How Poor Were Lost in Shuffle of O.C. Renewal

Several years ago, when redevelopment of Santa Ana’s Civic Center began, blocks of houses occupied by low-income families were razed. In their place have sprung up multistory apartments and condominiums designed for government workers, office buildings and senior citizen housing projects.

The poor were displaced--by a policy that was hardly an accident.

The city’s first priority, said Robert Hoffman, Santa Ana’s redevelopment manager, was not housing but economic revitalization of downtown.

Building housing that is affordable for the poor has never been a high priority in Orange County, where local governments have frequently ignored mechanisms to promote such housing or have adopted policies adding to housing costs. Many of these decisions have been made in the last five years, a time when the number of county homeless has doubled to about 10,000 people, according to the Orange County Homeless Issues Task Force.

A Times review of local housing policies found that:

* Many cities, including those working to provide lower-cost housing, have piled on development fees for schools, parks, libraries and other amenities that have boosted the cost of all housing, helping to put most out of reach for low-income families.

* Although all local governments are under state mandate to update the housing components of their general plans, a planner reviewing the documents for the state said few county localities are doing anything substantial about producing more low-cost housing.

* Despite the Legislature’s instruction that some money from redevelopment agencies be put aside for housing, county cities were sitting on millions of dollars meant to be spent on housing. Redevelopment revenue has instead paid for glitzy commercial developments or built new streets, sewers and water lines.

Some county cities do have active housing programs. Irvine, for example, set a goal of providing 12.5% of all new housing for households of very low incomes. Anaheim is making vigorous use of density bonuses in building low-cost housing for senior citizens and families. And Garden Grove is in the midst of a $25-million program to rehabilitate and build housing for low-income families in Buena Clinton, a poverty pocket in the city’s southeast.

But fees designed to enhance quality of life have helped to drive up the cost of new homes in some of these cities and elsewhere. And while affordable housing advocates insist that higher-density develop ment is needed to counteract the astronomical price of real estate in the county, some local governments have been reluctant to adopt higher-density zoning, partly for fear that it would worsen traffic congestion.

“Politically, the issue of affordable housing has taken a back seat to quality-of-life issues” in the county, said Joe Carreras, senior housing planner at the Southern California Assn. of Governments.

Preserving “quality of life” in too many instances has meant keeping lower-income residents away by refusing to allow construction of new apartments they could afford, housing advocates contend.

Ken Agid, a principal in the Marketing Department, an Irvine-based real estate consulting firm, said: “For years cities (in the county) have practiced elitist zoning because they don’t want the transient population that is attributed to apartments within their communities.”

Even some condominium projects with more affordable units have been rejected. In Seal Beach, a plan calling for construction of condominiums that would sell for an “affordable” $120,000 to $150,000 was recently scuttled to appease residents who said the units would be “too small and wouldn’t attract the proper element of people,” said Ed Knight, the city’s former director of development services.

Instead, the council approved building 355 homes, expected to sell for more than half a million dollars each.

The local governments of the county have missed many chances to develop more effective strategies to solve the problem of providing housing for citizens on welfare or in lower-paying jobs, housing advocates said. Often, the governments seem to have given up on the task, saying it is hopeless without much state and federal aid.

Martin Brower, publisher of a newsletter that monitors the county’s real estate industry, wrote that because of spiraling inflation and other factors, building low-cost housing in the county has probably become a futile objective.

“Perhaps it is time to drop the subject,” Brower said.

One method available to local governments to encourage lower-cost housing--density bonuses--has been applied much more vigorously in some cities than in others. The practice entitles developers of affordable housing to build more units to the acre than local zoning would otherwise permit.

In Fullerton, for example, only recently did the City Council adopt a plan to grant a density bonus--after council members were advised that the state has mandated such bonuses for a decade. Furthermore, Fullerton has refused to use federal community block grant money or any other government funding to develop lower-cost housing.

“It has been the council’s position that private industry should take the lead in solving the housing problem,” city redevelopment manager Terry M. Glavin said.

William Andrews, a planner reviewing local housing plans for the state Department of Housing and Community Development, believes that county cities “for the most part are just letting the housing problem roll out to the hinterlands.”

He was referring to the exodus of low-paid workers to San Bernardino and Riverside counties for apartments they can afford. By contrast, Andrews said, “in Northern California there has been more of a pulling together of concerned local governments, housing advocates and industry focusing on the problems.”

Comparing Orange County to Los Angeles and Northern California, housing advocates note that the county has spawned far fewer nonprofit developers of low-cost housing, for which they blame a shortage of financial support and cooperation from local government and private industry. Nonprofit developers are preferred over for-profit developers in competing for state and federal subsidies for low-cost housing, said Marc Brown, staff attorney for the California Rural Legal Assistance Foundation and a low-income housing lobbyist.

He said this preference occurs in part because nonprofits commit to maintaining the housing they develop as “affordable.” By contrast, for-profit developers say they will convert affordable apartments to market rate at the end of their government contracts, which usually run about 20 years.

Housing experts say there are 40 to 50 nonprofit housing development corporations in Los Angeles County and about 175 in the Bay Area. Orange County has had two active private, nonprofit developers: the Civic Center Barrio Housing Corp. in Santa Ana and the Orange County Community Development Corp. Neither has produced low-income housing in large quantities.

The Civic Center Barrio Housing Corp. has built 64 condominiums and apartments in the last nine years. The Orange County Community Housing Corp. has built 52 apartments since 1977.

Orange County once was a reluctant leader in providing affordable housing. Under pressure from state and federal agencies and housing advocacy groups, the County Board of Supervisors in 1979 became one of the first local governments in California to require part of all new housing to be built for low- to moderate-income people. That resulted in many new affordable houses and apartments in the county’s unincorporated region.

But builders strongly opposed the mandatory requirements. In 1983, the Board of Supervisors canceled them, contending that free-market forces would adequately address the housing needs of low-to-moderate-income groups.

That did not happen, however. Released from the county requirement, developers were driven by profit opportunities, market demand and changes in tax laws to build fewer apartments and more expensive homes for the county’s upwardly mobile.

The Orange County Housing Authority for more than a year has had $4 million available to loan at below-market interest rates to developers of low-cost housing. Just 40 low-cost units have so far been financed under the loan program. Housing authority executive director Sandra McClymonds said developers “are not lining up” for the loans, apparently because such housing is not as profitable as market-rate units.

Nonetheless, county housing officials insist that because the mandatory requirements were eliminated, the county has far exceeded its goals for low-cost housing, because builders have produced 10,014 such homes, many more than the target of 5,660.

The problem is the county’s definition of affordable housing, the county’s critics said. The county defines affordable as within the means of households earning up to 120% of the county’s median income, which it says is $51,709--substantially higher than the $46,900-a-year median income projected by the federal Department of Housing and Urban Development.

So, to the dismay of advocates for the poor, the county considers as affordable housing that is within the means of households earning up to $62,050 a year. It sets no goal for providing housing for very-low-income families.

Jean Forbath, director of Share Our Selves, a nonprofit service organization in Costa Mesa, said the people she deals with “are lucky if they make $8,000 to $10,000 a year. . . . Quite often I am working with a single mother with a child or two. They are living in motels and parks and doubling and tripling up and renting rooms and garages.”

Housing officials report extreme overcrowding in the older neighborhoods of Santa Ana and some northern county cities. In enforcing housing codes, Santa Ana officials frequently report finding 10 or more people sharing one bedroom.

The median price of a county home has soared to $237,900--contrasted with a $91,600 median home price for the nation--forcing some families with substantial incomes to stay in the apartment market. There they compete with the poor for the county’s rental stock, pushing rents even higher.

Lower-priced apartments--$500 to $700 for a one-bedroom and $550 to $750 for a two-bedroom--are so scarce, said Bill Kraus, executive vice president of the Apartment Assn. of Orange County, that they are snatched up 24 to 48 hours after they are advertised.

MONEY SHIFTED: O.C. governments misused $33 million meant for housing. A3

FINALLY, A HOME: An apartment found for family in the nick of time. B1