Yesterday we announced an expansion of a rent assistance program for the residents and commercial tenants of Nico Echo Park, which we are posting here.
To the residents and commercial tenants of Nico Echo Park,
We’re living through an unprecedented moment – a moment of deep personal, societal, and economic shock stemming from the public health crisis that has touched us all in different ways. Uncertainty, fear, and pain are being felt by many across Los Angeles and throughout the world. Despite $2 trillion in economic stimulus meant to support the economy, not enough has yet been done to support those most impacted by this emergency. As a housing provider giving home to approximately 120 residents and 4 small businesses across our 3 buildings in Echo Park, we feel a deep sense of responsibility to support our community through this challenging moment.
Last month we launched a program to support residents and commercial tenants by making up to 100% of security deposits available for use towards April rent, if you are a) experiencing a hardship related to the health crisis and b) “opted in” to the rent assistance program by taking a short survey and then talking with a member of the Nico team (both of these steps have helped build our understanding of how this emergency has impacted you to date). So far, approximately 25% of residents or commercial tenants have either fully “opted in” or have begun the process – we believe that this number may increase as the months progress.
Based in part on the feedback that we received from you over the past 3 weeks during the opt in process, we’re announcing today a series of additional assistance initiatives that we hope will create greater security for you and for the stability of this community overall.
There are three main parts to the program that in total represent about $375,000 in available support: releasing security deposits to be used towards rent, a community rent assistance fund, and community wealth grants. Together, we expect that these pools of funds (which are explained below) can help to a) eliminate (or at least offset) the amount of money that you would otherwise owe once the emergency ends and b) help lay the foundation for a new model of community wealth that is inclusive and balanced.
The availability of security deposits will remain in place for the duration of the emergency period. This means that you can use up to 100% of your security deposit for rent if you need it, after opting in by taking the survey and having a call/video chat with a member of the Nico team. Electing to use your security deposit towards rent is the first step before money from the community rent assistance fund (below) would be available to you.
Community Rent Assistance Fund
If you have opted in to the rent assistance program, or do so in the future, your security deposit will first be used towards rent. Once that has been applied to rent, we have committed up to $150,000 to cover some or all (as needed) of your rent. We believe that this fund, when coupled with the security deposits available to most residents, will provide approximately 3 months of total support to the most impacted residents and commercial tenants of our buildings. These funds are being provided in the form of direct cash assistance from Nico; it is not a loan and does not have to be repaid. However, the funds are limited, and we ask you to not opt in unless you are experiencing hardship, so that the funds may be available for those within the community who are.
Community Wealth Grants
As you know, Nico (the Neighborhood Investment Company) is a new model that seeks to create a new way for many more people to participate as financial stakeholders in their community by investing in local real estate. We started Nico with a mission to localize wealth creation and broaden access to neighborhood equity – a mission that was born out of a desire to evolve real estate investing for the benefit and inclusion of people and the communities they call home. We have started this mission by launching Nico Echo Park, Benefit Corp. – the world’s first Neighborhood Real Estate Investment Trust (or Neighborhood REIT).
The need to reframe how we build wealth as communities has never been clearer. To provide a longer-term form of support for our community, we are offering each family unit or business who either remains current on rent or opts into the rent assistance program a one-time grant of shares in Nico Echo Park, Benefit Corp. of $1,000 (up to a total of $100,000). This should be viewed as a long-term investment in Echo Park and will mean that you will have a financial interest in the buildings owned by the REIT, including your own building. We know that rent is top of mind right now, but believe deeply that the way wealth is created in America needs to evolve to be more local, more inclusive, and more focused on balancing financial outcomes with human outcomes. This gesture of partnership is in the spirit of this belief.
We want to underscore that there is no obligation to opt in, and that the legal protections and repayment policy currently in place in the City of Los Angeles are available to you regardless of whether you opt in. The Los Angeles Times recently wrote a useful primer meant to help renters navigate those protections, which you can find here. Should additional assistance or regulations be put into place, we will do our best to navigate them (and may withdraw elements of this assistance program if a benefit that is offered by the federal, state, county, or municipal government renders a benefit outlined here redundant).
We want to conclude by stating simply that we are here for you and hope this crisis ends soon and with as little pain as possible. We will be following up over the next week with details on the elements of this program and wish you good health in the meantime.
Max Levine, John Chaffetz, and the Nico Team
An important note on the tax implications of the Community Rent Assistance Fund and Community Wealth Grants:
Please be advised that any funds received pursuant to the Community Rent Assistance Fund and/or the Community Wealth Grant will be subject to Federal and possibly California income tax. You will be responsible for satisfying any tax liability resulting from receiving assistance under either program. Please consult your personal tax advisor/accountant before deciding whether to participate in either Community Rent Assistance Fund and/or the Community Wealth Grant program.
If you have any questions, please reach out via our contact us page.