The missing rung
The gap in the market is starter-homes, not apartments
Hey, Peter, whatever else you and I may disagree on, I think we can both agree that there is indeed a housing crisis in Los Angeles that affects all kinds of people. And I hope we can agree that the crisis is all about the lack of afforable homes for the city's service-sector workers, naturalized citizens and young creatives. (I don't think L.A.'s rental market is in crisis -- I simply think we have too high a percentage of rental units to home units.) To me, it's prospective south-of-median homebuyers who most feel that there's a housing crisis in L.A. The crisis exists for the people who by the measure of the past couple of generations should be able to afford a starter home here in the city, but can't.
I also don't think that the city is in crisis because of its population growth. The city of L.A.'s population grows by about 40,000 a year, the county over double that. I'm not sure that growth in units is as inelastic as the economists say (we produce nearly a unit per every two new people per year), but the growth in units is indeed very selective with regards to who it produces new units for. And that's where the crisis exists.
L.A. remains an exciting city culturally, and it's certainly a great place to come for three very different kinds of people: documented immigrants, aspiring creatives and the well-to-do. The well-to-do are fine, but the market is not building homes for the "workforce housing" service sector. Immigrants and creatives arrive and after five or 10 years only small percentages are positioned to purchase a house. Here's the thing that slams everyone other than the well-to-do: the housing market in Los Angeles mostly works to serve only the affluent and double-income professionals, because the returns to the builder and the contractor are so much more promising than they are for building starter homes. There are "missing rungs" on the housing ladder, and the missing rungs are all south of the median.
To me, the missing rungs are what constitute the real crisis. For immigrants and aspiring artists, service-sector personnel and the others who come to L.A. to achieve something, all are becoming increasingly less likely to climb any kind of a housing "ladder" over the course of their Angeleno lives, because so many rungs on the ladder are missing. Properties on the market are either significantly spendy or significantly distressed, and there is little to choose in between.
The mayor and City Council certainly talk quite a bit about taking steps to make housing more affordable. They are mostly on the same page: they all say L.A. needs more affordable housing. Unfortunately, their primary solution is to offer a costly, development-oriented construction program that does more for the construction and development communities than it could possibly do to fix the housing crisis. Their solution is to make those who already have lived here for years pay for building mere fragments of missing rungs that will service very few people. They don't seem interested to incentivize the market for the kind of housing we most need; instead, they seem more interested in punishing both market and taxpayer in bringing housing to the city that serves mere fractions of populations.
I always marvel, Peter, when I attend an architecture show like Ca-Boom here in L.A. There are all these solutions available for entry-level housing: there are pre-fab houses that can be built for $200,000 and even micro-housing for $100,000 or even less. Factoring in lots and hookups, certainly houses that enable dignified living for a price in the $200,000-325,000 range -- the most pronounced missing rung -- are possible. These are often precisely the kinds of units that both our artisan and immigrant classes find desirable; interest is always very high at the shows; they, more than any other kind of housing I see, are poised to become the rungs on the housing ladder.
Alas for us, spec developers are building the kind of housing we need least: the spendy, north-of-median kind. Not enough are building the kind of housing we need most. The city needs to figure out ways to incentivize developers to do that. Until it does, lower-tier housing will remain in crisis.
Joseph Mailander is a writer and lecturer on architecture and urbanism who often nags the city of Los Angeles about housing issues. He edits the blog MartiniRepublic.com, which features a special category on architecture and urbanist issues, martinirepublic.com/la+u.
Solve the housing crisis
The housing crisisa shortage of affordable homes for sale and for rentis not confined to Los Angeles. It is a national crisis. And its cause is political, not economic. As a nation we have the resources, the technology, and the know-how to solve the housing crisis. What we lack is the political will.
In Los Angeles, where the crisis has reached epidemic proportions, there's a growing political movement for housing reform. Leading the charge is Housing LA, a broad coalition of labor unions, community groups, tenant organizations, and others. This coalition is sponsoring a "Tent City" rally in front of City Hall this Thursday and a march to City Hall on April 25. But it isn't only grassroots groups that are concerned about this problem. Elise Buik, CEO of the United Way of Greater Los Angeles, says that she hears over and over from CEOs and business leaders in L.A. that they are having increasing difficulties recruiting and maintaining staff because of the lack of affordable housing. So the shortage of housing not only hurts the poor and the middle class, it also harms our business climate.
Here is how Livable Places, a nonprofit organization that is part of the Housing LA coalition, describes the area's housing crisis: