5 Rose Ave. tenants wonder: Do you have to be rich to live by the sea?
By Jim Smith
The big white-brick building on Rose Avenue, smack up against the beach, is a historic reminder of Venice a hundred years ago. It’s also a symbol of an affordable Venice and a developer’s fantasy of an unrecognized and gentrified Venice to come.
Until a few years ago, a faded sign high up on the building still advertised long-gone rooms for $1.50 a night. While the sign is gone, 5 Rose remains a home for many with low incomes where they can smell – and hear – the surf, and breath fresh air.
But now, 5 Rose is in danger of becoming Lincoln Place-by-the-sea where more and more apartments are vacated and remain empty.
Disabled and seniors with Section 8 vouchers still occupy 25 of the 60 mostly-single units, but 16 more are now standing vacant, their residents having decided to move on, or have been paid to leave. Tenants under the federal Section 8 program pay 30 percent of their income in rent. The program supplements this with as much as an additional $500 a month. At 5 Rose, the landlord receives a total of about $850 per month. The remaining apartments are market rate and rent for as much as $1,100-1,250 per month. Presumably, when their occupants move out, they will not be re-rented.
The building was sold last April. The previous owner, MacLaurin Ocean View Properties, offered some helpful hints to the buyer on how to gentrify the building: 1) put a bar in the basement; 2) turn the ground floor apartments into retail spaces; 3) put a patio on the room; 4) investigate kicking out the Section 8 tenants.
John MacLaurin, a professional landlord and yachting enthusiast, reportedly bought 5 Rose in 1975 for $250,000. However, he borrowed nearly $3 million on the property in 1997-98 and stopped accepting new Section 8 tenants. He then put the building up for sale.
To facilitate the sale, a real estate broker had a 32-page brochure prepared that waxes eloquently about the building and the neighborhood: “Venice Beach has now become a desired tourist destination for travelers the world over. Unlike any other place on earth, it’s as well known for its artists & musicians (Dennis Hopper, Rip Cronk and The Doors), as it is for its picturesque coastline and miles of sandy beaches. A walk along the Venice Boardwalk instantly makes you aware of the city’s free spirit and creative atmosphere...”
A property consortium in Calabasas decided this was a hot property and plunked down $10,800,000 for the 95-year-old apartment building. Unfortunately for them – and perhaps for the tenants – Zillow.com, the property appraisal website, estimates 5 Rose as being worth only $4,106,885.
How can the suits from Calabasas recoup their investment? They could join the crowd and convert to condos. But that would require extensive remodeling and there’s a big problem – there’s no parking at the building. In the face of determined tenant resistance, the city might be hard pressed to approve a condo conversion without any place to park.
Another option would be to turn the building into a boutique or an extended stay hotel. There have been several such conversions at smaller buildings in the North Beach area.
What would happen to the tenants if they had to move? There are few options for a large low-income migration in Venice. At Lincoln Place, some tenants had to go as far as San Bernardino and Escondido to find affordable housing. If they are forced out, younger renters would receive $8,500 to move, according to the city ordnance. Seniors and disabled tenants would get $17,000 to move. But after paying first and last months rent to move in, and a much higher rent every month, the money would probably be used up within a year.
Posted: Thu - November 1, 2007 at 02:23 PM