New Housing Department May Bring Policy Changes in City Hall

In December, 1988, the City of Los Angeles Blue Ribbon Committee for Affordable Housing, staffed by appointees of Mayor Tom Bradley, provided a glimpse into the future for affordable housing. The Committee took pains to point out that the future appeared gloomy: specifically, the Committee found that (1) Population had grown faster than housing production, with a shortfall of 10,000 units per year; (2) Land had become scarce and expensive; and (3) The economy had been generating a significantly higher proportion of low wage jobs; ( 4) “No Growth” sentiments exacerbated an already tightened housing market; and (5) The once strong federal role in affordable housing had been reduced 75% since 1980.

The Committee provided a series of recommendations to begin to resolve the housing crisis. Chief among these were the creation of a Housing Commission to coordinate the city’s myriad housing efforts and the establishment of a housing linkage fee and other measures to bring much-needed resources to the affordable housing effort.

It is within this context that the following new housing initiatives of the Mayor’s office have been introduced.

The Proposed Linkage Fee

I have written for The Planning Report previously on this item (see here). A reasonable fee, probably in the amount of $5/square foot or more, should be placed on commercial and/or retail developers to mitigate the loss of affordable housing due to such development.

With the support of the City Council, the Mayor’s office strongly supported the present “Notice” and “Credit” ordinances in February of this year. The ongoing nexus study, due to come out in September of this year, will tell us much more; e.g., the relationship between the loss of affordable housing and such development, the recommended fee, who should pay the fee, etc.

Such fees would be administered by the City Council, subject to approval by the Mayor. The proper Department to administer the fees is the new Housing Preservation and Production Department.

The Housing Preservation and Production Department and Commission

In late June the Mayor signed into law creation of the City Housing Preservation and Production Department and Commission. The Department should be up and running by early August. Briefly, the duties of the new Department, which was reorganized from the Housing and Rent Stabilization Divisions of the Community Development Department, include:

a) Administering the City’s housing block grant and other housing resources (single and multifamily rehabilitation programs) of approximately $30 million/annually;

b) Taking a lead role in addressing the housing crisis, e.g., administering a $100 million bond program for nonprofit acquisition and rehabilitation of multifamily buildings which are subject to “prepayment” due to expiring federal subsidies; helping shape a city policy on the prepayment issue; training and providing technical assistance to nonprofit developers who are best able to leverage city resources to increase affordable housing stock, etc.;

c) Administering the Rent Stabilization Program of the City of Los Angeles in a role consistent with maximizing the city’s ability to preserve affordable housing.

The Affordable Housing Commission, which advises the Department, has a critical role to play in the shaping of housing policy. It is the Commission’s responsibility to oversee all city housing programs, including CRA, Housing Authority and the new Department so that there will be a consistent citywide housing policy.

Equally significant, the head of the Planning Department, the Community Redevelopment Agency, the Department of Building and Safety, and the Mayor’s office are required to sit on the Commission and to make monthly reports on all activities of their respective departments which affect affordable housing in the City of L.A.

Put bluntly, unless and until the land use decisions of this city are made to conform with the affordable housing needs of its residents, the housing crisis can only deepen. That’s the reason it is critical that the other departments have an institutional relationship with the new Commission and why that relationship is required by law.

Resource Generation and Allocation

According to the Blue Ribbon Committee, the city’s housing resources, concentrated in the Housing Authority, CRA and the new Housing Department, would have to increase by 300% just to keep up with the present demand for affordable housing.

Recently the Mayor has aggressively addressed these resource needs. He helped author and navigate through City Council a $100 million bond initiative which will provide nonprofit housing developers with funds for the acquisition and rehabilitation of unreinforced buildings which could crumble in an earthquake and for apartment units subject to expiration of federal subsidies, buildings that today provide over 33,000 units of affordable housing in the City of Los Angeles. The Mayor will be campaigning strongly for this bond initiative in November.

The Mayor has strongly supported the sale of city-owned land, at below market rate, to community organizations which intend to provide 316 low cost homes for first-time homeowners in South Central Los Angeles, the “Nehemiah West” program.

Finally, decisions concerning resource allocation must be made in the coming months. The Blue Ribbon Committee recognized that housing is a problem for many social and economic groups, but for the $5,000-$25,000 annual income renter it is a crisis. Potential social instability is most apt to grow out of the increasing economic isolation of low wage families and elderly persons.

While it is politically easier to address the less urgent housing issues of the middle­class renter and would-be homebuyer, our conscience, limited resources and societal health demand that we direct our priorities to the low wage worker and fixed-income elderly. The Mayor will take the lead in assuring that city resources will not be targeted for market rate housing. Instead, these resources must be concentrated on those most in need.