LA’s racism scandal reverberates in real estate

President Biden urges three members of LA City Council to resign over leaked audio about renters

Kevin De León, Gil Cedillo and Nury Martinez (Illustration by The Real Deal with Getty)
Kevin De León, Gil Cedillo and Nury Martinez (Illustration by The Real Deal with Getty)

Tremors from the scandal in which Los Angeles City Council members made insulting comments about African-Americans, LBTQ+ people and Oaxacans have reached The White House with President Joe Biden urging councilmembers Nury Martinez, Kevin De León and Gil Cedillo to resign.

Real estate has played a role in the scandal from the inception and fallout in terms of resignations could affect future development.

Cedillo leads the City Council’s Housing Committee. If he resigns, the committee will be led by its current Vice Chair Nithya Raman. Endorsed by left-wing group Democratic Socialists of America during the 2020 election, Raman recently scored a victory when her “just cause” eviction protections were included in an agreement to end the more than two-year pandemic eviction moratorium.

Cedillo only has a few months left in his term. He lost a bid for a third term when he was defeated in an election this summer by progressive candidate Eunisses Hernandez.

De León helms the council’s Homelessness and Poverty Committee, which manages policy on shelter for the unhoused.

Martinez, who has resigned her position as City Council president, made comments about renters in the leaked audio which was published in the Los Angeles Times on Oct. 9.

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In the audio, Martinez, Cedillo, De León and Ron Herrera, the former president of Los Angeles County Federation of Labor, plotted to redistrict the city’s electoral map. Martinez sought to cut the political muscle of renters for council colleague Raman, when she mentioned the Koreatown section of Los Angeles on the leaked audio.

“It serves us to not give her all of K-Town,” Martinez said of Raman. “Because if you do, that solidifies her renters’ district, and that is not a good thing for any of us. You have to keep her on the fence.”

Dan Yukelson, executive director of Apartment Association of Greater Los Angeles, said that the leaked comments have hurt renters and landlords too.

“We have had enough animosity these past almost three years of COVID protections,” Yukelson said, referring to tensions between landlords and tenants. “She’s trying to stir the pot even more. We have housing issues, but both sides need to work together. … There needs to be a coming together of both sides so we can stop this political gamesmanship.”

Earlier in the week, UCLA real estate professor Eric Sussman told TRD the impact from the scandal on the real estate industry would depend on resignations.

“If and when she resigns, pending projects would need to be supported by her successor,” Sussman said in reference to Martinez.

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Councilwoman Nury Martinez, Councilmen Kevin de León and Gil Cedillo, Los Angeles County Federation of Labor's Ron Herrera (Getty, Nury Martinez, California Senate/Public domain/Wikimedia Commons, Gil Cedillo, LA County Federation of Labor)
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