Market-rate condos for the homeless? It costs just as much under LA bond program

Labor costs, a slow permitting process, and litigation is driving up development costs

Oct.October 08, 2019 10:05 AM
LA City Controller Ron Galperin and a groundbreaking ceremony for the first development funded by Prop HHH in December 2017 (credit: Office of Mayor Eric Garcetti)
LA City Controller Ron Galperin and a groundbreaking ceremony for the first development funded by Prop HHH in December 2017 (credit: Office of Mayor Eric Garcetti)

Affordable housing under Los Angeles’ signature bond program simply isn’t affordable. In fact, it costs nearly as much as a market-rate condominium or a single-family home, according to L.A. City Controller Ron Galperin.

His office released an audit of Proposition HHH, the $1.2 billion affordable housing bond program, on Tuesday. It found that the 1,000-plus units funded through the 2016 ballot measure could exceed $600,000 per unit, making it unlikely that the goal of 7,000 permanent homes could be met.

Galperin implored the city to reduce costs, suggesting that it utilize modular construction methods, shared housing, and simplified financing. Any savings should go toward the construction of shelters and service facilities for the homeless, he said, according to the L.A. Times.

To construct affordable units, the city has sought to combine HHH bond funds, affordable housing tax credits, as well as federal and state dollars. The goal was to put $140,000 towards each unit, but costs were already up to around $151,000 per unit as of April. Part of the reason for the increase is because housing tax credits have been devalued and other government sources have been reduced.

Galperin’s audit mostly pegged increased costs on regulatory barriers, a long and expensive permitting process, high labor costs, and litigation against city efforts to make the permitting process faster.

Galperin said through a spokesperson that his office is “not saying we should be ashamed of HHH.”

“We’re saying we have a program that is not keeping pace with the crisis at hand,” he said. “We need to figure out what changes can be made so we can better fulfill the intention voters had when they approved this proposition.”

The city has funded around 5,400 HHH units as of June, but none have been built. As of June, 17 units were under construction and 59 units were in predevelopment. [LAT]Dennis Lynch

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