LA County is short half a million affordable units: report

California Housing Partnership estimates that L.A. County needs around 517,000 more homes priced at very low- and extremely low-income levels

Los Angeles /
May.May 21, 2019 05:00 PM
California Housing Partnership CEO Matt Schwartz
California Housing Partnership CEO Matt Schwartz

Los Angeles County is drastically short on affordable homes and the funding needed to develop them, new research shows.

The California Housing Partnership estimates that L.A. County needs around 517,000 more homes priced at very low- and extremely low-income levels to provide housing for the roughly 750,000 renter households at those income levels.

CHP was created by the state in 1988 to study and help preserve California’s affordable housing stock. Its Housing Emergency Update report released this week depicts a dreadful picture of the county’s housing crisis.

The study found that 58 percent of low-income households are “cost-burdened,” meaning more than 30 percent of monthly income is paid towards housing. Around 14 percent put more than half their income towards housing.

A household is considered low-income if annual income is around 80 percent of L.A. County’s area median income, which this year is $73,100. It is calculated on a sliding scale: a person living alone making $58,500 qualifies, while a four-person household bringing in $83,500 also qualifies.

The study found that around 91 percent of households considered extremely low-income — making less than 50 percent of AMI — are cost-burdened. Four in five of those households pay more than 50 percent of their monthly income on housing.

A family of three would need to bring in around $79,000 — or around 107 percent of AMI — to safely budget in L.A. County for housings costs, childcare, and other expenses.

The CHP recommends that cities in L.A. County cap annual rent increases, which many have done in recent months. It also suggests providing rent subsidies for the lowest income residents living in non-profit-owned housing.

Municipalities could also provide funding to non-profit organizations to buy affordable housing at risk of market-rate conversion. Property owners have converted around 5,250 affordable units to market-rate since 1997, according to CHP.

On the development side, there are significantly fewer state and federal funds available to build housing today than there was a decade ago. L.A. County has lost around half a billion dollars in state and federal affordable housing funding over the last 10 years — a 70 percent decrease from $705 million available in FY 2008-2009 to around $209 million available in the FY 2017-2018.

Other sources of affordable housing funding have also dropped. Between 2016-2018, production of Low Income Housing Tax Credits dropped 31 percent. Those federal tax credits are traded by investors and ultimately fund development and maintenance of affordable housing. They fund anywhere between 20 to 70 percent of development costs for all below-market rate rental properties.

The 2017 tax overhaul indirectly devalued those credits, making less money available to developers.

The report praised the city of L.A.’s popular Transit Oriented Communities program, which provides development incentives for projects that incorporate affordable units near transit and suggested other cities could create similar programs.


Related Articles

arrow_forward_ios
Holos Communities' Cristian Ahumada, Jamboree Housing's Laura Archuleta
Long Beach loans developers $6.1M for affordable apartments
Long Beach loans developers $6.1M for affordable apartments
Wiseman Residential's Isaac Cohanzad and a rendering of 1600 East Venice Blvd (Facebook, Robert James Taylor Architects)
Wiseman Residential begins building 77 apartments in Venice
Wiseman Residential begins building 77 apartments in Venice
Weingart's Kevin Murray with rendering of 1405 South Broadway (Weingart Center, Getty)
Weingart seeks to build 335 affordable units in DTLA
Weingart seeks to build 335 affordable units in DTLA
Los Angeles Mayor Karen Bass, Homeless
LA Mayor Karen Bass launches outreach to house the homeless
LA Mayor Karen Bass launches outreach to house the homeless
Los Angeles County Supervisor Janice Hahn
LA County pledges support for city’s homelessness emergency
LA County pledges support for city’s homelessness emergency
A photo illustration of Los Angeles County Supervisor Hilda Solis and 1200 State Street in Los Angeles (Getty, Los Angeles Conservancy)
LA County seeks developer to turn hospital into housing
LA County seeks developer to turn hospital into housing
Karen Bass, homelessness, shelters, affordable housing, fast tracking
LA mayor fast-tracks homeless shelters and 100% affordable housing
LA mayor fast-tracks homeless shelters and 100% affordable housing
Renaissance Realty Group's Jamial Clark (Getty, Renaissance Realty Group, LA City Planning)
South LA apartment project near Metro line gets green light
South LA apartment project near Metro line gets green light
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...