Putting a Roof Over Heads Is No Small Task
Orange County’s obvious lack of affordable housing is also true throughout California, and this acute shortage has its genesis in issues that are exceedingly complex. Writing in the Sacramento Bee, Peter Schrag asked, “How . . . do we eliminate the insane local tax structure that causes virtually all local government officials to favor auto malls and shopping centers . . . over the balanced development of industry and housing that produces healthy communities?”
How indeed? But it is true. Schrag also pointed out that a report from the Public Policy Institute of California shows how long California’s local tax structure has twisted local government’s planning priorities. Because of the revenue cities receive from sales taxes, three-fourths of 330 California cities surveyed reported they preferred retail development over any other type of land use and over new jobs and housing.
Adding to this reluctance to support housing developments is the fact that elected officials are nowhere near as eager to approve affordable housing starts as they are to approve new businesses or expand a business. Their lack of motivation, though, is an answer to the voters who don’t want elected officials to approve anything that might affect the price of their home. This excludes apartments and any condos or houses that don’t measure up to what they believe their house is worth, or will be worth in the future.
As an example, there are at least three new planned communities being built in Orange County at a time when the median price of a home is $265,000. However, since we are talking about affordable housing, a price tag in excess of a quarter of a million dollars quickly catapults the home out of the range of those prospective homeowners who are looking for a home in the first place because they can’t afford what is available. Recent articles put the median price for a new detached home in Orange County at $371,990. The current prices eliminate peace officers, nurses, legal secretaries and others who make well above minimum wage from buying a home.
In addition, there is a lack of suitably zoned land for housing throughout Orange County. The high costs of development fees inhibit builders from building affordable homes. Service sector jobs do not pay enough to afford the average Orange County house.
A recent article stated that more than 14,500 service sector jobs would be created in the county. More than likely, these service sector jobs will pay between $6 and $12 an hour with limited benefits. How can any of these people afford to purchase a house at current prices or rent an apartment? They can’t. It forces people to share an apartment to make ends meet. It’s not too difficult to figure out why California has slipped from near the nation’s leaders in homeownership to a spot near the bottom; we are now fourth from last.
Even though we have what many call a home-building boom, this shortage is not going to go away. We need to address this problem now.
Bank of America will make $3 billion worth of no-money-down home loans to lower-income buyers in 14 counties nationwide; Orange County, however, is not one of the 14. The bank estimates this new program will help at least 30,000 Americans to buy homes over the next 10 years.
The bank’s new mortgage program came on the heels of state Treasurer Phil Angelides’ pledge to invest $1 billion of state funds to buy up home loans made to low-and-moderate income buyers in California. Angelides hopes this investment will encourage lenders to make similar loans.
Both plans are tied to mortgages that meet the guidelines established by the federal Community Reinvestment Act. These loans are made to individuals or to families earning no more than 80 percent of the county’s median income.
These programs and plans to make more mortgages available to families in these income brackets are commendable and, no doubt, they will help many working families. However, we are still going to have a shortage of affordable housing, and as long as that shortage exists, these new programs could drive up prices and make matters worse.
We need to look at all the circumstances that prevent the development of affordable housing: from the NIMBY syndrome to skewed environmental policies and regulations, from the complex building code to the lack of regulatory incentives for developers. If we do not have an open dialogue about this housing crisis, we will not be able to solve this problem. If a police officer, nurse or teacher can’t afford a house near his or her workplace, we have failed as a society to provide one of the essentials in life.
