Support for New Housing Concept

The Reagan Administration has all but abandoned housing for poor people. Federal funds have been cut by 70%. Government support is all but unavailable except in the form of a tax credit that encourages private corporations to invest in low-income housing. Few businesses have taken advantage of the credit, but four California corporations have just put up $1 million apiece to build or renovate housing for poor families and homeless people.

Atlantic Richfield Co., First Interstate Bank of California, Great Western Financial Corp. and Transamerica Occidental Life Insurance Co. have taken the lead. Their investment will mean 377 apartments and single-occupancy rooms.

Los Angeles Mayor Tom Bradley strongly backs the concept, and is asking area business leaders to invest $20 million for housing. The city’s Community Redevelopment Agency and Community Development Department will also invest $5.4 million. Loans will keep the rents low, about $300 fora small apartment, and affordable for very poor families who live on the minimum wage--less than $9,000 a year.

The corporations will invest in the National Equity Fund--set up by a nonprofit outfit called the Local Initiatives Support Corp, a group that successfully promotes housing and rehabilitation projects in 30 cities. Projects in the Los Angeles area will include apartments or single-occupancy rooms in the Pico-Union district near downtown, in El Sereno on the Eastside, in West Hollywood, in Echo Park, on Skid Row and in South-Central Los Angeles. Three projects are planned in the San Francisco area, where low-rent housing is also very scarce.

The private corporations will gain more than gratitude and good will for their dollars. This is not charity. The 1986 Tax Reform Act rewards the investment with a federal tax credit. The state provides a similar, though smaller, credit. With the aggressive backing of respected and astute business leaders like Robert B. Wycoff, the president of Arco, the worthwhile incentives ought to prove more popular. The need is certainly great.

Nearly 400,000 men, women and children live in inadequate housing or without housing in Southern California. They can no longer count on the federal government. In that atmosphere, greater private investment is the best hope for poor people desperately in search of a decent place to call home.