COVID-19 exposes the utter dysfunction plaguing affordable housing development in California

To make matters worse, as a result of the virus, more people will need housing, tax revenue could dry up, and labor shortages could worsen

Los Angeles /
Apr.April 09, 2020 10:36 AM
The coronavirus pandemic could worsen California’s affordable housing crisis
The coronavirus pandemic could worsen California’s affordable housing crisis

UPDATED, April 13, 8:52 a.m.: The coronavirus pandemic will likely heighten the need for affordable housing and worsen the already extreme shortage of it in California.

The impacts of the virus will further test a broken development system, one defined by sky-high labor costs, lengthy environmental reviews, expensive materials, a hodgepodge of state agencies, litigious NIMBY’s and opposition-minded local governments.

The loss of jobs in the state means fewer people can afford the high cost of both renting and buying in California, but the financial and political system that supports affordable housing production is likely to be stressed as well, according to the Los Angeles Times.

A pandemic-weakened economy means lower government tax revenue. That likely means a shallower pool of government funding for affordable housing. That funding makes up a significant chunk of the money affordable developers need to build below-market-rate units.

Those units already cost about $500,000 on average in L.A.short half a million affordable units as of last year — and statewide and can cost as much as $1 million dollars in some cases, making California the most expensive state to build in.

The likely economic impact of the pandemic means it’s even more important now to overhaul the process of building affordable housing in the state, said Carolina Reid, a faculty research advisor at UC Berkeley who recently published a study on the cost of housing.

“If you look at how we build affordable housing, every single one of the actors in it, from cities to developers to construction workers, is going to face stress from the coronavirus for years,” Reid said.

California Gov. Gavin Newsom has expressed frustration with the myriad of agencies that issue funds for the development of affordable housing, and has pledged to simplify how developers get money for projects.

“I’ve just had enough with TCAC and CDLAC and OPRs and CalVets and HCDs and CalHFAs,” the governor said in January. “Six of you understand what the hell I just said. No one else does. And that’s the point.” [LAT]Dennis Lynch


Related Articles

arrow_forward_ios
LA County explores turning struggling commercial properties into housing. (Getty)
LA County explores turning struggling commercial properties into housing
LA County explores turning struggling commercial properties into housing
(iStock)
Fry’s Electronics, go-to for high tech pros, closes forever
Fry’s Electronics, go-to for high tech pros, closes forever
(iStock)
Southern California housing rush was unabated in January
Southern California housing rush was unabated in January
California Ripped Fitness (Google Maps)
Maxed out: Gym closes after racking up $1M in Covid fines
Maxed out: Gym closes after racking up $1M in Covid fines
Actors Fund CEO Joseph Benincasa and a rendering of the project
Actors Fund, Thomas Safran will build $120M affordable housing project
Actors Fund, Thomas Safran will build $120M affordable housing project
Sacramento Mayor Darrell Steinberg (Getty, iStock)
Sacramento city officials propose ending single-family zoning to boost housing
Sacramento city officials propose ending single-family zoning to boost housing
California has generally been behind on housing production for years. (Photo Illustration by The Real Deal, Images via Getty)
Just 3% of California cities will meet housing goals
Just 3% of California cities will meet housing goals
President Joe Biden and Gov. Gavin Newsom (Getty, iStock/Illustration by Alexis Manrodt for The Real Deal)
Biden’s executive order fully reimburses LA for Project Roomkey
Biden’s executive order fully reimburses LA for Project Roomkey
arrow_forward_ios

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

Loading...