Activists Push Housing Fund Despite Budget Woes
Richard Riordan’s years as mayor of Los Angeles are remembered by some housing advocates as a time of drought, when money once used for affordable housing flowed to other needs.
Activists responded with a years-long campaign to bring more dollars to their cause--an effort that seemed to be paying off at last when finalists in the mayoral race embraced the idea of a $100-million affordable housing trust fund.
When freshly elected Mayor James K. Hahn repeated his commitment to affordable housing in his inaugural speech last summer, the momentum continued. And a deal seemed close at hand when the City Council then voted in favor of a beefed-up housing trust fund.
But just when advocates prepared to savor better days in the drive to build more housing for low- and moderate-income families, Sept. 11 changed priorities everywhere.
Now activists and tenant groups across the city are waiting to see whether Hahn can turn his campaign promise into hard cash, a particularly difficult challenge given a projected city budget shortfall of $156 million.
“It’s no doubt that it has an impact on a number of budgetary goals that I have,” Hahn said in a recent interview. “I’m still committed to having a [housing] trust fund, and I would like to work with our city administrative office and the City Council to figure out some creative ways we can still do it.”
But the economic downturn and preoccupations since the terrorist attacks have only complicated an already difficult question: Where will the money for housing come from?
“I know of no consensus at this point,” said Councilman Mark Ridley-Thomas. “I think things are kind of up for grabs as far as the menu from which we select” is concerned.
A consensus on the need for more homes and apartments in Los Angeles, particularly low-cost ones, crosses the ideological spectrum. Experts agree that it would take $100 million a year, or more, to build the nearly 4,000 housing units needed annually to meet the growing demand.
But the housing fund was established only last year and received just $10 million in the last round of budget discussions.
Though council members express support for expanding the fund, allocating the money could mean cutting something else.
“It’s not that there’s $70 million or $100 million out there not being used,” said Ron Deaton, the city’s chief legislative analyst.
After years of waiting and working, housing activists are not ready to give up.
On Wednesday, nearly 300 advocates, tenants and labor union members marched on City Hall in a demonstration of support for the fund.
Councilman Eric Garcetti led the crowd in chants and called on the city to do more to assist low-income residents.
“We need to be building 3,800 affordable housing units a year, and we’re barely building 800,” he said.
The marchers included people like Justina Santana, a grandmother concerned about family members who must live in substandard housing because it is all they can afford.
“We’re asking for housing that is better, where a person can live with dignity,” she said.
Helen Coleman, a retired Department of Water and Power worker from Hyde Park, said high rents have forced many people to move to places like Palmdale and Riverside.
“Affordable housing is a way to really revitalize our communities,” she said.
Many of the marchers were members of the Assn. of Community Organizations for Reform Now, which is also pushing for expanded emergency rental assistance for low-income tenants, including those in danger of losing their homes or unable to pay substantial move-in charges.
The demonstrators, including some who went on to speak to the City Council, said a trust fund would help address the dire problem.
Seeking Permanent Revenue Sources
The fund was conceived as a way to designate permanent sources of revenue to building affordable houses and apartments. Advocates also called for dedicating a certain proportion of the city budget to housing, eliminating the need for new debates and actions every year.
“In a lot of ways what is really important to us is securing the source,” said Jan Breidenbach, executive director of the Southern California Assn. of Non-Profit Housing, and of Housing LA, the trust fund campaign.
Hahn received a Housing Department report last week on possible sources of money. The document was based on advice from activists, developers, city administrators and the business community.
The report suggests a graduated approach to the $100-million goal: $71.1 million for fiscal year 2002, $90.6 million for 2003, $98.7 million for 2004 and $103.3 million for 2005.
Aware of “strong opposition in parts of City Hall to reliance on the general fund for any substantial amounts of money,” the advisory committee expressed hope that the mayor and council could take advantage of expanding tax revenues--from sources such as hotel room taxes, business licenses, document transfers and the DWP.
But growth in those areas now seems doubtful. City Administrative Officer William Fujioka released a report last month that warned about a projected revenue shortfall of $71.5 million. In addition, the city is expecting $84 million in an array of unanticipated costs, including a major tax settlement. And those projections do not include revenue losses or additional security costs caused by the Sept. 11 attacks.
In response to Fujioka’s report, the mayor ordered a hiring freeze and asked departments to identify potential savings.
To some on the City Council, the initial $71-million goal now seems ambitious, but Councilwoman Janice Hahn said she was not convinced that the Housing Department report had “exhausted all possible funding sources.”
“A lot of these issues will be debated and may not be the best way to fund it,” she said.
Ridley-Thomas introduced a motion this week that, if approved, might provide another source of housing fund money.
When a city-owned property is sold, the proceeds are usually split between the general fund and the local City Council district. Council members have discretion over how to spend the property funds--which in the past have gone to such projects as a police substation and the Venice Beach bike path.
Under the Ridley-Thomas motion, which has yet to be discussed, all proceeds from the sale of city-owned property would go to the housing trust fund.
“If, in fact, we believe that housing has to be made a higher priority, then our beliefs have to be matched by our resolve to find resources to build first-rate housing,” he said.
The Housing Department report also proposes a shift in the use of federal Community Development Block Grant funds, a potentially hot-button issue.
According to the report, the Riordan administration “chose to use its main source of federal housing funds--the Community Development Block Grant (CDBG)--for activities other than housing.”
In fiscal year 1995-96, the Housing Department received $41.7 million in such funds. Beginning in 1996-97, the department received an average of $26 million. The current allocation is $23 million.
The federal funds have been used in poor communities for an array of other popular programs, including landscaping and supporting neighborhood groups.
This year for example, Hahn’s 15th District, which includes Watts, will receive nearly $3 million, money that will go to a combination housing-commercial development, to a gang-alternatives program and to assist community groups such as the Harbor Boys & Girls Club.
But the district also has large housing needs.
“I think it will be a trade-off,” said Councilwoman Hahn.
The idea of shifting the use of the block grant funds will “cause a significant debate,” said northwest San Fernando Valley Councilman Hal Bernson.
Looking to State, Federal Governments
He said the state and federal government are in a better position to boost affordable housing than the city.
“If the federal government and the state were to provide tax incentives for people to build affordable housing in the city of Los Angeles, it would happen,” Bernson said.
Mayor Hahn had intended to use part of his first lobbying trip to Washington to ask Housing and Urban Development Secretary Mel Martinez for money for the city’s nascent housing fund. But the trip was interrupted by the terrorist attacks.
“I’m looking to make sure Los Angeles gets its fair share of tax credits and other sources out there,” Hahn said. “It was not a priority in the previous administration. It is one of ours. When Los Angeles is not in everybody’s face about this, I think we tend to get left behind.”
(Riordan has defended his record on housing, saying that a substantial number of units were built during his eight-year tenure and that he pushed ahead parks, libraries and street improvements that also improved the quality of life for the poor.)
The Housing Department report cites new sources of income coming from the creation of a zoning law that would require developers to include a certain amount of affordable housing in their projects or pay a fee.
The report does not mention specific sums that might be gained from “linkage fees”--assessments on commercial developers to compensate for the additional housing needs their construction creates. Hahn and many in the business community oppose the idea, saying it would kill incentives to build. Studies have been proposed to gain more data.
“To me ‘linkage fees’ ought to be seen as a last resort,” Hahn said, voicing a view widely held in the business community. “I don’t think they’re helpful, especially in a fragile economy.”
Housing LA advocates say they have no preference for one funding source over another. And they say they realize that the actual amount in the trust fund will vary year to year.
But the more important issue, dedicating continuing sources of money, is something that can be done even in a year of economic difficulty, they say.
Said Breidenbach: “Our message is still, ‘We want a trust fund.’ ”
