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Housing Costs Point Up the Need for a Policy

To no one’s real surprise, statistics released several days ago show that housing prices in Orange County are among the highest and fastest rising the nation.

The average selling price of a new home in the county in September (determined by a title company’s 4-week spot survey), was $372,850, an increase of 61.5% over the average price a year ago. And for the second consecutive quarter, the county was the nation’s most expensive and also the quickest appreciating area for the resale of single-family homes. The median selling price for these in the county is $226,200. The nationwide median is $90,200.

Home prices leveled off somewhat in October, but with the county’s housing supply so far behind the demand, economists and housing specialists believe that, despite an occasional dip, home prices will continue to increase. More people will be priced out of the market. Only 16% of the families living in the county can afford to buy an existing home.

One alternative for people who are unable to buy in such an overheated housing market is to rent. That is the trend in Orange County. An estimated 42% of county residents now live in apartments. The proportion is expected to climb past the 50% mark by the turn of the century.

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But in Orange County, even apartment rentals do not provide affordable housing, as they do elsewhere. Although there has been a ready market for low-income housing in the county for years, builders have not responded with enough apartments or single-family homes.

High land and construction costs and some of the heaviest government-imposed developer fees in the nation for roads, schools, sewers and other services are among the reasons that builders have not constructed more affordable housing here.

So is the lack of resolve of some residents and local governing bodies. They view renters as transients with no roots. They dislike apartments and have not set aside enough areas for them or pushed for their construction.

In a Times interview several days ago, William H. Kraus, executive vice president of the Apartment Assn. of Orange County, presented a grim outlook. He said there will have to be some kind of federal underwriting of rents because counties and cities cannot afford to do it. “The private investor cannot build housing today with the kind of rents that would make it affordable to the poor,” Kraus said.

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And so Orange County’s affordable-housing program seems to be pointing people toward the county line and onto jammed freeways, making them commuters from their jobs here to living quarters they can afford in neighboring Riverside, San Bernardino, Los Angeles and San Diego counties.

That is not acceptable public policy from a social or an economic standpoint. A serious imbalance now exists between jobs and housing. The approval of more industry and commercial buildings without the construction of affordable housing for the workers only makes matters worse.

As commuting increases and with it resulting traffic, pollution, absenteeism and tardiness--more workers will seek jobs closer to home. More companies will locate, relocate or expand to those areas to cut costs and be closer to the labor pool. That is already starting to happen.

And residents are becoming increasingly unhappy, not only about traffic but also about their children who grew up in Orange County being forced to live elsewhere as adults because they cannot afford the housing here.

A Times poll taken last summer showed that most residents now strongly support rent controls and government intervention to require developers to build affordable housing.

Builders and local governments cannot continue to ignore local attitudes and the problems that so rightfully disturb so many residents. There is much that local governments can, and should, be doing.

Five years ago the County Board of Supervisors began phasing out a mandatory affordable housing program that required builders to set aside 25% of all units for lower-income residents. We, too, would like to see the marketplace respond to the demand. If it fails to do so, however, government must step in and, where necessary, prod the private sector into doing what must be done.

City and county land-use plans must ease restrictions and zone more land for apartment construction. They must allow mixed uses in industrial and commercial areas and adopt more realistic density regulations to allow for smaller apartments and attached single-family homes.

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Low-interest loans that help people get into rental units can also be provided at no cost to the community. Realistic income standards must be adopted, and temporary shelters could help people who need the time to save money to rent an apartment.

If the private sector does not respond, local government can require some affordable housing to be part of any new residential project.

Providing more housing and reducing freeway congestion are two of Orange County’s most urgent goals. Progress can be made toward both by building more lower-cost housing.


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