Reviving Watts Housing
Where can middle-income families buy new houses at only $150,000 that are within a short commute to downtown Los Angeles or the airport? Watts.
For the first time since World War II, private developers are building homes in a new subdivision within view of the Watts Towers. The three- and four-bedroom houses have two-car garages and kitchens complete with microwave ovens, dishwashers and garbage disposals. Other selling points: security systems intended to ease fears about the high crime rate, and the presence of several retail outlets in the development to provide services and goods not otherwise readily available in Watts.
The for-profit developers, Marvin Greer and Thad Williams, can keep the prices comparatively low because they bought the land at a bargain.
First-time homeowners can get a good deal also because the City of Los Angeles is investing $6 million from single-family mortgage revenue bonds to provide below-market interest rates. A family of four, for example, can qualify for the lower interest rates if it has an income of less than $50,000. Buyers can make a down payment as small as 5% and qualify for a 30-year, fixed-rate mortgage at 7 1/3% interest. At that rate, the mortgage payment on a typical home in the development would be only $998 a month.
The city is also putting up as much as $1.5 million, depending on what the project needs, to provide “soft” second mortgages that do not have to be repaid until the house is resold. Home buyers earning between $32,000 and $42,000 (a family of four) can use the second mortgages to boost their down payments, thus cutting their monthly mortgage payments.
The high cost of home ownership has priced most families out of the Los Angeles market. The median price of a house is $215,000. To buy for less, thousands of men and women endure long commutes from far-flung suburbs. The new houses in Watts can reduce commutes and begin to rebuild that community.