Professionals at Home in Subsidized Housing

It never dawned on Holly and Paul Woolson, both college-trained anthropologists, that they might qualify for subsidized housing when they started saving for a home several years ago.

But in March, the couple and their two young children moved into a two-story, $179,000 house near Ojai’s downtown -- a home worth at least twice that much.

It’s one of 25 single-family homes on two acres occupied by a cross-section of middle-class California -- a coffee-shop owner, an office manager, a health-food clerk, two post office staffers. All qualified as low-income for the subdivision.

To their surprise, the Woolsons easily qualified under the project’s $56,500 annual wage cap for a family of four.

“These are businesspeople,” Holly Woolson, a part-time instructor at Oxnard College, said of her new neighbors. “And I’m not sure most people think of that when they think of low-income housing.”

With rents and home prices soaring throughout California, experts say the demand for affordable housing has never been greater, government support has never been higher and neighbors have never been more willing to accept such projects.

That is partly because those who need subsidized housing now are not only the poor and the elderly, but also professionals -- teachers, nurses, ministers, social workers, police officers.

“In the last couple of years, this whole housing crisis has deepened and widened,” said developer Rodney Fernandez, who built the Woolsons’ project. “The middle class is really feeling the pinch. And public officials are aware of that.”

Fernandez spent the last two decades beating the bushes for any opportunity to build homes poor people could afford, providing shelter for lemon pickers, maintenance workers and other laborers.

But if the 1980s and ‘90s were difficult times for advocates of low-cost housing, these days may be the best.

Fernandez has 932 affordable dwellings in 22 projects in the pipeline for the next three years -- more than matching the production of his nonprofit Cabrillo Economic Development Corp. in the last two decades.

The story is the same throughout Southern California and much of the rest of the state, experts said.

“Affordable housing has become a mainstream, popular issue because firefighters and police officers and city hall workers are priced out of the market,” said Sam Mistrano, deputy director of the Southern California Assn. of Non-Profit Housing in Los Angeles.

The 156 developers in his five-county group had about 8,500 dwellings under construction in 2002, about 14% of all the units they had produced since 1986, Mistrano said. Last year, those nonprofit builders accounted for about one-seventh of the 68,000 new dwellings in the region.

“There is more funding, and there is momentum,” Mistrano said. “The housing crisis is hitting the middle class where they live.”

The price of a typical house in Los Angeles now exceeds $300,000, and the average monthly rent is more than $1,300, the second highest for an urban area in the western United States, a RealFacts survey reported this month. The state’s housing crisis -- the result of years of limited supply and surging demand -- has also created a powerful lobbying force that has gained the ear of state and local governments.

In Los Angeles, which at 39% has one of the nation’s lowest home ownership rates, the mayor and City Council last year created a $100-million affordable housing trust fund.

Previously, a manufacturers’ group in Silicon Valley created a trust fund that has raised more than $22 million in support of affordable housing, and wine producers in Napa Valley have begun taxing themselves to help supply housing for migrant farm workers.

In November, California voters approved a $2.1-billion bond issue for affordable housing, even after three years of historically high state spending on such projects.

Throughout the state, more than 100 cities and counties now back local laws that require home builders to set aside a percentage of dwellings in new projects for low- or moderate-income families. That is up from 64 jurisdictions nine years ago. The Los Angeles City Council also is considering such an “inclusionary housing” ordinance.

These moves reflect a dramatic change from the days when low-income housing projects were stereotyped as “places for bad people and crime,” and most communities wanted no part of them, developer Fernandez said.

The tone of the affordable housing debate has changed so much that even the vocabulary has evolved, said Peter Detwiler, chief consultant for the state Senate Local Government Committee.

“Folks now are using the term ‘work force housing’ instead of ‘affordable housing,’ ” Detwiler said. “Just like ‘affordable housing’ replaced ‘low-income housing,’ which replaced the word ‘slum.’ ”

Even business interests that oppose “inclusionary housing” laws, saying they shift costs to higher-income buyers and can discourage developers, acknowledge that they see a gradual change in the way affordable housing projects are perceived.

“It makes a difference when the Silicon Valley talks on the front pages three or four times a week about the affordable housing problem,” said Tim Coyle, spokesman for the California Building Industry Assn. “Then you begin to see changes.” Attorney Marc Brown, a veteran lobbyist for affordable housing, said that in recent years a broad coalition, including labor, construction, real estate and social service interests, has backed changes in state law to prompt cities to allow more affordable housing.

Last year, the Legislature passed a law allowing “granny flats” as second dwellings on lots zoned for single-family homes.

It also approved a measure requiring cities to follow their own housing master plans when approving new projects, instead of sharply reducing housing density to suit community critics.

Daniel Carrigg, a lobbyist for the League of California Cities, said the problem wasn’t the will of city officials but the traditional lack of government funding and the reluctance of real estate developers to construct apartment houses since federal tax breaks were withdrawn in 1986. At that time, about half of California’s new dwellings were apartments; now they make up about 26%.

Most subsidized housing projects still are high-density rentals, although more single-family subdivisions like the Woolsons’ are being constructed.

That may be partly because some for-profit private developers have jumped into the subsidized market as more government money has become available and land for new developments on the urban fringe has dwindled.

“Clearly, there’s a lot of attention focused on affordable housing, and local officials recognize the problem,” Carrigg said. “The question is: Where are the resources going to come from to address it?”

For the last four years, part of the answer has been beefed-up state housing budgets, the Proposition 46 housing bond and an increasing flow of federal tax credits to developers who construct affordable projects.

The California Tax Credit Allocation Committee, which awards federal and state tax breaks, has funded more than 18,000 affordable dwellings since 2000 -- about 21% of all the units it has underwritten in the last 16 years. California’s share of that program has increased in three years from $35 million annually to $70 million.

The state also boosted general fund spending for affordable housing by $500 million for the same period, helping produce nearly 32,000 new affordable units, mostly for low- and very low-income families.

“That’s a record level for us,” said Judy Nevis, deputy director of the state Department of Housing and Community Development. And that isn’t counting about 130,000 dwellings that last year’s bond will help pay for, she said.

“I think the public at large, and certainly this administration, has become convinced that an adequate supply of housing, particularly affordable housing, is part of our economic engine,” she said. “Employers have increasingly stepped up to the plate to say, ‘Look, I’ve got to have housing for my workers.’ ”

Cities are also loosening their purse strings. In Los Angeles, $43 million of last year’s $100-million trust fund commitment is available to builders.

Los Angeles needs a minimum of 8,000 to 10,000 new dwellings a year, said City Councilman Antonio Villaraigosa, who advocates an “inclusionary housing” ordinance. But it’s providing only about 1,000 for low- and moderate-income households.

“It’s a drop in the bucket in terms of need,” he said.

Housing affordability is a problem that can’t be solved just by government programs, said Coyle, the building industry spokesman. California needs construction to match its annual growth of 600,000 residents. Last year, just 167,000 dwellings were built, a shortfall of 63,000, he said.

“Teachers and firefighters and nurses are not looking for subsidies,” Coyle said. “They’re just looking to get into a subdivision that they can afford.”

That was true for the Woolsons, who were saving for a down payment on a $120,000 cottage only to see its price balloon to $350,000 in five years. Then they discovered they qualified for subsidized housing because of their income, good credit rating and the fact that they already lived in Ojai.

In general, federal income guidelines are used to determine who qualifies for subsidized housing. A sliding scale is used, measuring household size and income relative to the county median -- the point at which half the households earn more and half earn less.

In most California counties, a family of four like the Woolsons may make 120% of the county median and still qualify for moderate-income housing. For a low-income project, they may make up to 80% of the county median, while for a very-low income project they may earn up to 50% of the county median.

“We had no idea we could qualify,” Holly Woolson said. “We feel like we’ve hit the lottery.”