Apartment owners skeptical on plan for new affordable housing agency in LA

Senate Bill 679, first introduced last year, passed key committee last week

Senator Sydney Kamlager (Getty Images, iStock/Photo Illustration by Steven Dilakian for The Real Deal)
Senator Sydney Kamlager (Getty Images, iStock/Photo Illustration by Steven Dilakian for The Real Deal)

Los Angeles County could have a new agency dedicated to increasing the supply of affordable housing.

The agency, called the Los Angeles County Affordable Housing Solutions Agency, or LACAHSA — not to be confused with the controversial homeless services agency LAHSA — would have jurisdiction throughout L.A. County.

It also would have the ability to pursue tax measures and issue bonds to raise its own revenue to finance development of residential projects

A state bill to establish the agency, Senate Bill 679, passed the State Assembly’s Housing and Community Development committee last week. It was referred back to the Assembly’s Appropriations Committee––a key panel in the chamber––with the next hearing scheduled for early August.

“This bill offers a comprehensive way forward for creating housing affordability across the county, focusing on households that make an average salary or below, in particular extremely and deeply low-income people,” the bill’s author, Senator Sydney Kamlager, wrote in a statement.

Kamlager did not respond to an interview request.

LACAHSA, which is modeled after a similar agency in the San Francisco Bay Area, would be charged with increasing that supply, by providing both expertise and funding for new construction as well as tenant-focused programs such as emergency rent assistance and legal counsel.

The agency would still need to be financed, however: In addition to state and federal grants, funding could potentially come from new taxes that would be sought in a 2024 local ballot measure. Kamlager, a Democrat whose district includes Culver City and parts of South and West L.A., is seeking an initial $20 million from the state budget, the same amount that was granted to the Bay Area agency after it became operational.

The bill has wide support among pro-housing and community groups, including United Way and AARP, as well as the support of the cities of L.A., Beverly Hills, Long Beach and Santa Monica, among others.

Some real estate industry groups, including the California Rental Housing Association and the Apartment Association, California Southern Cities (AACSC), are opposing it.

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“There certainly is a need for the building of affordable housing,” said Oliver John Baptiste of AACSC. “The devil is in the details … Where is that funding going to come from?”

Local property owners, especially in the City of L.A., have now spent years dealing with the consequences of highly restrictive rent freezes and eviction moratoriums, Baptiste added.

“This bill more or less adds insult to injury,” he said. “It’s overkill on local government.”

LACAHSA’s 22-member board would include representatives from the county Board of Supervisors and the Los Angeles City Council, among others, as well as affordable housing experts. The earliest the agency could have authority is April 2023.

The legislative effort is a response to a years-long supercharged housing market that — while providing a boon to many property owners — has also exacerbated an affordability crisis for low and even middle-income Angelenos: One study published in November by the online brokerage Clever Real Estate ranked the greater Los Angeles metro area, with a median household income of $80,000 and an average home value of over $780,000, as the country’s single least affordable residential market. Other California markets, including San Jose, greater San Francisco and the Inland Empire, also dominated the list.

“I think we already knew that California’s pretty expensive, but this really paints a picture that earnings aren’t matching up to the cost of living,” Francesca Ortegren, a data scientist with Clever, said at the time. “So buying a house in some of these places is seemingly impossible.”

Rents have also risen rapidly in recent years, leading to various calls and efforts to foster the development of more affordable apartments. L.A. County has disbursed hundreds of millions of dollars for affordable housing construction, with participation ranging from providing partial financing to buying entire motels for conversion to residences for the homeless. The Los Angeles County Board of Supervisors last month voted to approve funding, at a cost of $163 million, for four projects that are slated to add over 400 units. Dozens of other affordable housing projects are in the works, including a five-story complex with solar panels in South L.A. and a four-story complex with a public art space in Pomona. The City of L.A. recently moved to buy an affordable Chinatown building to spare tenants from rent hikes, and the state demanded that a shuttered hospital in Long Beach go to affordable developers.

But after decades of underdevelopment, the efforts are just scratching the surface: According to local government figures cited in an analysis of the bill, L.A. County needs to foster the development for 341,000 affordable homes by 2029 but is on pace to create only 25,000.

“Like most of California,” Steve Wertheim, a state Assembly policy consultant, wrote the analysis, “there is an acute housing crisis in Los Angeles County.”

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