Affordable Housing: TPR Exit Interview—LAHD’s Gary Squier

As the first and only general manager of the City of L.A.'s housing department, why don't you comment on why LAHD is still needed, if it is, and why reorganization into a larger entity under Economic Development would be an unwise choice for the Mayor and Council to make? 

A Housing Department is still needed in Los Angeles. The condition of our housing and neighborhoods is worse than it has been in the past. And with so many needs crying out for political attention and resources, if housing were collapsed into a larger organization, it would lose its singular voice with Council and the Mayor. I fear that with consolidation, the advocacy that has been the hallmark of the Housing Department will be turned to mush. Housing would become just another bullet on a page of issues for a harried Economic Development General Manager who is trying to deal with 1,200 employees and hundreds of separate projects. 

When you deal with such basic needs as housing, you must have a very focused approach, especially within our City's very diffuse organizational structure. 

Some have said unless a Mayor and Council are interested—seriously interested—in housing and a housing policy, public investment in housing will suffer no matter the structure. Conversely, if an administration, Mayor and Council, are interested, any structure will do. How do you respond? 

You are starting from the premise that policy can be developed in the absence of a structure. But it's that structure that provides the focus, the intelligence and the understanding necessary to build a rational policy and to continually amend and improve it to address a changing environment. 

To say that we need to come up with a policy first—in the absence of an institution whose responsibility is to understand the housing issue—says that you've already made a decision that housing is not a factor in Los Angeles. 

The City's Chief Legislative Analyst, Ron Deaton, made the following recommendation regarding LAHD's future: "To address the diffuse, disjointed array of programs, [I recommend] the creation of an Economic Development Department that would include the current portfolios of the CRA, as well as the City's Housing and Community Development Departments and the Mayor's Office of Economic Development." Your thoughts? 

Deaton's proposal would create a bureaucratic monster, not rationalize the programs. Building bigger and bigger bureaucracies is a poor substitute for thoughtful planning. The City should start with considered discussion about what the issues and resources are, develop a plan of action, and then designate a bureaucratic structure to best implement the plan. Deaton's proposal is simple and might look good on paper, but it's not very thoughtful. 

So you would preserve the status quo? 

No. You've got to look at the functions that affect neighborhood safety and housing quality and consolidate them. I would propose that you look at the Building & Safety Department's enforcement function and do as many cities have done: Divorce it from Building & Safety and fold it into Housing. A number of cities have made such a distinction between new construction and building permit issuance and the enforcement of building codes. That is a consolidation I would support. 

I definitely wouldn't advocate keeping status quo at all. Right now decisions are made on a project by project basis—completely incrementally, based on various agencies appealing to the interest of individual Council people instead of appealing to the interests of the entire City. 

Under the current system, department managers survive by initiating projects in each Council district that keep the interest of that Council person. That's the way it works in Los Angeles. It isn't thoughtful, and doesn't genuinely deal with economic development or housing issues as a whole. 

What governmental structural reform would remove the politics? 

I'm not sure anything would remove the politics. The City has developed such a highly refined pork barrel system for selling particular projects; to individual Council people without any conscious regard for the bigger picture that any strategic initiative or planning has gone by the wayside.

That wasn't always the case, though. I've been around long enough to recall a Council-Mayor system that had at least some thoughtfulness about what should be accomplished for the City as a whole, and for its overall economic development.

And there are members of the Council and people in the Mayor's office that, if they took a deep breath, would agree that we should develop a strategic planning function—to take an assessment of what's going on in the City on an array of issues and then think comprehensively about addressing those issues as part of a larger strategy.

What has been the barrier to that happening? 

Competition, for one thing. As the budget battles have gotten nastier and nastier and as agencies have been fighting for their lives and the jobs of their employees, it has become more and more difficult to seriously sit down and convince fellow agency heads to think comprehensively. 

At the same time, the majority of the planning that goes on in the Mayor's office is not based on what makes sense for the City, but on the necessity of coming up with a budget that gets eight votes. 

What do you expect to happen in the months ahead regarding LAHD, the General Manager position and consolidation? 

First is the appointment of an interim General Manager. The fact that the Mayor took considerable time to identify that person shows that he considers it an important appointment. It is an important post, first, because of the huge volume of activity conducted by the Housing Department. 

Secondly, we are in a period of retooling our thinking about housing policy. And that change requires a strong leader, even in an interim position. Realistically, I don't think you will see a permanent General Manager being appointed and in place for close to a year. 

Why not? 

The history of the City has shown that it takes a long time. There are close to a dozen General Manager slots open now. The process of identifying the search firm, putting together the criteria, building consensus around the type of person you are looking for and then doing a national search takes time. I don't know that it has ever occurred in less than six months. For this job it will probably take closer to a year. 

You said in our January roundtable discussion on affordable housing: "The few dollars we have to invest in housing subsidies become wasted in a market where the housing quality has been allowed to decline and where properties have been over leveraged. You have a double whammy of a housing stock that is expensive and needs major rehabilitation investment at the same time." Can you elaborate with six month's hindsight to guide you? 

Los Angeles has an unusually hard problem: while much of its housing is in terrible condition, it is also very costly. This is a by-product of the City's failure to enforce its building and safety standards adequately. Property owners can rent apartments in substandard condition at relatively high rents. These apartments are subsequently refinanced or sold based on those high rents, and high value and low quality are then built into the economics of a building.

Housing policy has to come to grips with this fact. Sometimes the owners can't afford to hold onto their buildings and make the necessary improvements. But somehow there needs to be a shakeout in the L.A. market. However it is accomplished, owners that can't afford improvements must leave the market and lenders must write down price on foreclosure. This process would accelerate if Los Angeles required code compliance before resale. We have to improve substandard apartments and start from a baseline of decent housing at a decent price. You can throw as many public dollars as you want at the housing situation and it will not make a dent until you get rid of the contradiction between quality and rental price.

In May of 1996, following the welfare cuts, Andy Robeson said "Actually the worst is yet to come. The California Legislature has passed legislation signed by our Governor that enables counties to limit general relief to only three months out of any twelve. If that happens, you are going to have permanent housing with general relief clients as tenants that can't survive." What are your thoughts and reactions to what has happened to single room occupancy hotels (SROs) and public housing since the welfare cuts? 

The full impact has not yet been felt because implementation has only begun. From a housing policy standpoint, it is important to predict how it is going to impact the quality of the housing stock. Clearly, there is going to be substantial change in the ability of persons on general relief and Aid to Families with Dependent Children (AFDC) to pay rent al the current levels. And that's going to affect the stratum of housing marketed to these individuals.

The first hit is going to be in general relief. And it will be felt most strongly by single room occupancy hotels, which have already gone through a substantial shock.

As for persons receiving AFDC, one theory is that they will simply go out and get jobs. That may happen, but I have concerns that it won't. If they do suffer substantial reductions in their incomes, they will have to leave their apartments and double up with others. You will have—at least at this stratum of the housing market-greater overcrowding and higher vacancies. 

Six months ago you said: "I'm afraid that there is a huge change at the federal, State and local levels in commitment to money for new housing. The capital is just not going to be there. We can wring our hands about it or we can stop the bleeding and the loss of units that we do have." Could you elaborate on what you meant and what the agenda must and will most likely be for your successor? 

The units we are losing are being lost to gangs, drugs and violence. As safety declines, the people that would otherwise care about our neighborhoods move out. Property owners can then no longer realize a decent return, and properties start to decline. 

This all stems from a couple of fundamental issues. One is safety. Another is compliance with building codes. As soon as we let go of neighborhoods and say we aren't going to enforce the building codes, the housing stock in those neighborhoods becomes lost as well. We need not simply invest in affordable housing projects but start to be smarter about allocating public safety resources and administering our code enforcement activities. We must keep whole neighborhoods from going over the edge.

What are the benefits and legacies of your long and distinguished tenure as a General Manager of the City’s housing department?

I've always worked to figure out where the problems are and what their solutions could be. I've also been lucky enough to work with a group of people driven to implement those solutions. We have been able to clearly see and articulate what has been going on in the housing markets.

And the legacy? We did a lot of units. We financed about 25,000 thousand while I was there—that's a about $2 billion in total project value. I'm equally proud of our neighborhood recovery program, which has been working to find the key components to breathing new life into distressed neighborhoods.

The lessons learned at LAHD are starting to have an impact with other agencies in the City.

What are those lessons?

First of all, security is the most critical issue in any neighborhood. Until people feel safe and kids can walk freely on their sidewalks, you're not going to be able to make substantial improvements on a neighborhood-wide basis.

Another lesson is that the City can focus resources intelligently in neighborhoods without spending a lot of money. We've seen it happen in places like Yucca corridor and the ghost towns left by the Northridge Earthquake. Layering multiple City resources in an intelligent way, coupled with real community dialogue can turn a neighborhood around.

What issues that the public and the civic leadership pay too little attention to ought to be higher on the public policy agenda? 

Building code enforcement is starting to surface higher on the agenda. An honest appraisal of effective community-based policing, as opposed to a rhetorical endorsement of generic community-based policing, is also important. Another issue is how to come up with a simple way of coordinating City resources in a neighborhood. The Mayor has launched a targeted neighborhood initiative which may help in this effort. 

I've learned throughout my tenure that less process is much better for getting things done. The City and the Housing Department should pay more attention to intervening in neighborhoods with a light touch and being more intelligent about where they devote their time and energy.

Any departing words of advice for your successor?

The job has four or five key components. You have to be an advocate. You have to be a manager. You have to deal with the politics. You have to be a good technician. And you've got to try to be a visionary. And all five of those balls have to stay in the air to get the job done.