CommentsGUEST WORDS--Despite the heartfelt support of Los Angeles residents to house the homeless with their votes for Proposition HHH and Measure H, the math and housing model underpinning the city’s plans will leave over 20,000 people on Los Angeles’ streets for the next ten years.
Even though there are roughly 25,000 people on the street every night in the City of Los Angeles, Proposition HHH never purported to produce more than 10,000 units of permanent supportive units (i.e., with services) and affordable housing over ten years, at a cost of $1.9 billion, counting the interest. So, on its face, HHH alone would have left 15,000 people on the street for 10 years. And this does not account for the thousands already in temporary shelters or living in vehicles who also need permanent housing.
Since its passage HHH’s purchasing power has been reduced dramatically by increases in construction costs and other factors. Reports show that the $247 million in HHH funds allocated so far will produce about 1,466 permanent supportive units. Extrapolating this data over the life of Prop. HHH shows the city can only produce about 5,686 units from HHH, not 10,000.
This assumes, however, that tax credits, which account for 20% to 70% of each project’s budget, will be bought by corporate investors. As reported in the LA Times several months ago, corporate investors are walking away from tax credits due to their much lower tax burden under the recent $1.5 trillion federal tax reduction act. They simply don’t need the credits to improve their bottom line. If tax credit underwriting diminishes or disappears as expected, the city will see even those 1,466 approved units at risk of not being built, which is already happening in other states.
To the extent that affordable housing developers and city leaders have to double tap the only local source available, Prop. HHH, the total build out will drop below 5,686 units. For example, using 50% as the average percentage of project funding deriving from tax credits, the loss of half of the previously anticipated tax credit funds would lower the total units that could be built by HHH to 4,264.
There are two alternatives to address these gaps. The first is for the State of California to ride to the rescue and provide the funds to cover increased construction costs and to replace all lost tax credit funds. While there is talk in Sacramento of directing some of the State’s current budget surplus to fund homeless housing, it is highly unlikely that these funds, after being spread statewide, will allow Los Angeles to build the full complement of 10,000 units.
The second option is previewed in a recent report by the Los Angeles Homeless Services Authority (LAHSA). It assumes thousands more permanent placements in market-rate housing using local and federal rent subsidies and an expansion of rapid re-housing, i.e., quickly identifying newly homeless individuals through the Coordinated Entry System (CES) and marshalling their own resources along with any needed temporary vouchers or rent subsidies to get them off the street as soon as possible.
This approach faces two obstacles: the dearth of market-rate housing and the fact that Los Angeles’ attractive weather and now very public commitment to house the homeless has produced an in-flow from other parts of the state and the nation. (For example, the former director of the Teen Project in Venice told me that over 70% of the young people his agency counseled were from out-of-state.)
In any event, if the city continues to largely pursue efficiency units with kitchens and bathrooms (56% of funded units to date under HHH) or 500 to 600 sq. foot one-bedroom apartments (32% of funded units), I expect that roughly 20,000 people will be left on the street for the next ten years. This is not what the voters thought they were getting.
At one time there were 15,000 single room occupancy (SRO) units in hotels in downtown Los Angeles. These were 80 to 120 sq. foot apartments and did not have attached bathrooms – toilets and showers were down the hall. They were built between 1890 and 1930 to house railroad employees and itinerant workers, only later in the last century becoming the housing of last resort for the indigent. The SRO Housing Corp., a non-profit set up years ago to restore and operate these buildings, estimates there are 5,500 SRO units left today in and around Skid Row. (The rest were lost years ago when owners decided to demolish them instead of laying out the funds to meet then-new city structural, safety and health codes.)
Another model that is successful in generating far more beds than the model favored by traditional housing providers is the collaborative housing developed by SHARE!, a non-profit, which typically houses four former homeless people in two-bedroom apartments, dormitory-style.
While some city council members engage in surreal proposals to house all the homeless by December of this year, I believe the city should redirect the bulk of HHH funds to replace the roughly 10,000 SRO units which were lost. It is clear that the city can house many thousands more in SROs than with the traditional one-bedroom, 600 sq. foot model or even 350 sq. foot efficiency apartments.
The city should also set a limit on what it will pay for land so that the most efficient use is made of every HHH dollar. For example, it should abandon plans to put 136 apartments – of which over half are over 600 sq. feet - on some of the priciest land in Los Angeles one block from the beach in Venice. This land, currently a large city parking lot serving beach visitors, would fetch $50 to $90 million depending on the building entitlements the city allowed a developer. Non-profits granted these funds could build six or seven times as many SRO units on less expensive land elsewhere in the city. This would house 816 people instead of just 136.
To honor both those suffering on the streets and the taxpayers who in good faith voted to tax themselves to help them get off the street, city leaders must make an immediate course correction to downsize apartment size to increase the number who can be rescued.
(Mark Ryavec, a former Legislative Analyst for the City of LA, served as staff to Mayor Tom Bradley’s Citizens Committee on the Redevelopment of the Central Business District and is currently president of Venice Stakeholders Association.)
-cw
