THEY extinguish fires, teach children, tend the ill and run small businesses in urban areas. What they cannot do is find homes they can afford near those jobs. But faster than anyone imagined, relief is coming to Inglewood, Oxnard, Pomona, Covina, South Park, Palm Springs and other Southern California communities where middle-class workers are starved for housing.
Major players such as former Housing and Urban Development Secretary Henry Cisneros, John Laing Homes, Watt Communities and the California Public Employees’ Retirement System already this year have pumped millions of dollars into transforming abandoned factory sites and empty lots into high-density neighborhoods for those who want to live close to their work.
CityView, Cisneros’ workforce-housing development company, had about 2,000 homes underway statewide in the first quarter of 2005. By the end of the year, it will have invested $750 million in moderate-priced housing, most of it already under construction. The company, which burst on the scene two years ago with $40 million in start-up money from CalPERS, the largest U.S. pension fund, has received $260 million more to develop workforce housing in a dozen California locales, including the San Fernando Valley, Azusa and San Jose.
Local and state governments are in on the act too, easing zoning rules for builders, expediting the permit process and tossing in various tax credits.
Another shot in the arm could come from the Housing America’s Workforce Act, introduced this summer in the U.S. Senate, which would give companies that help eligible employees buy homes a 50-cent tax credit for every dollar they provide, up to $10,000 or 6% of the purchase price.
Workers who earn 80% to 120% of an area’s median income -- the targeted purchasers of workforce housing -- need all the help they can get. A buyer had to earn $124,320 a year to afford the California median-priced home of $530,430 in the second quarter. But someone earning the state median of $53,840 comes up $70,480 short, according to the California Assn. of Realtors.
Workforce housing helped Rebecca and Tony Guevara bridge that gap. The couple recently purchased a 2,046-square-foot, four-bedroom single-family home in Oxnard for $557,374, half a mile from their jobs and down the street from their older daughter’s school. The home is part of a 219-unit development constructed on an old agricultural field by John Laing Homes, one of the largest U.S. builders.
Tony, 35, a feed-company employee, and Rebecca, 33, who works for the city of Oxnard, lived in a small three-bedroom home nearby for five years but outgrew it as their family expanded. The couple has four children, ages 8 months to 4 years. Their combined salaries are $60,000. They like that their new home is well constructed, Tony said, and well situated -- a couple of blocks from a grocery store and close to the freeway.
Laing Homes is expanding its workforce housing roster to neighboring Port Hueneme, where the company recently purchased four properties zoned for industry. The site will be used to build 150 new homes and townhouses priced from $350,000, said Bill Rattazzi, John Laing’s Los Angeles/Ventura president.
“There are people who work in Port Hueneme and live in Bakersfield,” Rattazzi said. “I’m appalled that [they] have to live in these circumstances, just to find employment and live a reasonable lifestyle.”
“People are saying, ‘I don’t want to commute,’ ” said Phil Rush of Resmark Equity Partners, a West Los Angeles real estate investing firm involved with urban housing, especially condo conversions. “ ‘I’d rather have an urban home closer in.’ ”
That sentiment was the inspiration for Renaissance, a workforce-housing development going up a few furlongs from Hollywood Park racetrack in Inglewood. The 370-home gated neighborhood, located under an LAX flight path, occupies 37 acres that were once considered for a football stadium and more recently for a hotly disputed Wal-Mart store.
Watt Communities, which purchased and developed the land about three years ago, sold some of the lots to MBK Homes and others to John Laing Homes, which partnered with CityView. The site will be a high-density community of single-family homes priced from the low $400,000s for 1,500 square feet to the low $600,000s for 2,500 square feet. Owners share a community swimming pool, tennis courts and playgrounds.
Buyers who qualify for a loan put their names on a list, which is numbered on a first-come, first-served basis. About 12 homes are offered for sale in each phase, and the buyers highest on the list are called first. Construction begins after the homes are sold.
Cedric and Lori Penix, who own a smaller, older home across the street from Renaissance, were among the first to sign up on Laing’s waiting list -- currently 2,100 names long -- early last year. Cedric, 40, is a partner in a private-equity firm in Culver City, and Lori, 36, a television marketing director.
The couple bought a top-priced four-bedroom home in Renaissance in May, during the second phase of the development, for $517,000 -- which climbed to $540,000 with upgrades. Comparable move-up homes they scouted nearby, in the same price range, were older and had fewer amenities.
Even in high-priced towns up the coast, workforce housing is emerging in underutilized areas. Jose Rojas, 55, and wife Maria, 44, left central Los Angeles six years ago for Santa Maria in search of a safer neighborhood and good schools for their two daughters, now 18 and 16. Jose, a former foundry worker, landed a school custodian job and Maria took a job as a postal clerk. With a loan, they purchased a mobile home for $20,000, which they quickly paid off.
Last year they sold it for $70,000, which they used toward a down payment on a 1,700-square-foot, three-bedroom CityView/Watt home in central Santa Maria. They paid $395,000. Similar homes they looked at with more land sold for $600,000, Jose said. The house is a seven-minute drive from Jose’s work.
“I will never regret moving here,” Jose said. “Even though many people in Santa Maria struggle to live here because it’s expensive, there still are places that are affordable. And we were lucky to get one of them.”
For buyers who prefer L.A. urban living, 40 condos, dubbed Pan American Lofts, are being developed downtown by Phoenix Realty Group, which oversees the $100-million Genesis Workforce Housing Fund. The developer also is constructing 89 workforce lofts in San Pedro and the Puerta del Sol condos on the Gold Line in the Lincoln Heights neighborhood of L.A.
Despite progress, workforce buyers still will face long waits for housing in the foreseeable future, government officials and builders say.
“We have to do what other big cities in the world are doing,” said Howard Press, Watt Communities’ president. “Go for high-density housing. That’s what keeps the prices down.”
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Where to look for workforce homes
Finding unsold workforce housing is tough, but a number of units are under construction. Here is a partial list of sources:
Los Angeles County
AMCAL’s Avenue 26 Condominiums in L.A.'s Lincoln Heights: (323) 262-6636; www.ave26.com.
CityView: (310) 656-9566; www.city-view.net
Ownership Program: www.ehop.org/HomebuyerInformation.asp.
Phoenix Realty Group: (310) 936-9977; www.phoenixrg.com.
Renaissance, in Inglewood: sales offices of John Laing Homes: (310) 419-7100;
MBK: (310) 672-5625; Watt Communities: (310) 677-3003.
Resmark Equity Partners (mostly condo conversions): (310) 474-8400; www.resmarkllc.com.
Urban Pacific Builders, Long Beach: (562) 590-5600; www.urbanpacificbuilders.com.
(866) 992-9288; www.wattcommunities.com.
Cantada Square in Anaheim: (800) 571-1656; www.brookfieldsouthland.com.
John Laing Homes:
(949) 265-2400; www.johnlainghomes.com.
MBK Homes, Irvine: (949) 789-8300; mbkhomes.com.
Cabrillo Economic Development Corp.'s workforce-housing projects: (805) 659-3791.
San Diego County
Centre City Development Corp. in San Diego:
(619) 235-2200; www.ccdc.com, click on “affordable housing directory.”