The XXXI Olympic Games are well underway. The Peacock Network has pulled out all stops to preserve the magic of the competition, airbrushing much of the stark reality of Rio with a combination of corporate sterility, wide camera shots, and prerecorded athlete back stories.
Largely whitewashed have been the Zika virus; the sewage-laced Guanabara Bay, the site of sailing, rowing, and windsurfing events; “no-go zones” in neighborhoods created by violent militias; traffic-choked arterials; and failed public services. Traffic problems have been so severe that some members of the International Olympic Committee were said to be lamenting their decision to award the Olympics to Rio de Janeiro before the games even began.
And in the shadows of iconic Sugarloaf Mountain are Rio’s favelas – shantytowns carved into hillsides in which thousands of squatters create seas of entangled dwellings. Here, pollution, overcrowding, and unsanitary conditions result in crime, contagion, and high levels of infant mortality.
Angelenos especially should thicken their skins to the romanticized interpretation of the favelas dished out Cirque du Soleil style in the opening ceremonies. A law tentatively passed by the Los Angeles City Council blurs the lines between legal and illegal housing, creating an opening for the “favelafication” of apartment-heavy neighborhoods in the city – many far exceeding the density envisioned by the city when plans were first approved long ago.
In May, the City Council tentatively approved the law granting the owners of apartment buildings the right to legally operate so-called bootleg units, provided they pledge to make the bootleg dwelling (or another dwelling on the property) into low- or moderate-income housing for 55 years and pay a hefty fine. On-site parking requirements can be waived. The law will favor cash buyers because buildings with bootleg units are uninsurable, and thus unmortgageable.
Noble, if misguided, goal
The concept of granting amnesty to L.A.’s illegal housing units is the brainchild of Councilman Felipe Fuentes, who cites the fact that the city uncovers and eliminates an estimated 400 to 500 illegal units annually in the face of an unprecedented housing shortage. But these units are often firetraps with shoddy electrical setups, crude plumbing, nonexistent heating and ventilation, and no on-site parking. As a former bank appraiser, I’ve seen these bootleg units up close.
In Fuentes’ defense, his goals are noble, but opposition has gathered on both sides of the issue, not least from landlord organizations, which believe the fines and affordability commitments are too onerous.
Putting aside ethics, sanitation, congestion, and fire safety, illegal housing does represent the ultimate in affordable living. After all, the communities that emerge are organic, collective, and unique – and the narrow catwalks and warrens that result do make them pedestrian friendly, sorta. A bonus: No lawyers, brokers, bankers, title officers, architects, or building inspectors need be involved in purchases or remodels – perhaps just an unlicensed contractor and a few weekends of unobserved activity.
Familiar scenes
Americans who watched the Showtime series “Homeland” will be familiar with the Dante-esque La Torre de David, a real-life squatter-occupied high-rise in Caracas. It is the ultimate in modern bootleg living.
In the favelas and places such as La Torre de David, prospective residents simply make arrangements with existing squatters (or the local drug boss) to build an addition or to partition existing space. A new dwelling is built on top of or inside an existing dwelling, a PVC sewer pipe might be glued into someone else’s PVC pipe, electrical extension cords are coupled into other extension cords and, voila, a housing start.
It mirrors the process undertaken by unscrupulous building owners in L.A. neighborhoods as they seek to squeeze additional rental income from existing complexes. The creation of a bootleg unit might involve the conversion of a patio, a utility room, or an attic space into a rentable unit. Impoverished tenants sign leases at reduced rents. It’s not unheard of to find larger bootleg units partitioned to include their own bootleg subunits.
Legalizing these bootleg units blurs lines and opens the door for selective code enforcement in Los Angeles.
While the city identifies thousands of properties that will require costly earthquake retrofitting, it is, at the same time, signaling that it will, for a fee and a pledge, look the other way when some of the most necessary and time-tested building, fire-safety and density standards are being violated.
Let the games begin.
Jeremy Bagott is a senior commercial real estate appraiser covering Southern and Central California for right-of-way firm Bender Rosenthal Inc.
