LOS ANGELES, April 4, 2017 — Tenants in a Skid Row affordable housing building have settled a lawsuit with the building’s owner, management company, and former owner over mistreatment and harassment of tenants, including many who are disabled, veterans and elderly.
In November 2015, 15 long-term residents of the Madison Hotel, at 423 E. 7th St., and a tenant-organizing group, Los Angeles Community Action Network (LA CAN), sued the landlord and management company, alleging they violated tenants’ civil rights and failed to provide habitable conditions in the 220-room building. The parties were represented by nonprofit law firms Legal Aid Foundation of Los Angeles and Inner City Law Center, as well as pro bono counsel from Skadden, Arps, Slate, Meagher & Flom.
Before the lawsuit, defendants had launched a harassment campaign against tenants that included taking away common areas where tenants previously gathered, leaving the heat turned off through cold winter nights, allowing bedbug and roach infestations to fester, making derogatory comments toward residents, refusing to clean the shared bathrooms, denying access to tenants’ guests, and refusing to repair the building’s elevator, which effectively imprisoned those tenants whose physical impairments restricted them from using the stairs. As a result of this ongoing harassment, many residents were forced to leave.
Owner Kameron Segal stated that he was taking steps to force out current Madison tenants in order to get “better tenants,” meaning “those who are willing to pay market rents.” Current tenants’ rents are between $290-$500 per month. Prior to legal intervention, Segal managed to vacate about half of the units in the building, which is situated in LA’s Skid Row, the area with the highest concentration of homeless residents in the country.
Defendants named in the lawsuit were 423 E. 7th Street LLC, property management company William Holdings LLC, Kameron Segal, former management company Bellaire-Downtown LLC, and former owner George Lintz. The defendants admit no wrongdoing.
“This is a victory not only for Madison tenants, but for all low-income residents throughout downtown who call this neighborhood home,” said Ariana Alcaraz, a tenant organizer with LA CAN. “We must continue to find effective ways, in addition to lawsuits, to protect vulnerable tenants who are fighting shady building owners attempting to gentrify our community and displace poor folks.”
The Madison Hotel and buildings like it are “the housing of last resort,” said Fernando Gaytan, managing attorney with Legal Aid Foundation of Los Angeles. “Los Angeles is one of the most expensive housing markets, and we can’t afford for this kind of housing to go away. It keeps veterans and people living on fixed incomes close to their networks of social services, and allows them to live independently.” Many residents of the hotel would be homeless if such affordable housing weren’t available, Gaytan said.
Under the settlement agreement, William Holdings and Segal have agreed to restore services, including keeping the shared bathrooms clean, and turning the heat on when needed; they agreed to ensure repairs are responded to within 12 hours for emergencies and three days for other issues. Guests, who had been banned from the hotel, are allowed again. In addition, all staff will receive anti-discrimination and anti-harassment training, and the building will institute a policy for reasonable accommodation of tenants’ disabilities consistent with applicable law.
Defendants will also pay $610,000 in damages and attorneys’ fees as part of the settlement.
“We are thrilled to have reached a resolution that will allow our clients and others in need of low-cost downtown housing to continue calling the Madison home,” said Amanda Goad, director of litigation with Inner City Law Center. Goad further noted: “We look forward to seeing conditions in the building improve through restoration of services and training for staff.”
Segal purchased the building in June 2015 for $5.6 million and quickly put it on the market. The building is no longer for sale.