Affordable Housing

AffordableHousing

April 2, 2015
Women’s City Club

Photos are here

The April League Day was devoted to learning the status of affordable housing in communities after the complete loss of state redevelopment funds and the severe reduction of federal affordable housing monies. Pansy Yee, Manager, LA County Community Development Commission; Steve Zovak, Director, Glendale Housing Department; and William Huang, Director, Pasadena Housing and Career Services Department, were the panelists.  All agreed that the region is the midst of a perfect storm, with incomes having increased approximately 9 percent in the last few years, while rents have escalated 22 percent.

Pasadena

Pasadena has a population of approximately 135,000. Director Huang stated that Pasadena’s affordable housing funds have been reduced by 85 percent, resulting in a permanent loss of 50 percent of the Housing Department staff. Notwithstanding these constraints, Pasadena was given an award by the Urban Land Institute for its housing policies. Pasadena has seventy units of senior housing (Heritage Square) and twenty units of permanent supportive housing for formerly homeless families (Mar Vista) either presently under construction or in the pipeline. With the loss of state and federal funding, the likelihood of developing additional units is slim.

Pasadena has adopted an inclusionary housing ordinance, which has resulted in 446 units set aside for low and moderate income families, as well as $17 million of in lieu fees that are used to build/rehabilitate affordable housing. There are another 250 inclusionary units in the pipeline. The city also administers 1,436 rental subsidy vouchers, of which 620 are held by seniors, 408 are held by families with children, and 893 are held by persons with disabilities. (Some holders fall into more than one categories.) Also, homelessness has been reduced from 1,200 persons to 632 persons on any given night. The reduction is the result of focusing on prevention and rapid re-housing programs.

In addition, the Department administers programs that benefit low income homeowners, programs that:
•    Provide ramps and house painting free to low income homeowners,
•    Reduce utility rates and weatherization programs,
•    Provide 1.5% loans for amounts up to $75,000 to be used for remodeling.
    Further, the Department administers the PasadenaHousingSearch.com website, which has assisted in 13,000 successful housing searches.

On the downside,
•    The city has also adopted a second unit ordinance that is not very practical—for example, the lot size must be at least 15,000 square feet. Director Huang noted that even if the standards were made more flexible, property owners must be willing to pay the entire cost of building the unit. In addition, there is no guarantee that the unit would be used for affordable housing.
•    There is not funding for housing for youth, especially emancipated foster children, most of whom become homeless within a year of emancipation. Huang was associated with two projects that integrated emancipated youth with seniors and families with children. These were successful programs.
•    Pasadena does not have rent control or rent stabilization. Adopting rent control represents a thorny, political issue.

Glendale

Glendale has a population of approximately 200,000 persons. It has a continuum of housing, from emergency shelters to transitional housing to affordable rental and for-sale housing. Glendale presently has approximately 500 units under construction, at various stages of development.

Director Zovak noted that Glendale received approximately $6 million per year in redevelopment funds for affordable housing, which is no longer available. When the redevelopment monies were eliminated, the state reportedly allowed municipalities to honor continuing obligations to developers, with the state providing payments to municipalities every six months. The state has not actually made all of those payments and litigation has ensued.

Glendale’s federal HOME money, to be used for housing developments for very low income families, has been reduced from $2 million/year to $900,000/year. In addition, HUD is increasingly taking a “use of lose” approach to housing development funding, which is a problem because some programs have restrictive requirements. The redevelopment funding was much less restrictive.

Glendale has had about 1,300 units developed with redevelopment funds. The first units were developed approximately thirty years ago, and the provisions that restrict the income level of persons who reside in the units are nearing expiration. These units could revert to charging market rate rents if these restrictions are lifted.
Director Zovak reported on a number of projects in various stages of construction:
•    A 44-unit project for veterans with families
•    The reuse of the old YWCA building, which has a lack of parking. It is being redeveloped into a 9-unit project transitional housing project.
•    A 70-unit artists’ colony (at the corner of Wilson and Louise) that are live/work dwellings.

Glendale partners with both nonprofit and for-profit developers. It has undertaken a number of projects with Habitat for Humanity, which uses a model that allows low income families to become homeowners.

Glendale has 1,596 Section 8 vouchers that are used to subsidize rents for very low income families. Of late, approximately forty of these vouchers have not been used because of a reduction in HUD funding. When Glendale last opened its Section 8 waiting list more than a decade ago, it received 12,500 applicants; it still has 2,000 on the list. It will not soon be opening the list for new applicants.

Glendale does not have inclusionary housing or second unit ordinance. It also does not have rent control or housing for emancipated youth. Zovak could not offer a lot of information on his city’s programs to house persons who are homeless because these programs are not under his supervision. When the city experienced a reduction in housing funds, the department was reorganized, and homeless services were placed under the Parks Department.

Los Angeles County

Manager Pansy Yee presented primarily on the availability of county housing funding, funds which she oversees. The supervisors made these funds available in recognition that:
•    Los Angeles County is the least affordable metropolitan area in the United States
•    Fifteen neighborhoods in the Fifth District are the most crowded in region; El Monte, Azusa, and San Gabriel have some of these neighborhoods
•    25 percent of county residents pay more than 50 percent of their incomes on housing
•    In order for a resident to afford the rent for an average two-bedroom apartment—that is $1,398/month—a wage earner would have to make 3.5 times the current minimum wage, or $26.88/hour
•    57,000 county residents are homeless: 13 percent of these are families with children and 10 percent are veterans

To effectively meet these needs, the county would have to commit $40-$50 million/year, amounts which significantly exceed the county’s fiscal capacity. In response to these conditions, the county has set aside $89.9 million to be distributed over five years (2013-2017). These are competitive funds, to be leveraged against tax credit and other funds. In addition, each supervisor has separate funds to address homelessness.

County funds are designed to target households with very low incomes. Fifty percent of the funds are to be used to combat homelessness and/or for special needs households. The county funds cannot be used to build housing within 500 feet of a freeway. Few developers have accessed county funds to build in the League’s service area.

Los Angeles County works with a variety of for-profit and nonprofit developers and collaborates with the Public Health Department and the Department of Children and Family Services. The County does not have inclusionary housing ordinance but does have a second unit ordinance that is significantly more flexible than Pasadena’s. However, the ordinance has not resulted in many units being produced. It also does not have rent control or specific housing for emancipated youth.

This presentation was the first in a series designed to help us better understand the current status of affordable housing in the League’s service area.

    —Michelle White, LWV-PA Affordable Housing Consultant