Little Tokyo Towers Board Updates Progress on Renovations

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The RAHD Group selected for rehabilitation of senior housing complex.

Seniors outside Little Tokyo Towers in 2015. (Photo by MIKE MURASE)

Rafu Staff Report

At more than 40 years old, Little Tokyo Towers is starting to show its age. The Little Tokyo Towers board recently updated the community on its plans to rehabilitate the senior housing complex on Third Street in Little Tokyo.

The RAHD Group, a San Diego-based affordable housing developer, has been selected to assist LTT in the process. In 2018, the City of Los Angeles notified LTT that the building required a structural engineering inspection and evaluation and may need major structural reinforcement work to meet current earthquake building standards.

Little Tokyo Towers was built in 1975 to address the need for affordable housing for the elderly in Little Tokyo. Over the years, the demographics of the building have changed, as has Little Tokyo. Japanese American seniors are now the second-largest group of tenants, after Korean Americans.

Bob Kawahara, president of the LTT board, said the building has been well kept but needs major rehabilitation work beyond earthquake retrofitting, including installation of new elevators, expansion of interior unit and common area space, low-energy windows, repairing or replacement of all major systems (plumbing, electrical, emergency, HAVC), and full remodeling of interior apartment units.

Cost estimates to complete the full scope of work range from $35 million to $45 million. The RAHD Group was selected out of proposals presented by five developers. The selection committee included representatives from all four LTT founding organizations (Southern California Gardeners Federation, L.A. Buddhist Temple Federation, JACL-Southwest District Council, Southern California Christian Church Federation).

Among the rehabilitation projects RAHD has completed are Kiku Gardens, a 100-unit senior community in Chula Vista.

“We feel confident this group has the experience, knowledge and ability to put together a package that will be successful,” Kawahara said.

The project would utilize Low-Income Housing Tax Credits, a federal program in which financial institutions and other corporations invest equity in return for federal tax credits. The LTT board, with the assistance of its consultant, Mitch Thompson, negotiated a deal that did not involve the transfer of any ownership in the Towers to The RAHD Group.

Currently there are 180 HUD Section 8 units that are rented for approximately $675 per month, of which residents pay about $250 to $300. One of the next steps will be to renegotiate a new contract with HUD, which would extend the term of the contract for 20 years and increase the rental assistance being paid by HUD to reflect the market rents for those units.

During a Zoom meeting on Sept. 19, some attendees asked about the affordability of rents. There are 120 non-Section 8 units; 30 of those units that have been rented to new tenants at the monthly rate of $1,091.

All existing residents’ rents are controlled by the L.A. rent control regulations and can only be increased annually by the allowable 3 to 4 percent of the prior year’s rent. All unit rents are significantly below market rate and are below that which a low-income household at 60% of the Los Angeles area median income could afford, approximately $1,250 per month.

The LTT Board said that maintaining rents at their current levels would make it impossible to obtain enough funding to do all the necessary work that the Towers need in order to extend the useful life of the building. The board will also consider creating a private rent subsidy program for tenants, should that be appropriate, to pay the difference between the contracted rent for the unit and the amount a resident can afford to pay. Creation of this fund will depend on project financing and the availability of funds.

Between now and January 2021, RAHD will be assisting LTT in identifying money sources, putting together a funding package and preparing an application to submit for an allocation of tax credits and bond approvals.

Construction work is due to start next June with a completion date of around December 2022. For more information, contact [email protected]

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