Housing is a Holistic Issue

NEIGHBORHOOD POLITICS-As point person for improving the circumstances of those who live unhoused in Los Angeles, the Chief Administrative Officer (CAO) must ensure there is sufficient affordable housing available for all Angelenos, no matter their income.

This is a bigger challenge than it may first appear. 

Supportive housing for the homeless.

Supportive housing is housing with the addition of services intended to stabilize the lives of the rehoused – counseling and community support services, life skills and job training, ongoing case management – to ensure their full transition back to a productive life. 

The County generally provides services for the homeless, but the City of Los Angeles is responsible for finding them physical lodgings. 

It is essential that housing for chronically homeless people be coupled with the services they need. Putting a person in a room without support is a waste of everyone’s time and money. 

Many people who are homeless have jobs, sometimes several. So their needs might include help with rental applications and down payments as well as how to access childcare and health services. Others may need to be connected to addiction and mental health care, training, and education. 

Last fall, Richard Llewellyn, CAO and Chair of the Proposition HHH Administrative Oversight Committee, forwarded recommendations to issue letters of financial commitment for 112 supportive housing projects not to exceed $238,120,946. 

Since then the pandemic has impacted the progress of construction but the need continues and will only grow over time. 

Just how much will that cost? 

There are many soft costs in construction projects such as fees for architectural, engineering, and consultant services, the total running as high as 40% of the overall project cost. 

There are two ways to describe the cost per unit built with HHH funding. The first is the cost to the City for the loan under HHH. The second is the total cost to build a unit. 

The average allocation per unit under HHH is $150,000 whereas the total median cost of constructing a unit is in the range of $531,000. The cost of building with City funds comes with enhanced construction requirements, such as building to Americans with Disabilities Act (ADA) standards and the prevailing wage, and those raise construction costs above other building projects. 

Many factors affect the cost of construction projects. The current building boom has increased competition for land, labor, and materials. There are a limited number of construction companies that understand how to comply with the very complex HHH laws. 

In the current construction environment, companies have numerous projects to choose from and are less inclined to navigate City requirements for HHH projects. 

Container and prefabricated housing are innovative ways to expedite building and reduce costs. Unfortunately, there are a limited number of manufacturers. This leads to delays and ultimately increases the cost. 

Early loans provided under HHH required supplemental funding of $80,000 per unit because the Mental Health Services Act (MHSA) funding for housing revenue bonds for persons in need of mental health services as approved under Proposition 2 in 2018 was not yet in place. 

The City expects to receive about $700 million of the $2 billion in bonds issued but these will need to be repaid. 

Several developers have applied for MHSA funds to reimburse the City’s supplemental subsidies which will free up funding for additional city projects. Early repayment of loans should be incentivized in order to fund additional projects. 

Income-restricted units. 

Measure JJJ, passed by Angelenos in 2016, required developers set aside affordable housing units in all projects for which they received zoning dispensations. Thousands of income-restricted units were built under the City’s Transit Oriented Communities Affordable Housing Incentive in return for the City waiving building height and parking space requirements. 

However, there is currently no effective way to ensure these units actually go to lower income earners. Without adequate monitoring, these concessions could constitute a giveaway to the developers and negatively impact neighborhoods and residents’ quality of life. 

The City needs to initiate a strong centralized listing system tied to LA County’s Coordinated Entry System to oversee the use of affordable housing, and appropriate placement of the homeless and those needing income-restricted units on a timely basis. It could also address shared and other co-housing options. 

The City should mandate that property managers list all covenant-restricted unit vacancies on this centralized waiting list, and that people on the Housing Authority’s Section 8 waiting list be automatically linked to such vacancies. 

This would also address the persistent concern about how to effectively monitor and enforce that units reserved for low-income individuals and families are actually occupied by those who are eligible. 

Affordable housing-for-all. 

A major issue in Los Angeles is that affordability impacts almost all segments of the housing market, not just those at the bottom. This will be especially true in the coming months due to Angelenos’ loss of income due to the pandemic coupled with demand and the cost to service mortgages keeping housing prices high. 

So long as there is pressure on the ability of the upper middle class and above to rent and purchase homes that they can afford, they will outbid existing residents for properties previously perceived as middle and working class. This further disrupts the social fabric of the City, pushing those with lesser incomes into even poorer neighborhoods and driving minimum-wage workers out of the City or onto its streets. Propelling gentrification. 

Homelessness in Los Angeles is rapidly becoming less an issue of substance abuse or mental impairment and more one of income not keeping up with the cost of basic needs. 

The costs are vast. The social and economic costs of not addressing them are vaster. 

This is a holistic problem and requires holistic solutions. Which is why it has ended up in the hands of the CAO whose purview extends to all areas of the City’s fiscal well-being as well as ensuring available resources provide the greatest benefit possible to the residents of the City of Los Angeles. 

The foregoing is derived from meetings the Budget Advocates held on October 17th and 30th with the CAO and his senior staff including Meg Barclay, Principal Project Coordinator for the City’s Homeless Initiative.


(Liz Amsden is a member of the Budget Advocates, an elected, all volunteer, independent advisory body charged with making constructive recommendations to the Mayor and the City Council regarding the Budget, and to City Departments on ways to improve their operations, and with obtaining input, updating and educating all Angelenos on the City’s fiscal management.) Photo: AFP / Getty Images. Prepped for CityWatch by Linda Abrams.