Housing Crisis Forces Many Into Motels

Stephanie Hosey sat in a drab motel room in Anaheim’s tourist district. She wore a light-gray Mickey Mouse T-shirt. Her black Mickey Mouse sunglasses were perched on top of her head. But Hosey wasn’t here to visit Disneyland. This one-room unit at the Covered Wagon has been her home since April.

Hosey, who earns little more than minimum wage answering phones at a nearby moving company, can’t afford an apartment in the area. She has no savings, nor much of a credit history. All she can manage is a room in a roadside inn like the Covered Wagon, where she pays $161 a week.

“If there wasn’t a place like this, I couldn’t stay in Anaheim,” said Hosey, 31. Earlier in the year, she sent her only child, Tabitha, 14, to live with her grandmother in Stockton. “I don’t want to raise her in a motel,” said the single mother.

Hosey’s living situation is shared by a growing number of workers and families throughout Southern California. The booming economy, in part spurred by the creation of tens of thousands of low-wage jobs, has pushed rents up so high that most apartments are far out of reach to lower-income families.

The average apartment now goes for nearly $1,100 a month in Orange County, $838 in Los Angeles County, and rents are climbing higher. The few new apartment projects underway are generally high-end.

“We are reaching an unparalleled crisis in our housing,” said Gary Squier, a consultant and former head of the Los Angeles Housing Department.

There are no precise statistics on people like Hosey. Motel dwellers are sometimes counted as part of the homeless population, and that group has burgeoned in recent years to more than 100,000 on any given night in L.A. and Orange counties. But interviews with motel owners and tenants along some of the region’s largest motel strips--in Anaheim, Long Beach, Van Nuys--show dramatic increases in the number of long-term motel residents. At motels like the Covered Wagon, Economy Inn and Rainbow Inn in Anaheim, the working poor now comprise the bulk of year-round guests.

“What’s different is that the people who are staying here are no longer the unemployed,” said Jim Parkin, owner of the Covered Wagon, a 70-unit motel that once catered to the drive-by tourist but now relies almost entirely on locals.

Parkin and others at the Covered Wagon say the motel regulars include parents who work at El Pollo Loco, Knott’s Berry Farm, gas stations and other service establishments.

“There’s no one here collecting cans,” Parkin said.

The nation’s record economic expansion and growing prosperity have contributed to the housing plight of lower-income families.

Even though real wages have risen for those at the bottom of the economic ladder in recent years, income has soared for those in higher brackets. The more affluent have bid up home prices, locking out more of the middle class and, in turn, helping drive apartment rents to stratospheric levels.

“Increasingly, there’s a growing sense that homelessness, in part, is related to the stark reality that housing costs too much.” said Nicholas Retsinas, executive director of Harvard University’s Joint Center for Housing Studies.

In few places are the working poor’s housing needs more acute than in Southern California, where about 750,000 residents hold minimum-wage jobs while a critical shortage of new-home construction has put enormous pressures on existing supplies.

Prices for typical homes have reached record highs nearly every month this year, hitting $277,000 in Orange County and $206,000 in Los Angeles County in September. Rising prices have pushed more would-be homeowners into apartments, lowering vacancies and sending rents even higher.

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In Orange County, Southern California’s tightest housing market, monthly rent for a typical two-bedroom apartment has risen 26% over the last three years, according to Marcus & Millichap, a Palo Alto real estate brokerage. In Los Angeles County, rent for the same unit has jumped 20%.

Karen Roper, who coordinates Orange County’s homeless programs, sees rising numbers of motel families. She also sees the widening gulf between what most new jobs pay and what’s needed for housing.

In Anaheim, for example, Walt Disney Co. is filling 8,500 jobs for the opening of its California Adventure theme park in February, but most of those jobs will be part-time and pay about $7 a hour. And in Anaheim’s tourism industry, that is one of the better-paying entry-level jobs.

“How can you afford $1,000 a month in rent if you only make $7 an hour and pay for transportation, food, clothing and other things you need?” Roper asked.

How indeed, wonders Antonio Sauceda. Only a few blocks away from the Covered Wagon, Sauceda, 51, shares a room at the Lincoln Inn with four of his children. He figured when they moved in that his family would stay only a few weeks, but the room has been home now for more than two years.

At 4:45 a.m. five days a week, Sauceda rolls up his sleeping bag on the floor and dresses quietly so he doesn’t wake up his children. He rides on three buses and walks about half a mile to get to his full-time job at an airplane parts maker in Orange, where he’s a handyman, sweeping floors, sanding parts and wrapping boxes for shipment.

He earns $280 a week, about $100 more than his weekly rent. He gets an additional $200 a month in welfare--but even with that, it’s not enough to lease an apartment and still have money to pay for utilities, food and other essentials.

The Saucedas occupy one of 120 units at the Lincoln Inn, which is classified as a residential motel. That means tenants can have a small refrigerator, a hot plate and a microwave oven in their rooms. But a residential motel doesn’t provide any greater privacy than any other one-room unit.

Sauceda’s teenage children sometimes change clothes under their sheets. Sauceda finds his quiet time when he does laundry or sends the children to church.

At times, he walks to benches outside and stares into the distance to escape his depression. Recently, his oldest daughter ran away, only to live in another motel nearby. She’s just 16.

She left a cheek-to-elbow existence with her siblings. The Sauceda room is largely filled with two bunk beds and another bed shared by the children. Magazine cutouts of singers such as ‘N Sync and Britney Spears and drawings of cartoon characters line the eggshell-colored walls.

Cardboard boxes and milk crates hold clothing and canned goods. Sauceda cooks on a two-burner hot plate or uses a microwave. Dishes are washed in a single sink. A college-dorm-sized refrigerator has little more than a fruit drink, milk and tortillas.

Recently, Sauceda saw an apartment building nearby with a vacancy sign. It needed paint, the lawn needed trimming. A place he could afford, he thought.

But when he walked into the lobby and asked for an application, the woman in the office asked him about his credit. “Don’t waste my time if your credit is no good,” she told him. Sauceda slinked away. “I wanted to cry,” he said.

In the past, families such as the Saucedas hoped to land in the safety net of government-subsidized housing. But in Southern California, there are now four families for every low-income unit available--the worst ratio in the nation, according to the Center on Budget and Policy Priorities, a Washington think tank.

Last month the U.S. Department of Housing and Urban Development said it will increase federal housing subsidies in dozens of communities, including Orange and San Diego counties, to help low-income residents keep pace with skyrocketing housing costs.

The agency hopes the higher subsidies will add 1.4 million housing units, including about 4,000 in Orange County, to the government’s program. But analysts are skeptical about that figure, and even that might not be enough.

At the same time, the government is trying to add subsidized units, apartment owners are taking their properties out of government-sponsored housing for the poor because they can get higher rents on the open market. Analysts say one-third of subsidized multifamily housing in Southern California--mostly in L.A. County--could be pulled out of government programs over the next five years.

Meanwhile, developers aren’t rushing to fill the needs of low-income residents either. With land prices soaring, low-income homes have become difficult to build without government assistance, and housing needs far surpass available public resources.

In the last decade, the population of the city of Los Angeles has grown by 300,000, but the total number of housing units has risen by only 31,000, according to city figures. More families are doubling or tripling up.

Moreover, much of what developers are building for sale and for rent are high-end units. These more expensive units provide bigger profits for builders but are out of reach for most workers.

“You just get tired of looking and not finding anything,” said a weary Lucretia Barnes, 29, who lives at a residential motel in downtown Los Angeles.

Earlier this year, Barnes broke free from her total dependence on welfare, landing a job as a security guard. But her minimum wage has left her stuck in the same motel, where kids play tag in the hallways because the streets outside are mean.

Over the months, Barnes says, she has compiled a list of more than 100 telephone numbers of apartment buildings with vacancy signs. She has checked out apartments in Echo Park, Hollywood, the Wilshire district.

“Either I can barely afford it, or if I find something I can afford, it’s run down,” she said.

In Orange County, about 100 motels cater to the working poor, according to social service agencies. Many of the motels, with such enchanting names as the Silver Moon, Robin Hood and Tahiti, were built a generation ago, when families traveling by car would cruise along streets such as Beach Boulevard and pull into a motel for a night or two. But in the last decade, these mom-and-pop motels, many of which fell into disrepair, lost their allure to tourists.

But not to lower-income families, who find them easier to get into because there are usually no deposits, no credit checks and no utility bills. In most cases, motel rooms still are cheaper than apartments.

Across from the Covered Wagon in Anaheim, for instance, the Cobblestone Village Apartments offers a one-bedroom unit--restricted to couples earning less than $33,000 annually--for $741 a month. That’s only about $40 more than the monthly equivalent at the Covered Wagon.

But the Cobblestone also charges a $300 security deposit and a $20 application fee for couples, and it requires tenants to pay for their own utilities. Their credit must be relatively clean. And, in what may be the toughest requirement for many, applicants must prove their income is at least twice the amount of the rent. So at minimum, to move into a one-bedroom apartment there a family must have at least one full-time worker pulling down $8.60 an hour.

Other apartments have more stringent requirements: upfront fees such as cleaning deposits, as well as the first and last month’s rent. Such costs are a big reason motel dwellers, living paycheck to paycheck, can’t save enough for an apartment.

Helen Dunlap heads Project Dignity, a Garden Grove group that aids motel families. She wishes more of the grants her organization gives would be used to pay for move-in costs. But they’re not, she says, because affordable apartments are so scarce. “There’s just nothing available.”

Hosey can attest to that.

Last year she and daughter Tabitha shared a $1,200, two-bedroom apartment in Stanton with a roommate. Hosey was working at Disneyland and wanted to move to a nicer neighborhood with better schools. So she gave 30 days’ notice, figuring there would be plenty of time to find another apartment.

She looked and looked to no avail. Finally, she locked up her goods in storage nearby, paying $85 a month, and moved into the Covered Wagon. Having lost her job at Disneyland, she found work at the motel. Still, she decided to send Tabitha to live with her grandmother in Stockton, where the girl would be in a safer environment and have room to grow.

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Last summer Tabitha spent three weeks with Hosey at the Covered Wagon. But when her mother was at work, Tabitha was afraid to go outside. Cars zip by at high speeds just outside the motel. And even for a mother and daughter longing to be with each other, Hosey says, it wasn’t easy to be in a single room together for so long.

Hosey stays in touch with Tabitha by letter and phone. She keeps a photo display atop a paint-peeled radiator in the room. The photos start with Tabitha as an 8-month-old and move chronologically, to age 4, hugging Peter Pan at Disneyland, to 14, wearing an angelic white dress for her confirmation.

The room is bare of any other personal touches. There are two beds a few feet apart, a 15-inch television, a table, a chair, a Styrofoam ice chest.

Last week Hosey was packing to move to another motel down the street, Robin Hood. It will cost $30 more a week, but she will have a kitchenette to fix her own meals. In the coming weeks she’s expecting to take on a second job, at Disneyland Resorts’ new park in Anaheim. The extra income might be enough to help her move into an apartment and be reunited with her daughter.

“I’m hoping before Christmastime,” Hosey said. “I don’t really believe it will happen, but I’m hoping.”

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Renters Get Squeezed

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Far more renters...Households added (January to January)

Los Angeles County: 53,540

Orange County: 13,022

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...Not enough new apartments...: Multifamily permits*

Los Angeles County: 8,000

Orange County: 6,300

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...Equals surging rents: Average monthly rent

Los Angeles County: $1,085

Orange County: $838

*Includes apartments and condominiums

**Projections

Sources: California Department of Finance; Construction Industry Research Board; Marcus & Millichap