Now that the Great Recession is more or less over (for the time being) there seems to be a mistaken sense that we’re all doing better. But if you’re someone who can’t afford the rent—and that number is growing as rents nationwide grow astronomically—that couldn’t be further from the truth. In California that issue is problematic not just in San Francisco, but also in Los Angeles.
According to a recent study by the state-funded California Housing Partnership Corporation, the financial crisis converted homeowners into renters and drove down salaries. In Los Angeles County, the study asserts, rents went up 25 percent from 2000 to 2012, but incomes fell 9 percent. They indicate that the county now needs at least 490,340 more affordable homes. Reinforcing these findings, a recent study by the UCLA Luskin School of Public Affairs found that LA is now the most unaffordable rental market in the country, with lower incomes than those of cities like New York and San Francisco and only a small difference in rent.
The private market, which zeroes in on maximum profit, isn’t much help. In the Los Angeles Times, urbanist Joseph Mailander pointed out that the market “works to serve only the affluent and double-income professionals, because the returns to the builder and the contractor are so much more promising than they are for building starter homes.”
Meanwhile government support has waned dramatically. The city has allowed its affordable housing trust fund to nosedive, using its resources to pay off deficits, while federal Housing and Urban Development funds have fallen off severely. According to the Los Angeles Housing and Community Investment Department, federal and city money for affordable housing has dropped from $108 million per year in 2008 to $26 million this year.
There are signs that the city and the affordable housing world are beginning to address the problem. Affordable housing developers, unable to rely on as many public funds, have gotten creative at financing projects through new grant sources and public-private partnerships, to name some strategies. And last month Mayor Eric Garcetti announced a goal of building 100,000 new housing units in Los Angeles by 2021 through restoring the Affordable Housing Trust Fund; subsidizing affordable housing on sites currently owned by METRO, the city’s transit agency; and cutting red tape on building in general through development streamlines and CEQA reform.
But much more needs to be done, and fast. For one, the city should take councilman Mitch O’Farrell’s advice and put at least 25 percent of its former Community Redevelopment Authority funds into affordable housing. The city should impel developers to include more affordable housing in their buildings, with such demands offset by allowing developers to build higher and denser. Another good technique: other west coast cities like Seattle and San Francisco have effectively forced developers of non-housing projects to pay “linkage fees” to help support affordable housing.
Meanwhile Los Angeles should think more creatively with its models and codes. It can follow some cities in Europe by developing its own affordable housing on government-owned land (transit sites should be just the beginning). And it can update zoning restrictions to battle sprawl with affordable density and allow, for example, prefab homes and even shipping containers to be made into affordable housing.
None of these plans should badly burden businesses, or the city, but all will benefit from a healthy mix of income. Among other things, affordable housing means stable communities, more jobs (affordable housing encourages companies to move in), shorter commutes (and hence less traffic and pollution), and less (very costly) homelessness. We may think we’re getting more prosperous as our economy improves, but that will prove to be a dangerous, and expensive, mirage if we don’t manage our development the right way.