Los Angeles currently faces the worst housing crisis in the city’s history, and the clock is ticking on finding solutions—even incremental ones that can have an immediate impact.
Last week, the Los Angeles City Council took a step in the right direction when it approved two critical housing ordinances. One allows for relaxed zoning on motel and hotel conversions to provide supportive and transitional housing for homeless individuals. The other streamlines the approval process for qualifying Permanent Supportive Housing (PSH) projects, significantly reducing the average time it takes for a PSH developer to begin construction.
The Council should be commended for its swift action to help beef up housing options in a region that has one of the nation’s highest homeless populations. Both measures have the potential to significantly speed up housing for our city’s most vulnerable residents.
But our housing crisis goes beyond finding solutions for the homeless. The region is also greatly in need of more affordable housing options across the board for all its residents – whether home buyers or renters.
The median home price in Southern California reached an all-time high last December of $505,000, continuing five years of upward momentum that is putting home ownership farther out of reach for many. Those looking to rent don’t fare much better. Los Angeles is currently the sixth most unaffordable large metropolitan rental market in the U.S.
To the region’s credit, there has been some progress, thanks to innovative programs implemented over the past year that show great promise for helping address the overall housing crisis.
Measure H, passed last year, will generate $355 million annually to support rapid rehousing, permanent supportive housing, and a range of services to prevent homelessness and support housing retention. This bond measure was approved with 69 percent of the vote less than six months after voters approved Proposition HHH, which committed $1.2 billion to support the construction of 10,000 units of housing for homeless individuals. These funds will dramatically increase support for housing, as well as the mental health, case management, and prevention services needed to get—and keep—people off the streets.
Another innovative example is Just in Reach, aimed at reducing homelessness and jail recidivism through the County’s first Social Impact Bond, which provides a unique financing structure in which private funders invest capital to fund diversion and reentry programs upfront. After four years, Los Angeles County pays investors back, but only if the program achieves predetermined outcomes. If not, investors lose their money. This is a great example of a high-risk/high-return intervention that has potential.
Los Angeles is also advancing multiple new interventions to finance the building of affordable housing developments. This includes the City’s recently approved linkage fee, which is predicted to raise $100 million annually to produce or preserve approximately 1,700 units of affordable housing each year. In this model, builders pay a fee ranging from $1 – $15 per square foot depending on the location within the City and the type of project being developed. One way of avoiding the fee is to include a designated amount of affordable, low-income, or moderate-income housing in the project from the onset, further advancing the city’s goal of getting more affordable units built.
But while these innovative strategies—as well as the housing ordinances just passed by the LA City Council—are a good start, it will be critical that the region not get bogged down in one-off, singular and sequential solutions.
Rather, it’s going to take a diverse portfolio of interventions that collectively operate in a broader, comprehensive “social innovation framework” that can catalyze rapid change across multiple programs and policies affecting housing in the region. This includes coordinated policies and programs that not only address homelessness and its causes, but also help expand affordable housing and housing for the region’s workforce too. Our housing crisis is big and complex and demands a big picture approach.
With the broader framework in mind, policymakers, housing scholars, service providers and others will gather at USC this month to bring an innovation lens to the city’s housing and homelessness crisis, with an eye toward building on the momentum of the policies adopted to date. But until the more comprehensive framework takes shape, it’s measures like those approved last week by the LA City Council that will help with some immediate housing relief. It’s a move in the right direction.