CRA’s New Budget Will Put Pinch on Housing

A substantial reduction in housing funds that would result in dramatically reduced construction in some of Los Angeles’ worst slum areas was proposed Monday in the city’s Community Redevelopment Agency budget for next year.

The $352.2-million spending program for the fiscal year beginning July 1, 1988, is $67 million more than for the current year. But agency administrator John Tuite said much of that increase comes from proceeds of $70 million in bonds that must be used to finance the remodeling of the downtown Central Library.

Another $32 million in the budget, he said, is to repay a loan from the city that financed current projects, including some housing. Thus, he said, there will be less operating money next year.

Down by $17 Million

As a result, Tuite said, the CRA staff, faced with less operating funds, had to reduce the housing allocation for 1988-89 by $17 million.

Still, he said, construction of new housing and rehabilitation of old units remains “the agency’s top priority.”

The CRA budget will go to Los Angeles Mayor Tom Bradley, who will include it in the overall city spending plan he submits to the City Council.

Asked why the current year’s housing appropriation was higher than next year’s, Tuite said that in 1987-88, the agency had considerable money to spend from the sale of housing bonds. A change in the tax laws, removing the tax-exempt status of such bonds, wiped out that source of funding, he said.

In general, money for new housing comes from increased tax revenues generated by commercially successful redevelopment projects, such as in downtown Los Angeles.

Two Areas Hard Hit

The budget document said two poor areas will be particularly hard hit. One is the Pico-Union II redevelopment area, in the general area of Hoover and Alvarado streets, and Adams-Normandie, running from Hobart Boulevard to the Harbor Freeway and between Adams Boulevard and the Santa Monica Freeway.

“Limited funding causes a dramatic decrease in program activities,” the budget document said of Pico-Union II, where large numbers of immigrants, including many from Central America, live in old, densely packed, crowded apartments.

The agency proposes completion of 16 low-income housing units in the area and start of construction, in cooperation with private interests, of a supermarket at Pico Boulevard and Alvarado Street.

In Adams-Normandie, the budget reported, “limited future resources require a shift in emphasis from housing and public improvements to economic development.” During the year, the agency proposes to continue rehabilitation of 40 dwelling units, construction of eight units of rental housing, a 42-unit town house condominium project, a 59-unit senior citizen rental project and a shopping center-office building. All these were financed previously.

Despite the budget reduction, the CRA will use redevelopment earnings to finance low-cost housing around the city.

Funds from downtown redevelopment, according to the budget proposal, would be used to build four family rental projects, totaling 125 units. These would be in East Los Angeles, Hollywood, South Central Los Angeles and in the San Fernando Valley. In addition, the CRA proposed building 11 units of senior citizen housing in South Central Los Angeles and in Koreatown.

Rehabilitation efforts would include earthquake safety work on 250 single-room occupancy units in Skid Row, plus projects in other parts of the city, including Boyle Heights.