Housing Dilemma for Lower-Wage Earners : Study: Rising rents are forcing the working poor to live in overcrowded units or slums, advocacy groups say.

By DARYL STRICKLAND

Sept. 10, 1999 12 AM PT

TIMES STAFF WRITER

Low-income residents of Orange County are working more hours than ever to afford a decent apartment, a trend that is forcing tens of thousands to settle for overcrowded units and slum housing, according to a report released Thursday.

Among other things, the study’s findings pose a serious threat to the region’s economy, which is enjoying its longest peacetime expansion since World War II.

A couple working two minimum-wage jobs would each have to work 11 hours a day, seven days a week to rent the average $1,152-a-month apartment in Orange County, according to a study by the National Low Income Housing Coalition, a Washington, D.C.-based group, and the Southern California Assn. of Non-Profit Housing.

The study found that 760,000 people living in the Southland earn the state’s minimum wage of $5.75 an hour, or less than $12,000 a year.

“There are a lot of $6-an-hour jobs, but not a lot of $6-an-hour apartments, or even $10-an-hour apartments,” said Jan Breidenbach, executive director of the Southern California Assn. of Non-Profit Housing. “We have a crisis in affordable housing.”

That crisis threatens to derail the region’s still-growing economy. Low-paying service jobs comprise the bulk of employment growth statewide. But with people paying a large percentage of their income for rent, they have less money to spend on food, clothing and other consumer products that keep the economy humming.

In addition, soaring housing costs force businesses to pay higher wages to recruit and retain employees. That in turn makes their products and services more expensive in a competitive global marketplace. A decade ago, those forces were major contributors to what became the recession of the early 1990s.

The working poor’s inability to find good housing also affects the quality of life in Orange County, from longer commutes on clogged freeways to more air pollution.

Thousands of minimum-wage earners cope with rising rents by living in overcrowded housing--estimated to affect one out of five Southern California renters, one of the highest rates in the nation--or by living in slum housing. To remedy the situation, the study urged the state to raise the minimum wage, assist more families in paying rent and for state and local governments to provide more money for the development of low-income housing.

For poorer families, the Southland’s record-high rents knock them down like a wrecking ball against a brick building. In Van Nuys, Elizabeth Bucio and her husband, Juan Carlos Leon, who are raising three toddlers, have been served an eviction notice from a modest apartment.

The family, supported by Juan’s minimum-wage job as a chef’s assistant at a posh Santa Monica restaurant and Elizabeth’s income as an Avon saleswoman and baby-sitter, can stretch their budget to afford $650 a month in rent. But their landlord has decided to demolish the 100-unit building where they live to erect one that caters to affluent seniors.

Bucio and Leon have been added to waiting lists for smaller or shabbier places than where they currently live. A two-bedroom unit in Van Nuys goes for up to $950 a month; a one-bedroom in Santa Monica, $800 a month. Landlords at those properties have told them what they already know.

“We can’t afford that rent with the wages we’re earning right now, even for a one-bedroom apartment,” Bucio said through a translator. The family found a small two-bedroom unit for $700 a month, but they lack the $1,425 in deposits the apartment requires, and the extra money for moving expenses.

“Right now,” she said, “I don’t know what we’ll do.”

The survey was based on average apartment rates gathered by RealFacts, a Novato, Calif.-based firm that calculates rents in cities throughout the state. The company surveys complexes with 70 or more units, which tend to be newer and pricier. However, those units tend to pull rents in the rest of the market higher.

Housing costs have risen sharply throughout the Southland for more than a year as the construction of homes, apartments and condominiums has lagged far behind job growth. Los Angeles County leads the nation in housing demand, with six jobs created for each new home that is planned; Orange County is right behind, with a 4-to-1 ratio.

The result is that housing prices are expected to escalate next year, driving up apartment rents in Orange County, where about 40% of the population lives in rentals.

An estimated four of 10 Southern California residents spend more than 30% of their gross income on rent, the study said. Many middle-class civil service employees, such as police officers, firefighters and teachers, are increasingly priced out of the housing market.

“We see this throughout the state, and it’s a grave concern in Southern California, where we expect the most growth over the next five years, that affordability is a major factor,” said Cathy Creswell, acting deputy director for housing policy at the state Department of Housing and Community Development.

Creswell said 195,000 housing units are needed statewide to accommodate growth, but “no place in the state is keeping up.”

The Orange County Business Council, the county’s largest business advocate, estimates that 10,000 new tourism jobs will be available over the next five years, which will pay less than $10 per hour. “It tells us that this trend is only going to get worse,” said Jill Dominguez, executive director of the Orange County Affordable Home Ownership Alliance, a group formed in part by business concerns to create more lower-cost housing.

“Orange County is not thinking about this problem, and it will create huge pockets of overcrowded housing in low-income communities,” she said. “You can’t have prosperity without housing.”

Throughout much of the decade, rents have risen by a faster pace than the minimum wage, making it possible to work full time and still be poor. The condition is made worse by the general shortage of affordable housing.

“We’ve moved a lot of people from being on welfare and poor to working and poor,” said Stephen Levy, who directs the Center for Continuing Study of the California Economy in Palo Alto. “It’s a real problem.”

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Out of Reach

At $5.75 and hour, minimum wage workers in California do not earn enough to afford two-bedroom apartments. In Los Angeles and Orange counties, a minimum-wage household must work more than 150 hours per week to pay the rent.

Los Angeles County

Average 2-bedroom apartment rent: $1,140

Hours of work needed to afford 2-bedroom apartment: 153

Housing wage*: $21.92

Orange County

Average 2-bedroom apartment rent: $

Hours of work needed to afford 2-bedroom apartment: 154

Housing wage*: $22.15

* Riverside County

Average 2-bedroom apartment rent: $732 Hours of work needed to afford 2-bedroom apartment: 98 Housing wage*: $14.08

San Bernardino County

Average 2-bedroom apartment rent: $754 Hours of work needed to afford 2-bedroom apartment: 101