Developer Fees, Housing Commission : Panel Urges Major Effort to Ease L.A. Rental Crisis

Calling the mounting rental-cost crisis in Los Angeles “so wide that it threatens to change the character of the city,” a special panel appointed by Mayor Tom Bradley urged the city Thursday to step into a role abandoned by the federal government, by tripling city expenditures on housing and immediately creating a housing commission.

Moving with uncharacteristic speed, City Council members pledged to consider several key provisions recommended by the Blue Ribbon Committee for Affordable Housing within three weeks, including the proposal to increase the low-cost housing budget to $300 million annually. Bradley praised the idea of a new city commission and other aspects of the broad plan, saying, “The need is great, our commitment is equally great.”

Potentially the most controversial proposals are ones to require large commercial developers to pay fees into a low-cost housing program, to seek state legislation to increase charges on real estate transfers and to give low priority to building permit applicants who are proposing demolition and construction that would wipe out low-cost housing.

The committee, a wide mix of housing experts, bankers, developers and poverty advocates who have worked since April to offer solutions to the housing crisis, ominously predicted that the homeless population here, already the highest per capita in the nation, could become far greater.

“If the economy falters and jobs are lost, Los Angeles will witness a sudden and dramatic increase in homelessness of working-class families,” the committee’s report said.

Sydney Irmas, a former co-owner of Price Pfister Inc., who chaired the committee, acknowledged at a City Hall press conference that “the whole committee was fearful that the council was in some way going to sweep this under the rug,” but he said he believes that a sense of urgency is instead prevailing.

If the council responds “in a reasonable time period,” the city may have a new housing commission and significant new programs could be under way by late March, Irmas said.

Rents in Los Angeles have jumped more than 100% in eight years, and the average monthly cost of a new apartment is $900.

‘Critical Missing Piece’

The committee said the city’s lack of a housing commission is “a critical missing piece in the city’s . . . complex and fragmented system” for producing low-cost rentals. The commission would review all city expenditures relating to housing before they reach the City Council, including the housing budget of the Community Redevelopment Agency, Irmas said.

In addition, any new departmental policies that might affect low-cost housing, whether from the Fire Department or the Community Development Department, would require review by the commission, just as planning-related policies now go before the city Planning Commission.

In explaining his support for the proposals, Bradley took a swipe at the Reagan Administration, saying that for the last eight years “we’ve seen a steady erosion of support for housing, affordable housing,” as federal help to cities has been cut by 78%.

“We cannot and must not wait just because the usual source, the federal government, has cut our money,” Bradley said.

Allan Heskin, a UCLA urban planning professor and outspoken critic who contends that the city has already waited too long to respond, said the mayor’s and council’s initial reaction to the report “tells me they are nibbling at the bullet but they haven’t bitten yet.”

Heskin, a member of the Blue Ribbon Committee, said he would have liked the report and recommendations to have been tougher, including a “one-for-one replacement” anytime a developer tore down a low-cost rental unit.

The group backed the mayor’s proposal for a $100-million bond ballot measure to rehabilitate brick buildings containing almost 50,000 low-rent apartments that the city has ordered strengthened against earthquakes or torn down, beginning in 1989. Already, 3,538 units have been razed by owners unwilling or unable to spend $10,000 or more per unit on rehabilitation.

It also urged City Council support for Bradley’s plan to lift court-imposed restrictions that now prevent the Community Redevelopment Agency from spending more than $750 million in property taxes on downtown redevelopment.

If the spending ceiling were lifted, Bradley has proposed diverting $2 billion in taxes to low-cost housing over the next 20 years and another $2 billion for downtown commercial development and a citywide child-care program. The hotly disputed issue of increasing downtown spending by the CRA could become a major issue in Bradley’s reelection bid next year.

The committee, which has been researching housing programs throughout the country since last spring, offered several key recommendations that borrow heavily from other cities, where innovative housing programs are under way.

Call for Partnership

The committee said Los Angeles, which has been slow to respond to the federal cuts, should create a Los Angeles Housing Partnership--a combined public and private entity, separate from city government, to provide corporate and public financing to nonprofit community groups that build housing without marking up rents.

For several years, such partnerships have successfully created low-cost housing in Boston, Chicago, New York, Miami, Santa Monica and other cities.

Although city officials, including council members John Ferraro and Robert Farrell, spoke in encouraging terms Thursday, there are no guarantees that the council will actually approve any of the recommendations.

Councilwoman Gloria Molina, the only council member on the Blue Ribbon Committee, called the proposals “wonderful recommendations” that may spark controversy, particularly provisions for charging large commercial developers a new fee to help finance affordable housing.

The fee, already being charged by many other cities undergoing development booms, could generate up to $15 million a year for low-cost housing. The committee did not delineate the size of the fee, but San Francisco and Boston, two of the biggest cities to adopt such fees, charge developers of large commercial projects $5 and more per square foot.

Rabbi Leonard Beerman, a committee member, said that by intensifying the city’s “badly lacking” lobbying efforts for federal funds and state funds the city could generate millions of dollars more each year.

Beerman called Los Angeles’ housing troubles “a stain on the conscience of the city” and warned city officials, using a quotation from the Talmud, not to ignore the pressing needs identified by the committee. “The work is great, the workers are slothful,” he said.

In its report, the committee found that the city’s population is growing so fast, compared to housing production, that there is a citywide shortfall of 10,000 units each year. At the same time, the report said, the economy is generating an ever-higher proportion of low-wage jobs. As a result, one-quarter of the renter households in the city pay more than 50% of their income for rent, committee members said.

“The crisis affects low-wage workers, seniors and the disabled as well as families on welfare; even middle-class opportunities for homeownership are virtually gone,” the report said, noting that only 17% of Los Angeles families can afford today’s median-priced home of $190,000.

The committee had intended to release its report Dec. 16, but moved up the release date in response to a series of Times articles earlier this week that outlined Los Angeles’ dramatic rental-cost crisis and the city’s lagging efforts to address it.