Los Angeles County has an extreme shortfall of affordable housing, according to a new report from the California Housing Partnership and the Southern California Association of Nonprofit Housing, and 568,255 new units are needed to satisfy the demand of lower-income renters.
Based on Census data, the report indicates that more than 800,000 renter households would qualify for affordable housing, were it available. But fewer than 300,000 units are available across the entire county at rents that would be affordable to these residents.
That means most lower-income renters are stretched thin by monthly payments that take up a huge portion of their budgets. Households earning less than half the median income, spend more than 70 percent of their income on rent, leaving little money left over for essential needs like food and healthcare.
The association’s director, Alan Greenlee, tells Curbed that statistics like this challenge the idea that Los Angeles is a place where “you can make a living and afford your house and send your kids to school.”
He argues that high rents don’t just make it hard for lower earners to make ends meet; they also hamper the region’s overall economy.
“When you’re spending so much of your income on rent, that money’s going to landlords instead of grocery stores,” says Greenlee.
Compounding the problem in the short-term is a steep decline in the number of affordable units produced using low-income housing tax credits in 2017.
Greenlee says the 54 percent dip in development of these units between 2016 and 2017 is probably due to uncertainty on the part of investors about how federal tax reform would affect the value of those tax credits—relied on by developers for many affordable projects.
Because the value of low-income housing tax credits has increased in recent months, affordable housing production might pick back up again. But that won’t be enough on its own to close the gap between needed and existing housing.
The report offers several policy recommendations for addressing this issue, including increased spending at the state level and passage of a $4 billion bond measure for affordable housing that California voters will decide on this fall.
Its authors also recommend that state lawmakers find a way to return financing systems to cities that could pay for projects similar to those taken on by the now-shuttered community redevelopment agencies.
On a more local level, county and city officials could offer new renter subsidies, eviction protections, and a streamlined development process for affordable housing (similar to the system now in place for permanent supportive complexes built for homeless residents).
Greenlee says that higher earning residents should get behind policies that lead to more affordable housing production.
“Intellectually, I think that people understand that it costs a lot to live here,” he says. “But there still continue to be misunderstandings about people who happen to be poor—there’s a perception that it’s somehow those people’s fault.”
He speculates that those feelings sometimes manifest themselves in opposition to new development, which can exacerbate the area’s existing housing shortage.
“There’s a lot of education and growth that needs to happen in our community,” Greenlee says. “But we gotta build.”
Comments
Greenlee says that higher earning residents should get behind policies that lead to more affordable housing production.
How about just more housing overall? Why only make it easier for a few lucky lottery ticket winners to live here. Why not make it easier for everyone to live here.
By RXBXUXNX on 05.17.18 2:30pm
If we just built more housing generally, it would put downward pressure on prices, and many units would become naturally more affordable. We don’t need a ton of subsidies, we just need to upzone large areas of the city, which SB 827 would have done automatically…
By disqusted on 05.17.18 4:40pm
Don’t worry, Los Angeles has a plan!
Double the zoning density of about 20 parcels, from 2 units to 4, and then wait 10 years to be able to evaluate the effect on the number of housing units and prices to decide the next steps. Oh, and also require that 200% of all new housing units are affordable housing. You can drop that number down to 100% by making donating to a LA City Councilperson’s campaign fund.
By goingup on 05.17.18 6:12pm
No need to "double the zoning density".
Just restore original density levels that Zev Yaroslavsky (D) destroyed with Prop-U.
Then remove all rent control (including relocation requirements and delays), remove HPOZ restrictions, decouple parking requirements (no cheap street permit parking for new-building residents) , and create pro-forma fast-track designs for four-story multifamily walk-ups that builders can construct in six months, not four+ years. Give new construction a five-year property-tax-holiday, then phase in over ten years.
You will see investors stepping all over each other to build the 600K units, no corrupt "affordable" programs needed.
Rents. Will. Drop.
By smartalex on 05.18.18 9:08pm
re: "Rents. Will. Drop." even if true this "end" doesn’t justify "the means" (imho) especially the idea that we "Give new construction a five-year property-tax-holiday, then phase in over ten years."
A much fairer plan would be to cancel the real estate tax exemption for religious cults, then watch how many of these storefront preachers but their land up for sale.
FYI: I’m with you on rent control and street parking permits.
By YCHARTS on 05.19.18 4:06pm
So we went from needing 500,000 to 600,000 more affordable housing units. And they haven’t even made a dent in building the 10,000 units that we, the tax payers, have already agreed to pay for. How exactly is taxing me more a solution to this problem? I have an idea. Get rid of CEQA and rent control, and redo the zoning so private contractors can develop more units using private capital. Stop taxing me more based on a lie that my taxes are going to solve this problem.
By LADude on 05.17.18 2:44pm
wanna free up some land for more housing?
remove property tax exemption for buildings owned by religious cults.
I for one am tired of subsidizing their childish delusions
By YCHRATS on 05.17.18 2:57pm
Religious cults? Wow bro you’re so edgy that I cut myself on your comment!!
By Lol u poor on 05.21.18 6:54pm
got any proof of this "cutting"?
By YCHARTS on 05.21.18 10:32pm
there are really only 2 ways housing will get cheaper – either you overbuild to the point where you have much higher vacancy rates and prices drop as a result. Or you need a lot of people to move away. I don’t see either of those things on the horizon. The problem is not unique to LA. It’s starting to become an issue in cities all over the United States. Make a good income or you’re pretty much screwed. That’s the truth that no politician will ever speak.
By LAoneWay on 05.17.18 2:58pm
Actually there is a third solution; try to shoo away Wall Street, hedge funds, foreign investors and so forth. They swoop up loads of properties without ever intending to live in them or even set foot near them. Why? because they can and then they either sit on them and watch the profit margin grow or they turn them into rentals so they can charge sky high rents and continually bleed tenants dry month after month after month. Of course these practices force housing prices to go up in the surrounding areas.
By Cocomnstr on 05.17.18 3:39pm
"try to shoo away Wall Street, hedge funds, foreign investors and so forth." - how? please be specific
"then they either sit on them and watch the profit margin grow" – how does "sitting" on vacant property cause "profit margins to grow"? Buildings still require insurance, maintenance, utilities, management and of course real estate taxes.
"they turn them into rentals so they can charge sky high rents and continually bleed tenants dry month after month after month" whats the metric for determining the amount of "sky highness" in rents?
"Of course these practices force housing prices to go up in the surrounding areas.’— how do both vacant units AND rented units simultaneously cause housing prices to increase?
By YCHRATS on 05.17.18 4:06pm
First of all, a vacant property thats off the market is still off the market. Whether or not a human being currently resides there is of little consequence, it is still off market. That being said, if its empty than utilities are typically not even turned on unless there is work actively being done on the house but that’s rarely the case because the market is such that even a dilapidated crap shack can still sell for buttloads of money just because of the dirt upon which it sits. Investors typically don’t waste much money fixing up a property because why bother? It will sell at a profit in a year or two either way and the goal of successful investing is essentially "buy low, sell high" and in most cases spending extra money rehabilitating a property is antithetical to that profiteering philosophy.
Point is that its the sale that drives up prices in the area. Why? Because the "market" value of property is largely determined by the sale prices or rent prices of comperable homes in that neighborhood.
The as far as the metric for determining what’s "sky high" in rents – scroll up, genius. Affordability. It’s the subject of the article to which the comments thread you are currently trolling is attached.
And as far as property taxes are concerned, this is California we’re talking about here. Thanks to Prop 13 property taxes are locked in at a very low rate. Initially 1%of appraised value at time of sale and the taxable value does can not appreciate more than 2% annually. Its like rent stabilization for property owners. Speaking of which, I bet a great way to scare off these big money investment groups would be to change Prop 13 so that it applies only to owner occupied residential properties.
By Cocomnstr on 05.17.18 11:35pm
"Whether or not a human being currently resides there is of little consequence, it is still off market." uhhh if its occupied or not "on the market" its not effecting the sales or rental market.
"if its empty than utilities are typically not even turned on" how do the burglar alarm and security cameras work without electricity?
"Investors typically don’t waste much money fixing up a property because why bother?" google this: "how to flip real estate". One of the reasons might be that buyers want houses that are move-in ready. another might be that a house in good condition (post repairs) will sell for more money then a house in poor condition. last time I checked "more money" is a good thing
"It will sell at a profit in a year or two either way " there is ZERO guarantee that this will be, or is, true.
"and the goal of successful investing is essentially "buy low, sell high" well that might be YOUR goal, but its not the only goal. some/many real estate investors are content with "buy low, fix up, rent out, cash checks, hold long term, deed over to children"
"Point is that its the sale that drives up prices in the area" they can also drive DOWN prices in the area as well. perhaps you should live through a few cycles before making sweeping declarative statements.
"Because the "market" value of property is largely determined by the sale prices or rent prices of comperable homes in that neighborhood. actually the "Fair Market Value" is determined by three factors, the two you mentioned and "replacement value".
"Affordability. It’s the subject of the article to which the comments thread you are currently trolling is attached." yet the article and this blog whine on incessantly about how LA is NOT "affordable". wanna know why troll? because "affordability" is based exclusively on income and not on wealth. A person with $200m in the bank and no job can buy whatever they want wherever they want. Not to mention YOUR ramblings about corporations buying up lots of property for speculation.
"Thanks to Prop 13 property taxes are locked in at a very low rate" wrong. the INCREASES in taxes are capped, not the actual taxes. And California uses the SALE amount as the assessed amount, unless its not an arms-length transaction. And its nothing like "rent stabilization" because rent does not build equity and rent control adversely affects NOI of income property while Prop 13 does not affect sale prices.
so now that I have answered YOUR pissy little rant, lets have some answers:
1) "try to shoo away Wall Street, hedge funds, foreign investors and so forth." – how? please be specific
2) how does "sitting" on vacant property cause "profit margins to grow"?
3) whats the metric for determining the amount of "sky highness" in rents?
4) how do both vacant units AND rented units simultaneously cause housing prices to increase?
By YCHARTS on 05.18.18 12:27pm
OH THE CORPORATE GREED!!!
By CornDog1 on 05.18.18 10:31am
"The association’s director, Alan Greenlee, tells Curbed that statistics like this challenge the idea that Los Angeles is a place where "you can make a living and afford your house and send your kids to school."
Say what? It takes two associations to publish a report that contradicts a complete fantasy. Eagerly awaiting their report on unicorns.
By Cleavon Little on 05.17.18 3:06pm
Would have been nice to know what is the median income referred to in paragraph 3. Also: no need for a comma after "median income" in that sentence.
By nacinla on 05.17.18 3:07pm
I Love LA!
With great need comes great opportunity.
So glad I bought and paid BIG on LA when I did.
Now I reap the rewards.
I Love LA!
By I_Love_LA on 05.17.18 5:35pm
we’re too crowded. shoo people away, starting with the chronically homeless.
By cicinla on 05.17.18 5:53pm
how do you propose we "shoo people away"? please be specific
By YCHRATS on 05.17.18 5:56pm
How do you manage to post 49 comments a day? Please be specific
By LAwastheplace on 05.17.18 7:42pm
HAHAHAHA, YCHRATS sucks ass
By CornDog1 on 05.18.18 10:32am
got photos?
By YCHARTS on 05.18.18 12:28pm
What kind of photos would you like? Please be specific
By CornDog1 on 05.18.18 1:54pm
photos that back up your claim of course
By YCHARTS on 05.18.18 3:16pm