Down payment on L.A.'s future
LOS ANGELES homeowners have been enthralled and enriched by the 128% jump in home values over the last five years. For the less fortunate, however, steep home prices and rent increases -- a direct result of the supply lagging behind our growing population -- have been disastrous.
On Nov. 7, Los Angeles voters can help solve our city’s housing shortage by approving Proposition H, an initiative that would authorize the city to borrow $1 billion to promote affordable housing over a 10-year period.
Los Angeles used to be one of the more affordable American cities. Today, fewer than one in nine Angelenos earn $100,000 a year or more, the income necessary to afford a median-priced single family home. And renters? Twenty-nine percent of them pay more than half their income in rent.
Proposition H’s $1 billion will not solve all our housing problems. It will, however, through a combination of grants and loans at below-market interest rates to for-profit and nonprofit developers, lead to the construction of thousands of units of housing. These homes will serve a wide spectrum, from the poor to the aspiring middle-class homeowner.
Affordability is not just a problem confronting the estimated 48,000 homeless in the city. Working families are affected as well. As dean of the UCLA School of Law, I employ more than 200 professors, administrators and clerical workers. Each year it becomes harder for UCLA to attract qualified employees. Those we do hire must live farther and farther from our Westwood campus.
Each dollar of bond revenue can leverage more resources from the federal and state governments as well as private financing. It is estimated that more than 10,000 housing units can be added to the city’s stock over 10 years.
Public investment in housing also improves our neighborhoods. Before coming to UCLA, I ran the real estate research center at New York University and studied New York’s $5.2-billion capital program for housing. Over 15 years, New York built or rehabilitated more than 170,000 housing units. We found that investment in new and rehabilitated housing stabilized neighborhoods, leading to substantially increased house values nearby.
To fully benefit from Proposition H, Los Angeles also needs to make home construction itself more efficient and less expensive. Among the likely culprits: zoning rules that limit density, building codes that mandate the use of unnecessarily expensive materials and practices, labor work rules that generate waste, and environmental review practices that generate delay, paperwork and lawsuits.
If we do not make progress in solving our housing crisis, the future of Los Angeles will be at risk. Employers will need to pay workers more. Businesses will cease to be competitive. The entire city’s economy will suffer. Tax revenues will dry up, and services will decline. Proposition H is a down payment on our future.