Program to Help Poor Buy Homes Is Unveiled

Los Angeles, which suffers from one of the nation’s tightest housing markets, will receive new help from the federal government under a multimillion-dollar program announced Thursday by Mayor Richard Riordan and Housing and Urban Development Secretary Andrew Cuomo.

Cuomo joined Riordan and other officials, including City Atty. James K. Hahn, at a news conference to unveil the program, the largest of its kind in the nation. Once in place, it is expected to provide 560 families with discounted homes in some of the city’s poorer neighborhoods.

“Los Angeles is the role model for the country in this,” Riordan said. “This is going to be a big step forward.”

As part of the program, the federal government will turn over homes that have been foreclosed upon to the city and the Enterprise Foundation, a nonprofit group. The homes will be rehabilitated and put up for sale at discounts of 30% to 50%, officials said Thursday.

To qualify for them, prospective homeowners will have to be of low or moderate incomes and meet other criteria demonstrating their need. In some cases, the city will carry second mortgages on the properties, further reducing the homeowners’ costs.

All told, the city hopes to turn around 560 homes in Watts, Boyle Heights, Highland Park, Canoga Park, Pacoima and South-Central Los Angeles.

Each of those communities will benefit from the program, said Cuomo, who has devoted his time in office largely to expanding home ownership.

Over the last several years, Cuomo said, cities across America have enjoyed extraordinary health. Los Angeles is no exception, he said, but he noted that while the city “has come roaring back . . . you still have Watts. And you still have conditions that people shouldn’t be living in today.”

The housing situation in Los Angeles is one of the most challenging in the nation. According to the Enterprise Foundation, a local organization that works to develop urban development strategies, the median price of a home in Los Angeles is $201,000 and the median rent in the city is $933 a month.

At those prices, Los Angeles families spend a far higher share of their income on housing than those in almost any other part of the country. The foundation estimates that it takes a wage of $18.33 an hour to afford to live in Los Angeles at the median rent. That puts housing out of reach for virtually all minimum wage and even so-called “living wage” workers.

Although the officials who gathered for Thursday’s announcement acknowledged the new program will barely dent the city’s overall housing shortage, they argued success would have ripple effects through the local economy.

Homeowners, said Cuomo, are more likely than renters to take good care of their properties, and the elimination of vacant properties will remove eyesores from struggling neighborhoods. Often, such vacant properties become magnets for crime, so turning around the homes may make communities safer, the secretary and others said.

Although Thursday’s announcement brought together local and federal officials, as well as leaders of the foundation and others, the smiles and congratulations did mask some underlying tensions. According to sources familiar with the news conference planning, Cuomo’s staff insisted that Hahn, who is close to the HUD secretary, be included in the event.

Riordan, who opposes Hahn’s candidacy for mayor--Riordan backs businessman Steve Soboroff--initially balked but then relented.

On Thursday, Riordan thanked Hahn and his staff for their efforts on behalf of the program and even introduced the city attorney as “the Hon. James Hahn.”

Hahn reciprocated, expressing his appreciation that the mayor helped launch the idea.

After the news conference, Hahn and Riordan parted without speaking.