The Cruel Path of Legislating Affordable Housing - Pt 1

Most permits for multiple-unit housing have been obtained with a condition to set aside a set number or percentage as "affordable" or rent restricted. A recent and large example is the 1.68 million square foot General Hospital conversion to a multi-use project of which of 885 residential units at least 30% will be affordable.

Since 2020 L.A. legislators have addressed housing costs & shortages with convoluted results:

• Restrictions for eviction and rent increases:
  • Suggested a short-term fix would subdue the effects of increased costs of rental housing.
  • Bought more time as a backlog of housing assistance fund recipients were vetted but it...
  • Ballooned the amount of back rent accumulated - as extensions were given away beyond the federal shutdown in 2020 even into 2023.
  • Undermine the future and stability of new untethered construction.
  • Undermine agreements to set aside "affordable units" as part of expediting or even permitting construction when no mention is made the entire project would/could be subject to future restrictions of rent increases and even eviction for failure to fulfill contractual obligations.
    

As an example:

• The United to House L.A. Emergency Renters Assistance Program is possibly a planned disaster, designed to force a State or Federal financial rescue
  
  • Has $30.4 million for rental relief of which only 25% has been distributed
  • Accepted applications ONLY September and October 2023
  • 3,200 residents have been approved 
  • Provides up to six months of unpaid rent for accepted applicants.
  • Only 25% of the $30.4 million allocated for rental assistance has been distributed.
  •  $472 million in claims from applicants, nearly $454 million more than the total available.

Meanwhile, L.A. City outsourced a study to the University of Pennsylvania!

• Two surveys were conducted in July 2023 – one of tenants and the other of landlords – to measure the magnitude of rent arrears and how it is distributed among the city’s renters.
• As of August 1, 2023, approximately 100,000 to 155,000 Los Angeles households were behind on rent. Half of these households were three or fewer months behind. However, surprisingly, more than ten percent of tenant survey respondents who said they were behind on rent indicated they were more than a year behind.
• Out of the 100,000 to 155,000 households that are behind on rent, we estimate that roughly 60% may not be able to pay their accumulated rental arrears by February 1, 2024,
  
• Half of all landlords reported they have units behind on rent, and most reported they are feeling financially squeezed. 
• 70% of landlords reported problems paying for repairs and maintenance, 
• Roughly half of landlords indicated they are having problems paying property taxes, utility payments and/or mortgages payments.
• 71% of large (50+ units) landlords intend to evict, compared to just 39% of small landlords (1-4 units) and 40% of medium size landlords (5-50 units).

2023 L.A. County Housing Report suggests:

• Renters in Los Angeles County need to earn $47.15 per hour - 2.9 times the City of Los Angeles' minimum wage to afford the average monthly asking rent of $2,452 according to a 2023 L.A. City Report
• 521,596 low-income renter households in L.A. County do not have access to an affordable home
  • Which is roughly 5% of the population!
  • Which would suggest the touted figure of 75,000 homeless in Los Angeles could actually swell!
  • In 2022 in Los Angeles County, there were only 39,680 beds available in the interim and permanent housing supply for persons experiencing homelessness.
• Solving California's affordable housing crisis requires a long-term, comprehensive, evidence-based set of policy solutions at scale, similar to those described in the Roadmap Home 2030 from the State of California. (However, there is no explanation of how this can be funded without raising taxes)
  
  • CREATE 1.2 MILLION NEW AFFORDABLE HOMES for low-income Californians and those experiencing homelessness, including 
    • 530,000 for extremely low-income households
    • 257,000 for very low-income households
    • 407,000 for low-income households.
      

However, little discussion is presented on how subsidized housing will be financed.  One hint is to "restructure tax and finance systems to rectify structural discrimination and generate revenue to meet the scale of the need."  Which is contrary to the suggestions of French economist Frederic Bastiat who coined the term for such legislative actions as "legal plunder".

The 1977 CA Legislation noted:

"A healthy housing market is necessary both to achieve a healthy state economy and to avoid an unacceptable level of unemployment. "

However, going back to the General Hospital project; a small contingency is laying the groundwork, by power of the press and suggestion, for an increase from 30% affordable housing to 80% within the project!  

“As an organizer of tenants, I also see the need for affordable housing and we don’t want just 30% we want 80% because our community needs it,” said Eva Garcia, an organizer with the nonprofit Community Power Collective based on the Eastside of Los Angeles. LA County chooses developer to turn iconic General Hospital into housing, retail – Daily News

Part 2 - Unwraps the State of California response 1977 to now.   CA Health & Safety Code - Division 31 Chapter 1 - 5001   (d) A healthy housing market is necessary both to achieve a healthy state economy and to avoid an unacceptable level of unemployment. 

In 2022, the Plan to House LA was certified by the State, putting into effect a bold new proposal that increases access to housing and strengthens renter protections to combat Los Angeles’s housing crisis. What_Does_the_Plan_Do.pdf (lacity.gov)

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