{"id":4912,"date":"2020-09-06T19:12:19","date_gmt":"2020-09-07T02:12:19","guid":{"rendered":"https:\/\/abundanthousingla.org\/?p=4912"},"modified":"2020-09-06T19:25:25","modified_gmt":"2020-09-07T02:25:25","slug":"affordable-housing-estimate","status":"publish","type":"post","link":"https:\/\/abundanthousingla.org\/affordable-housing-estimate\/","title":{"rendered":"How Many Affordable Homes Does L.A. County Need?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">California\u2019s housing crisis is a product of scarcity. For decades, our state and the Los Angeles region have allowed too few homes to be built, especially in transit- and job-rich areas, causing a toxic brew of escalating rents, displacement, segregation by race and income, and homelessness. The housing shortage is particularly acute among lower-income households; last year, <\/span><a href=\"https:\/\/1p08d91kd0c03rlxhmhtydpr-wpengine.netdna-ssl.com\/wp-content\/uploads\/2020\/06\/Los_Angeles_Housing_Needs_Report_2020-HNR.pdf\"><span style=\"font-weight: 400;\">40% of L.A. County households with very low incomes<\/span><\/a><span style=\"font-weight: 400;\"> (earning &lt;50% of the <\/span><a href=\"https:\/\/www.hcd.ca.gov\/grants-funding\/income-limits\/state-and-federal-income-limits\/docs\/Income-Limits-2019.pdf\"><span style=\"font-weight: 400;\">area median income<\/span><\/a><span style=\"font-weight: 400;\">) spent more than half their income on housing.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To fully address the need for housing that is affordable to lower-income families, we should first know <\/span><b>how<\/b><span style=\"font-weight: 400;\"> large the need is. Governments and policy analysts have reached different estimates of L.A. County\u2019s affordable housing shortfall. Here, we\u2019re defining \u201caffordable housing\u201d as <\/span><b>homes that cost less than 30% of monthly income, for households earning &lt;80% of AMI.<\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Through the Regional Housing Needs Assessment process (RHNA), the Southern California Association of Governments (SCAG) has instructed the cities of L.A. County to plan for <\/span><b>341,000 homes<\/b><span style=\"font-weight: 400;\"> by 2030 that are affordable to very low income (&lt;50% AMI) and low income (50-80% of AMI) households. The <\/span><a href=\"https:\/\/1p08d91kd0c03rlxhmhtydpr-wpengine.netdna-ssl.com\/wp-content\/uploads\/2020\/06\/Los_Angeles_Housing_Needs_Report_2020-HNR.pdf\"><span style=\"font-weight: 400;\">California Housing Partnership recently estimated<\/span><\/a><span style=\"font-weight: 400;\"> that L.A. County needs <\/span><b>500,000 more affordable homes, just to meet the needs of very low income households<\/b><span style=\"font-weight: 400;\"> (&lt;50% of AMI).<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Abundant Housing LA estimates that L.A. County has a deficit of <\/span><b>over 700,000 homes<\/b><span style=\"font-weight: 400;\"> that are affordable to very low income (&lt;50% AMI) and low income (50-80% of AMI) households. This estimate is based on SCAG\u2019s methodology for determining cities\u2019 RHNA targets, with adjustments to reflect full housing needs. Here\u2019s how we arrived at this estimate:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">First, <\/span><a href=\"https:\/\/abundanthousingla.org\/abundant-housing-la-requests-that-scags-rhna-be-2-7-million-homes-or-higher\/\"><span style=\"font-weight: 400;\">we estimated that <\/span><b>2.7 million more homes<\/b><\/a><span style=\"font-weight: 400;\"> are needed throughout Southern California, across all income levels, in order to fully eliminate household overcrowding and rent burden.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Then, we allocated the regional total across individual cities, based on their housing costs, access to jobs, and access to transit. This allowed us to estimate each city\u2019s total housing need. This allocation is similar to SCAG\u2019s methodology for distributing the RHNA across Southern California\u2019s cities.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Finally, we applied SCAG\u2019s percentage breakdown of individual cities\u2019 housing needs by income bucket to our city-level estimates. This allowed us to forecast each city\u2019s housing need <\/span><b>by income bucket.<\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-4913\" src=\"https:\/\/abundanthousingla.org\/wp-content\/uploads\/2020\/09\/imageLikeEmbed.png\" alt=\"\" width=\"1434\" height=\"802\" srcset=\"https:\/\/abundanthousingla.org\/wp-content\/uploads\/2020\/09\/imageLikeEmbed.png 1434w, https:\/\/abundanthousingla.org\/wp-content\/uploads\/2020\/09\/imageLikeEmbed-600x336.png 600w, https:\/\/abundanthousingla.org\/wp-content\/uploads\/2020\/09\/imageLikeEmbed-300x168.png 300w, https:\/\/abundanthousingla.org\/wp-content\/uploads\/2020\/09\/imageLikeEmbed-1024x573.png 1024w, https:\/\/abundanthousingla.org\/wp-content\/uploads\/2020\/09\/imageLikeEmbed-768x430.png 768w, https:\/\/abundanthousingla.org\/wp-content\/uploads\/2020\/09\/imageLikeEmbed-1080x604.png 1080w\" sizes=\"(max-width: 1434px) 100vw, 1434px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">Producing 700,000 homes would be expensive under any circumstances, but is particularly pricey in California because of the <\/span><a href=\"https:\/\/www.latimes.com\/homeless-housing\/story\/2020-04-09\/california-low-income-housing-expensive-apartment-coronavirus\"><span style=\"font-weight: 400;\">high cost of land, labor, and construction materials, as well as fierce neighborhood opposition to new affordable housing<\/span><\/a><span style=\"font-weight: 400;\">. Assuming an average per-unit cost of $420,000, it would cost nearly <\/span><b>$300 billion<\/b><span style=\"font-weight: 400;\"> to construct 700,000 units of affordable housing, or <\/span><b>$37 billion per year<\/b><span style=\"font-weight: 400;\"> throughout the upcoming 8-year RHNA planning cycle. <\/span><a href=\"https:\/\/docs.google.com\/spreadsheets\/d\/13QV6pZ6aEvAXjTbNeT0UcMHM1KmCDJ2u4ashEloO7Xs\/edit?usp=sharing\"><span style=\"font-weight: 400;\">This spreadsheet<\/span><\/a><span style=\"font-weight: 400;\"> contains additional detail and sourcing for this estimate.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Everyone has the right to affordable housing that meets their needs, and so it is crucial that our leaders commit to producing this affordable housing. To that end, Abundant Housing LA is calling for <\/span><a href=\"https:\/\/abundanthousingla.org\/roadmap\/\"><span style=\"font-weight: 400;\">$100 billion per year in state funding for housing<\/span><\/a><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While governments must play a major role in funding affordable housing production, they can\u2019t meet this need alone. Even if local, state, and federal governments were to fund 20% of the capital costs for affordable housing, relying on nonprofit and private capital for the remaining 80%, the cost to governments would still be <\/span><b>$60 billion<\/b><span style=\"font-weight: 400;\">, or <\/span><b>$7.5 billion per year.<\/b><span style=\"font-weight: 400;\"> As a point of comparison, the L.A. County <\/span><a href=\"https:\/\/lacounty.gov\/budget\/\"><span style=\"font-weight: 400;\">annual budget is $35 billion<\/span><\/a><span style=\"font-weight: 400;\">, and the City of Los Angeles has proposed an annual budget of <\/span><a href=\"https:\/\/www.latimes.com\/california\/story\/2020-04-20\/coronavirus-garcetti-budget-story-2020-2021-furloughs-cuts\"><span style=\"font-weight: 400;\">$10.5 billion<\/span><\/a><span style=\"font-weight: 400;\"> this year. Unfortunately, the COVID-19 related economic downturn has put additional pressure on government budgets; the City of Los Angeles is <\/span><a href=\"https:\/\/www.latimes.com\/california\/story\/2020-09-02\/la-city-employee-furloughs-and-retirement-payouts\"><span style=\"font-weight: 400;\">close to declaring a fiscal emergency<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Given these significant challenges, an ambitious, \u201call of the above\u201d policy strategy is needed in order to build 700,000 more affordable homes throughout L.A. County. Local and state governments should raise new revenue sources and create housing on municipally-owned property, while also implementing major land use reforms and supporting efforts to reduce the astronomical cost of building housing.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">An \u201call of the above\u201d effort should include:<\/span><b><\/b><\/p>\n<ul>\n<li><b>Raising revenue by fairly taxing homeowners &#8211; <span style=\"font-weight: 400;\">Because of <\/span><a href=\"https:\/\/en.wikipedia.org\/wiki\/1978_California_Proposition_13\"><span style=\"font-weight: 400;\">Proposition 13<\/span><\/a><span style=\"font-weight: 400;\">, which caps property taxes at an artificially low level, and the state mortgage interest deduction, California\u2019s tax system is skewed in favor of homeowners and other property owners (who tend to be wealthier than average). <\/span><a href=\"https:\/\/www.sfchronicle.com\/politics\/article\/Californians-home-mortgage-deduction-would-be-14960585.php#:~:text=California%20now%20allows%20homeowners%20to,to%20the%20Franchise%20Tax%20Board.\"><span style=\"font-weight: 400;\">Eliminating the mortgage interest deduction<\/span><\/a><span style=\"font-weight: 400;\">, introducing <\/span><a href=\"https:\/\/www.lewis.ucla.edu\/research\/transfer-tax-reform\/\"><span style=\"font-weight: 400;\">a transfer tax on the sale of property<\/span><\/a><span style=\"font-weight: 400;\">, and passing <\/span><a href=\"https:\/\/www.yes15.org\/\"><span style=\"font-weight: 400;\">Proposition 15<\/span><\/a><span style=\"font-weight: 400;\"> this November (which would tax commercial properties at their fair market value) could raise billions in new funding for affordable housing production.<\/span><\/b><\/li>\n<li><b>Producing housing on city and county owned land &#8211; <span style=\"font-weight: 400;\">The City of Los Angeles alone <\/span><a href=\"https:\/\/drive.google.com\/file\/d\/1sK8UE4A8Z1765_WbIObUDyDQQ013zdhj\/view?usp=sharing\"><span style=\"font-weight: 400;\">owns 111 parking lots<\/span><\/a><span style=\"font-weight: 400;\">, many of which are located in vibrant neighborhoods with strong demand for new housing. Local governments should donate some parking lots and other public land to affordable housing nonprofits, which will reduce the cost of producing affordable housing. Local governments should also lease other parking lots to builders of for-profit housing, in return for an annual payment. This will create more housing overall, while also generating a stable revenue stream that can directly finance affordable housing production.<\/span><\/b><\/li>\n<li><strong>Major land use and zoning reforms<\/strong> &#8211; <span style=\"font-weight: 400;\">It is illegal to build anything other than a single-family home on <\/span><a href=\"https:\/\/www.nytimes.com\/interactive\/2019\/06\/18\/upshot\/cities-across-america-question-single-family-zoning.html\"><span style=\"font-weight: 400;\">75% of the residentially-zoned land<\/span><\/a><span style=\"font-weight: 400;\"> in the City of Los Angeles. This ban on apartments greatly limits opportunities for affordable housing production, while also perpetuating historical patterns of exclusion. Cities must legalize apartments, especially in high-opportunity neighborhoods, and introduce <\/span><a href=\"https:\/\/inclusionaryhousing.org\/designing-a-policy\/land-dedication-incentives\/density-bonus\/#:~:text=The%20density%20bonus%20is%20the,used%20by%20inclusionary%20housing%20programs.&amp;text=Typically%20programs%20allow%20increases%20of,the%20provision%20of%20affordable%20housing.\"><span style=\"font-weight: 400;\">density bonus programs<\/span><\/a><span style=\"font-weight: 400;\"> (which allow taller apartment buildings in return for setting aside some units for lower-income households). This will directly create homes, both market-rate and deed-restricted affordable, at no cost to local governments.<\/span><\/li>\n<li><strong>Reducing building costs<\/strong> &#8211; <span style=\"font-weight: 400;\">High and fast-rising building costs are a major obstacle in affordable housing production. Earlier this year, <\/span><a href=\"http:\/\/ternercenter.berkeley.edu\/uploads\/LIHTC_Construction_Costs_March_2020.pdf\"><span style=\"font-weight: 400;\">the Terner Center at UC Berkeley<\/span><\/a><span style=\"font-weight: 400;\"> found that the cost per square foot of building affordable housing in California had risen 30% between 2016 and 2019, and that average development costs were the highest in the nation. <\/span><a href=\"http:\/\/ternercenter.berkeley.edu\/uploads\/Hard_Construction_Costs_March_2020.pdf\"><span style=\"font-weight: 400;\">Faster permitting, simpler financing structures, elimination of on-site parking requirements, and elimination of local development fees<\/span><\/a><span style=\"font-weight: 400;\"> would all reduce the cost (and speed up the construction) of affordable housing development.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">With an affordable housing gap this large, Los Angeles County can\u2019t afford to tinker around the margins. The road to 700,000 more affordable homes starts with a commitment to bold, transformative solutions from our policymakers.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>California\u2019s housing crisis is a product of scarcity. For decades, our state and the Los Angeles region have allowed too few homes to be built, especially in transit- and job-rich areas, causing a toxic brew of escalating rents, displacement, segregation by race and income, and homelessness. The housing shortage is particularly acute among lower-income households; [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":4916,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","inline_featured_image":false,"footnotes":""},"categories":[38],"tags":[90,139,55],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How Many Affordable Homes Does L.A. 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The housing shortage is particularly acute among lower-income households; [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/abundanthousingla.org\/affordable-housing-estimate\/\" \/>\n<meta property=\"og:site_name\" content=\"Abundant Housing LA\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/abundanthousingLA\/\" \/>\n<meta property=\"article:published_time\" content=\"2020-09-07T02:12:19+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-09-07T02:25:25+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/abundanthousingla.org\/wp-content\/uploads\/2020\/09\/With-an-affordable-housing-gap-this-large-Los-Angeles-County-can\u2019t-afford-to-tinker-around-the-margins.-1.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"536\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Anthony Dedousis\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@anthonydedousis\" \/>\n<meta name=\"twitter:site\" content=\"@AbundantHousing\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Anthony Dedousis\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/abundanthousingla.org\/affordable-housing-estimate\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/abundanthousingla.org\/affordable-housing-estimate\/\"},\"author\":{\"name\":\"Anthony Dedousis\",\"@id\":\"https:\/\/abundanthousingla.org\/#\/schema\/person\/9bc1b5485921041a3e20e5146cb63e3b\"},\"headline\":\"How Many Affordable Homes Does L.A. 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