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Report: LA needs 516,946 affordable homes to meet demand

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But state and federal development funding has dried up

Apartments in Los Angeles
Authors of the report find that minimum wage-earners in LA earn less than the cost of a median-priced rental.
Photo by Liz Kuball

Los Angeles’s affordable housing crisis is well documented, but an annual report from the California Housing Partnership and the Southern California Association of Nonprofit Housing shines a harsh light on the severity of the matter.

According to the report, which is released annually, LA County would need to add more than a half-million units of affordable housing—516,946, to be exact—to meet existing demand from low-income renters.

As high as that number may be, it’s actually down somewhat since last year, when the report’s authors identified a countywide shortfall of 568,255 affordable homes.

Sadly, the change doesn’t necessarily reflect new construction. While the cumulative number of affordable homes constructed and preserved through federal tax incentives inched up on a yearly basis in 2018, it was down 31 percent since 2016.

What appears to be driving the decline in need is a dip in the number of residents eligible for very low- or extremely low-income housing.

Minimum wage in LA County is on the rise, so it’s possible some tenants are earning a bit more, but Southern California Association of Nonprofit Housing public affairs director Jeannette Brown tells Curbed it’s also likely that LA’s high cost of living has forced many residents to move away.

Meanwhile, the $1.2 billion in funding for affordable housing development that city of Los Angeles voters approved in 2016 hasn’t yet produced a single completed project—though several are now under construction.

Subsidized housing is badly needed for many low-wage earners, because the price of most market rate units is out of reach.

Citing an analysis of Craigslist ads undertaken at UC Berkeley, the report finds that median asking rent for apartments in Los Angeles is just under $2,500 per month—more than the $2,297 you’d earn working a full-time job paying the county’s minimum wage of $13.25 per hour.

That leaves families to settle for lower priced units, though even these can eat up a significant portion of renters’ monthly earnings. According to the report, more than half of low-income renters are cost burdened, meaning they spend more than 30 percent of income on rent.

Compounding the problem is a dramatic reduction in state and federal funding for affordable housing production since the Great Recession. In 2008, Los Angeles County received more than $700 million for affordable housing in the form of state and federal grants and money brought in through LA’s now-shuttered Community Redevelopment Association.

According to an analysis included in the report, this number dropped to just $210 million last year. More money is now available through the state’s No Place Like Home program, but federal funding remains comparatively low and community redevelopment agencies are no longer a major source of financing for affordable housing projects.

Authors of the report suggest that California cities and counties need more support to produce needed affordable housing.

“The housing crisis is bigger than any single community and no matter how hard local governments and their citizens work to address the crisis they need help from the state and federal governments,” California Housing Partnership president Matt Schwartz said in a statement Tuesday.

Schwartz argues that state leaders should find a way to replace community redevelopment funding, and make it easier for cities and counties to raise money for affordable housing through ballot measures.

Right now, these initiatives generally require two-thirds approval from voters for passage. Authors of the report suggest this threshold could be reduced to a 55-percent majority.

The report also includes a series of recommendations for local leaders. They include strengthening policies that ensure affordable units are included in new developments, capping rent increases, and providing legal representation to tenants facing eviction.