By raising hundreds of millions of dollars of what is loosely called social impact capital — put up by private investors who are willing to risk their money for a public good — SoLa funded a five-year buying spree.
“We purposely bought some of the tougher buildings to rectify them, certainly because there was an economic discount,” Muoto said. “This is not Moses leading people out of Egypt. But if we didn’t buy them, who would, right? If we didn’t invest, who would, right?”
Muoto calls his business ethos “doing well by doing good.” His evangelistic model, detailed on SoLa’s website, has won praise for attracting capital into poor Black and Latino communities generally shunned by financial markets and for pursuing a private market solution to house homeless people.
His detractors say the company has not lived up to those ideals.
“They bit off more than they could chew, and they sat on everyone they had to to get it done,” said Ve’ona Rogers, who has battled SoLa over bed bugs, mold and patio furniture at her apartment on East 60th Street. “They took advantage of poor people who couldn’t protect themselves.”
SoLa has been named in multiple lawsuits over labor relations and habitability.
“This is a 12 out of 10 on a slumlord scale,” Grant Riley of the Beverly Hills law firm Riley / Ersoff said of one SoLa building where he represents tenants. Riley’s firm has four lawsuits pending against SoLa alleging unlivable conditions.
He acknowledged that he found the company’s dual personality hard to comprehend, noting that most bad landlords keep a low profile.
“It’s a complete disconnect,” he said. “First of all, slumlords don’t have websites.”
In several interviews, Muoto acknowledged letdowns in the maintenance of SoLa’s challenging properties but dismissed his critics as ideologues who seek out disgruntled tenants to advance an anti-corporate agenda. He said SoLa has improved the housing stock of South L.A. by renovating half the units in its portfolio, spending more than $1 on rehab for every $4 in purchases.