Affordable housing bond asks voters for their vision of L.A.

Times Staff Writers

Los Angeles voters next week will consider the largest municipal housing bond in U.S. history, a $1-billion package that promises both to boost the supply of increasingly scarce affordable housing and force the city to rethink 60 years of land-use policy.

Measure H, which is backed by Mayor Antonio Villaraigosa as well as some of the city’s biggest developers, would create an estimated 10,000 affordable housing rental units, increasing the total number of such dwellings in Los Angeles by about 13%.

The bond, which requires a two-thirds majority and would add $50 to $60 to the average homeowner’s yearly property tax bill, also would provide financial assistance to qualified home buyers.


Measure H comes at a time when housing prices have become a potent political issue. The average rent in the city has nearly doubled in the last 12 years and now hovers around $1,700 -- out of the range of most working-class Angelenos.

And though the city has made some progress in building low-income housing over the last decade, it has been largely offset by gentrification and rising home values. A recent study by the Southern California Assn. of Non-Profit Housing found that 12,800 affordable rental units had been built using city money since 2001, but 11,000 existing rent-controlled apartments were either torn down or converted to condominiums during the same period.

The city uses a complex formula to determine who is eligible for affordable housing units. A household qualifies now if it earns less than $44,960 a year.

Villaraigosa and others say Measure H represents an unprecedented effort to deal with what they consider a housing crisis.

Some neighborhood activists in the San Fernando Valley and elsewhere have come out against Measure H. Most opponents say that it would unfairly burden property owners and that the city should not tax homeowners to build affordable housing. They also fear that new affordable units would add density to single-family neighborhoods.

But to some urban planners, passage of Measure H also would force Los Angeles to confront larger questions: Where should housing be built, and how dense should it be?

They say it would place two competing forces that have long dominated land-use policy in Los Angeles on a collision course: the need for more housing to keep up with the growing population and the desire of residents to keep their neighborhoods free of new development.

Measure H would suddenly give developers a hefty community chest with which to build affordable housing. But they would face the same hurdles -- city zoning laws that make it difficult to build dense multi-unit dwellings in large swaths of the city, and the expected community opposition -- that have long stymied efforts to increase the city’s affordable housing stock.

“This illustrates the gap between housing policy and planning policy,” said Michael Woo, a city planning commissioner and former City Council member. “It’s being treated as a housing issue without thinking how it affects the physical development of the city.”

Some planners worry that if the city doesn’t change its zoning rules, the bulk of Measure H’s money would end up being spent in the same few neighborhoods where affordable housing projects are generally accepted without much opposition.

There is a geographic imbalance when it comes to where city funds help building affordable housing: About 82% of those units are in just five of 13 council districts that cover downtown, northeast Los Angeles, South Los Angeles and the Hollywood area. Only about 15% of the units are in the San Fernando Valley.

JoAnne Yokota, executive director of Beyond Shelter Housing Development Corp., said rising costs for buying land and construction have become a major impediment to developing affordable housing in Los Angeles. Beyond Shelter, which has completed about 600 affordable units since 1992, now estimates that it costs about $300,000 to build one such unit.

Until recently, the biggest problem Beyond Shelter faced was opposition from residents who didn’t want an affordable housing complex near their homes.

But recently, Yokota said, she and her colleagues find themselves competing against condo developers in areas of town where just a few years ago affordable housing developers had no problem acquiring land, including Koreatown, the MacArthur Park area and downtown.

“Every landowner thinks their property is worth more,” Yokota said. “That adds to the cost, which means you have fewer projects that can be built and financed through these programs because the money doesn’t go as far. Every little cost adds up to something.”

Since taking office last year, Villaraigosa has spoken often about his vision of a denser and more vertical Los Angeles -- with apartment towers lining commuter rail lines and struggling neighborhoods coming back to life by converting old industrial and office buildings into homes.

The mayor’s vision is already becoming reality in parts of Hollywood, the Fairfax district, North Hollywood and downtown, where clusters of dense apartments have risen.

But Stuart Gabriel, director of the USC Lusk Center for Real Estate, said passage of Measure H would force Los Angeles officials to have a serious debate about how vertical and dense the city should be.

That’s because the city would get the most bang for its affordable housing buck if it allowed developers to build larger apartment complexes.

“Obviously, with a large number of units put on a particular site, the cost per unit can come down,” Gabriel said. “What we can hope for is to do things in a smarter way in L.A., and what that means is to allow for densification of development.”

It’s this kind of talk that so dismays some Measure H foes.

Richard Close, president of the Sherman Oaks Homeowners Assn., the largest such group in the city, said he sees the bond leading to more density in places that are already dense enough.

“In addition to traffic and parking, there is protecting the feel of the community and the architectural nature of a community,” Close said. “It’s not about not wanting poor people or moderate-income people. It’s about protecting the physical condition and the quality of life in the neighborhood.”

Close said he thinks single-family districts in places like Sherman Oaks would inevitably attract some of the affordable housing because of market demands.

Rather than building affordable housing, he says the city should focus on rehabbing housing in poor neighborhoods he believes need the most help.

Measure H marks an unusual effort by the city to provide direct grants to developers for affordable housing. In the past, affordable housing was largely the domain of the federal government and restricted mainly to the poorest residents. But as federal dollars have grown more scarce, the burden has fallen on cities and counties, which are increasingly aiming to help the middle class as well.

According to the city Housing Department, there are more than 750,000 rental units in the city, and about 63,000 of them are considered “affordable” housing by the city.

Measure H does not set geographical guidelines on where new affordable housing might be placed, so some fear much of the money would go to many of the same poor neighborhoods that already have a large amount of government-assistance housing.

The intention is “to certainly spread these around,” said Allan Kingston, president and chief executive of Century Housing, a nonprofit affordable housing lender, and a co-chairman of the Measure H campaign. His firm has contributed nearly $387,000 to the campaign.

“We are hoping there will be a targeting of transit corridors and stations for bus and light rail,” Kingston said. “Those are where additional density is going to have to happen, so we can do something about the condition of people having to drive long distances.”

One reason why so much affordable housing is located in certain neighborhoods is because state and federal grant programs target areas where low-income residents live.

There is no such requirement with Measure H.

City Councilwoman Wendy Greuel, a proponent of Measure H, concedes that not all of her constituents want the affordable housing in their district or even want the bond to pass because of the property tax implications. Although she wants to see the housing get built citywide, she also says that affordable housing won’t work or be accepted everywhere in the district -- particularly in single-family neighborhoods.

“Our hope is that it’s going to go citywide,” she said. “Gone are the days when we concentrated in one place.”



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Housing Q & A

Los Angeles voters will consider Measure H, a $1-billion affordable housing bond issue, Tuesday.

Where would the money come from?

The $1-billion bond would be paid for through increased property taxes, with real estate taxes increasing by an average of $14.66 for every $100,000 of assessed value for a duration of 20 years.

Though backers say the average homeowner would pay $50 a year, critics believe the number is closer to $60.

How would that $1 billion be spent?

Developers would get $750 million in grants and loans to build affordable rental units, about a third of which would be set aside to help extremely low-income people, including the formerly homeless, over the next 10 years.

An additional $250 million would go toward a loan program to help some residents buy their first homes.

Who would qualify?

Most of that money for the affordable housing units would be aimed at households making up to 60% of the area median income, currently $56,200, according to city officials. But some money would be used for households making up to 80% of the AMI. That would mean a household making $44,960 a year or less would qualify.

The loan program would aid individuals and households making up to 150% of the AMI. That would mean a household making $84,300 a year or less would qualify.

Who is contributing money to the campaign in favor of Measure H?

Through last Friday, the Measure H campaign had raised almost $2.8 million. The campaign’s largest donors were developers, banks, mortgage companies and builders -- including BRE Properties Inc. of San Francisco and the Building Industries Assn., which each gave $25,000, and developer Rick Caruso, who gave $5,000. By far the biggest donor to Measure H has been Century Housing Corp., a Culver City-based nonprofit that has given almost $387,000.

What backers say

The city of Los Angeles faces a serious housing crisis. The bond measure would provide a reliable and stable source of funding to address the crisis. They say L.A. needs the bond money now because residents are being priced out of apartments.

What opponents say

The bond would unfairly burden property owners to build affordable housing, something the city itself should address. They also worry about huge apartment complexes coming into single-family neighborhoods.


Source: Los Angeles Times