loop.
"We have got these sites all over the place and it's upsetting people," Conti said. "I've had people make demands, saying they want us to buy them a house or put them up in a hotel. People say they are scared that these sites are near them and I say, 'well we all live near them. They are called gas stations'."
But many of the nearby residents, some living only a few feet from the site, are dissatisfied and disenchanted with government, and in this case, the agency responsible for ensuring a safe environment for their families. 

A Town on the Fringe

Though it is geographically and integrated with the other 87 cities that comprise Los Angeles County, the city of Bell Gardens is self-sustaining. Spanish is far and away the most used language according to the U.S. Census Bureau, which reported that 93 percent of the population is hispanic and more than 88 percent speaks the language at home. The Bureau also estimates that the direct immigrant population is up above 50 percent. 

The rate of poverty in Bell Gardens is also staggering. With nearly 30 percent of the population living below the line, Bell Gardens more than doubles the national average in that regard. In addition, the per capita income is under $10,000, little more than one third the national average. 

From Bell Gardens contamination site

In the neighborhood that surrounds the contaminated parcels, the polluted soil is no secret. In fact, many of Bell Gardens' lifelong residents remember the incident vividly. It has been about 15 years since the factories vacated, and the only information they have received since that time has come in the form of brief flyers available in the administrative offices of the schools. 

Baldy Vasquez grew up in Bell Gardens, and he now has a daughter who attends Suva Elementary, one of the schools next to the contamination site. Vasquez said he doesn't necessarily fear for his safety, but he is frustrated at how little attention the matter received.

"They don't tell us anything," he said. "They just leave us here to get sick or something. I don't even know who 'they' is ... It's been years and we live around it every day. And nobody will listen to us." 

From Bell Gardens contamination site

From Bell Gardens contamination site
Dacia Thompson, who lives directly across the street from the site, feels the same way. Thompson was a student at Suva Intermediate, right next to Suva Elementary, when news broke of the heavy metal leak. She said though it's been a while, she still remembers it well.

"When we heard about it, everyone was really freaked out," she said. "But after a while, it just sort of went away." 

Like Thompson, many residents of Bell Gardens speak of the incident with a reluctant sense of acceptance. Many still wonder if and when the land will be tended to, but others say they would rather not think about it. 

Tuesday, February 3, 2009

Community Profile: Sam Rodriguez


From Bell Gardens contamination site
Sam Rodriguez owns a small steel spinning shop directly across the street from the contaminated parcels of land in Bell Gardens. On the weekends, he says he likes to relax with a few beers as he fixes his cars.

Rodriguez, 26, has lived in Bell Gardens all his life, and he doesn't plan to leave anytime soon. 

"I love this place, man," he said. "I grew up here. It may not be much but It's home." 

From Bell Gardens contamination site
When the subject of the contamination came up, Rodriguez groaned as he recalled it. 
"Oh, man I forgot about that," he said. "And my little daughter goes to school there."

He joked about the prospect of putting her in a private school, but then admitted that he had no such resources. 

As Rodriguez remembers, there were four people who became ill as a result of the contamination in Bell Gardens. Cases of cancer or other illness in connection with the incident could not be confirmed by the state, but Conti, of the DTSC, did not rule out the possibility that isolated cases might have arisen.

"It was really bad, man," he said. "Everyone heard about these four people who were sick. But as far as I know, nothing really came of it." He paused. "Man, I haven't thought about that in years."