Support for Public Sector Housing: A Squier, Hall Forecast

Searching for a New Focus 

“The statistics are the same if not worse than four years ago," said Squier. “The annual need for housing is 26,000 units. The annual growth is 12,000 units. That's an unmet need of 14,000 units. In the past, we put a lot of money into affordable housing. But it costs a lot to build low income housing. The state and federal money doesn't exist anymore. So we are asking ourselves, is this the right thing to do?" Hall added, "Before, we had an overheated economy. The city was trying to chill development in certain spots and we were looking at linkage and rationing permits because there wasn't enough sewer capacity. That's all now dead." 

But if the recession has caused public funding to dry up, it's also creating new opportunities. "The brakes are on in terms of new construction," said Squier. "With the recession, it's a new market. There are high vacancy rates in some parts of the city." The public sector is shifting gears away from building new units to acquiring and rehabilitating existing, empty units. "Now the key is to buy low and sell high," Hall said. ''There are tremendous bargains in existing units. For instance, our strategy in Hollywood emphasizes picking up dilapidated buildings that have great blight-creating potential. In addition, predicted John Maguire, head of the CRA's housing department, "We'll see more mixed-use and mixed income developments because this cuts the subsidies needed." 

Emphasis on Cost-per-Unit 

Besides the economy, another new factor is Richard Riordan's election as mayor. So far, he's given few clues as to which direction his housing policy will take. Given his business background, he'll likely keep an eye on cost-per-unit. "Riordan was asking why it costs so much to rehabilitate units," one of the UDAC members explained. "He thought it should cost between $5000 and $7000." Architect/planner Cliff Allen argued that, in his experience, building housing with the private sector is much cheaper than with the public sector. While others countered that public agencies insist on more amenities (like community rooms and child care) which aid in community building, Allen's contention would certainty bolster Riordan's tendencies to rely on the private sector whenever possible. 

A New CRA Mission 

The new mayor may also favor finding ways to streamline departments. “The Riordan administration, the new CRA board members and the city council are going to look at redirecting our budget," said Hall. "The priority is getting more jobs. The emphasis will shift from housing expenditures to job-creating expenditures. Four years ago, we were spending 40 percent of our budget on housing; now it's up to 52 percent. There was a political consensus that that was a good idea. One of the things people liked about the CRA, even when it was in a political hot spot, was that it spent money on housing." With the CRA's role as the city's economic development arm, that may change drastically. 

The CRA may change even more if its housing functions are consolidated with the Housing Department. "Because these are turf battles - the essence of City Hall - probably more time will be spent talking about this than about how to actually solve housing problems," complained Hall, who argued against any merger. "At the Housing Department, Gary has people who are used to doing federally funded projects, with lots of hoops to jump through. That has a cost in terms of limiting vision. For all its political problems (allegations of arrogance, no checks or balances), the CRA has had the ability to be creative because it has its own locally generated money." 

Squier countered that "the real assessment is whether the CRA is going to live or die, and whether or not it will become the city's economic development arm. Then we have to ask if the CRA having a housing department [in that context] is a plus or minus. Another question is whether the CRA will have any money for housing" since its budget has been going down over the years. 

Labor's Role 

The one thing that will surely change under the Riordan administration is the mayors' office's relationship with organized labor. "Before, the head of the CRA board was a major union official [Jim Wood, now the head of the L.A. County Federation of Labor who came up through the carpenters' union]. A lot was driven by the Bradley administration's loyalty to unions," said Hall. "I've talked to the new mayor, and he's not at all driven by those kinds of priorities." Indeed, said Hall, Riordan ''was concerned about the unions and why we had to pay prevailing wages [on CRA projects]. He may want to open that as an issue." And independent of any action Riordan may take, the housing agencies' new direction will also affect labor. After all, rehabilitating housing, as opposed to build­ing new housing, doesn't create many jobs for union members. 

Housing as Social Policy 

Squier and Hall, as well as others, made it clear that housing strategies had to address L.A.' s larger social problems. For instance, David Kramer of the Skid Row Development Corporation pointed out that after the state and county cut General Relief payments, many single room occupancy clients could no longer afford the rents-leaving rooms vacant. "After the riots, we looked at South Central," said Squier. "The problems were loss of jobs, crime, drugs and low owner occupancy in single family neighborhoods. There were whole streets with absentee owners. And there was a phenomenon I did not anticipate: pockets of neighborhoods in horrible condition: couches in the street, high vacancy rates side by side with overcrowding. And these pockets are everywhere, in Van Nuys, Canoga Park, South Central, El Sereno." But even as Squier decried the conditions, he did acknowledge that they did offer opportunities for creative solutions that would otherwise not be seen under the rubric of "housing." ''One solution is organizing tenants," said Squier. "And pending mayoral approval, we're reallocating staff to do slum-busting with the City Attorney's office. There also needs to be legislation on bad landlords and on the hard money lenders. We are working with the good lenders.” One participant saw all this as a sign of the city's emerging maturity. ''We have never had slums in L.A.,'' said architecture critic Leon Whiteson. "Perhaps that is making us grow up as a city." 

The evening ended with a plea to keep those larger social factors in mind as housing policy shifts. ''We have to be aware of the continuum between 'units' and neighborhoods," said Bob Harris, former dean of the USC School of Architecture. "Something like the 'cost per unit' is tangible and easy to think about. But rehabilitation reinvests in existing neighborhoods. Our job is to focus on the matter of community building.”