Categoria: Affordable housing

Evictions Rise, Tenants Scramble For Help As LA County Protections Expire

By Alejandra Reyes-Velarde | CalMatters

Irma Cervantes could barely afford the $750 monthly rent for the converted garage apartment she lives in with her children in East Los Angeles when she worked full-time at a laundromat.

When the pandemic shut down non-essential businesses, Cervantes was out of a job. Then she got sick with long COVID-19.

Now she owes 10 months rent, she said, and is trying to pay it down. Her three children, ages 19 to 23, are helping by working part-time jobs.

Her landlord has increased demands for payment and wants her out, Cervantes said. And on March 31, L.A. County’s tenant eviction protections are set to expire.

READ MORE: LA Mayor Bass’ first 100 days: As promised, homeless crisis front and center

“I’m left thinking, what will happen when there aren’t any protections,” Cervantes said. “What will I do with my kids? We can’t pay $1,600 rent.”

Across California nearly 600,000 people owe a total of $2.1 billion in back rent, researchers say. In Los Angeles city and county, nearly 200,000 people owe more than half a billion dollars in unpaid rent. 

RELATED: Raising rent 10% is too much, says lawmaker proposing California bill to prevent more homelessness

Many tenants, like Cervantes, are on edge because state protections and rental assistance across the state diminished, and now local protections like L.A. County’s are phasing out. Housing rights advocates and attorneys say eviction lawsuits already are rising in the state’s most populous county; they’re bracing for even greater spikes once county pandemic protections go.

“Because both state and local eviction protections enacted during the pandemic have come to an end, it’s an even bigger crisis,” said state Sen. María Elena Durazo, a Los Angeles Democrat, during a recent press conference.

Protections end California’s statewide tenant relief and protections ended in June 2022. The pandemic-era programs had shielded many tenants harmed by COVID-19 from eviction and offered financial assistance to help them pay back rent.

Since then some city and county local measures kicked in to keep tenants in homes. Los Angeles County protections from evictions stepped in for city residents on Jan. 31.

READ MORE: Tenants facing evictions should get free legal representation, LA councilmembers say

L.A. County’s tenant protections don’t prevent landlords from filing eviction lawsuits, which are called unlawful detainer suits. But the protections do give certain low-income tenants a defense in court if their rent was late between July 2022 and March 31 of this year due to the pandemic.

Beginning April 1, landlords will be able to evict tenants for a variety of reasons, but they’ll have to give tenants 30 days’ notice.

However housing justice groups may be making headway in their push to extend some tenant protections.

County supervisors Lindsey P. Horvath and Hilda Solis are expected to propose a motion today that would protect tenants from no-fault evictions until March 2024.  If it’s approved by a majority of the five supervisors, tenants who are paying rent could not be evicted, even if they had a pet or a person move in during the pandemic in violation of their lease.

Horvath said as a renter she recognizes that thousands would be at risk of losing housing after March 31 without this change, which is in keeping with L.A. Mayor Karen Bass’ efforts to reduce homelessness.

RELATED: New law in LA: Landlords must pay relocation costs if they raise rents too high

“If we are going to solve this crisis, we must stop the inflow of people falling into homelessness by keeping them in the housing they are already in,” Horvath said in a statement. 

Patchwork of protection Solis said it’s the county’s duty, as “the safety net for our most vulnerable,” to protect people from losing their homes.

Once countywide protections expire, tenant protections will return to a patchwork of local measures in some of the county’s 88 cities, leaving many renters without protection.

Already in L.A. County unlawful detainer filings for eviction have surged over the prior two years, when there were more layers of protection for tenants.

In 2020 and 2021, there were 13,796 and 12,646 unlawful detainer filings, respectively — record lows in what had been a steady downward trend in eviction filings since the 2008 recession, said Kyle Nelson, an eviction researcher at UCLA.

But last year there were 34,398 unlawful detainer filings in L.A. County. That’s not quite at 2019 levels, when there were 40,572 eviction filings, but experts expect another jump after the first back-rent deadline.

Even before state protections expired, housing analysts worried about a “tsunami” of evictions. Nelson said he now thinks that was an overestimation, but “we are seeing the wave.”

It could vary by city, though.

“I would expect the spikes to happen when the rental debt is due,” he said, ”because in various moratoria policies there are different windows for when debt for different periods of time is due.”

Rental debt The National Equity Atlas, a collaboration between Oakland research group Policy Link and the USC Equity Research Institute, estimates that 199,520 households in L.A. County are behind on rent, by a total of $542 million.

Its estimates are based on the Census Household Pulse Survey, which measures the pandemic’s impact on families.

Selena Tan, who leads Policy Link’s racial equity data lab, said rental debt estimates are likely lower than reality, partly because the Pulse survey responses represent a single point in time and may leave out renters who drop in and out of debt.

Advocates say the best remedy for evictions are programs that pay down rental debt for tenants, such as the Statewide Emergency Rental Assistance Program, which awarded more than $4.6 billion to renters before it expired in March 2022.

Although the program helped renters and landlords during the pandemic, it also rejected many applicants seemingly without reason. Three community organizations sued the state last year, arguing the rejections were discriminatory and vague. A judge partially agreed.

“There were all kinds of problems with the way it was administered,” said Christina Livingston, executive director of the Alliance of Californians for Community Empowerment Institute. “But for the people it helped, it really did keep them from homelessness,”

Alliance leaders had hoped to persuade lawmakers to keep emergency rental assistance going as a way to eliminate tenant debt, Livingston said, but “there isn’t a will for that.”

Mom-and-pop landlords Assemblymember Kate Sanchez, a Republican from Murietta, said blanket eviction protections and bureaucracy make it difficult for landlords to collect past-due rent. And state and local programs haven’t provided enough support to struggling mom-and-pop landlords.

“My office and my Republican colleagues have been helping these small property owners navigate Sacramento’s horrible bureaucracy to get the payments they need to pay their mortgages and keep their investments,” Sanchez told CalMatters. “The state should not tip the scale in favor of renters without providing adequate support to our mom-and-pop property owners.”

There still are some tenant supports in Los Angeles County.

Tenants at risk for eviction can still tap federal and state funds to pay back rent. But first they need to get an attorney through Stay Housed L.A., a partnership of agencies and legal service providers, said Javier Beltran, deputy director of the Housing Rights Center, which administers the funds.

In L.A. city, new tenant protections impose a threshold on how much a tenant must owe before they can be evicted — one month’s “fair market” rent, which in 2023 is about $1,747 for a one-bedroom apartment.

Landlords who increase rent by more than the state cap, which is now at 10% — 5% plus inflation — will have to pay relocation assistance to the tenant, an L.A. city ordinance states.

Groups representing landlords have sued the city and county over these protections, including the L.A.’s most recent ordinance.

Renters vs. owners Landlords have struggled to collect thousands — or millions — of dollars of rental debt. Tenant protections and regulations limit garnishing wages, said Daniel Yukelson, executive director of the Apartments Association of Greater Los Angeles.

“Over 80% of landlords in California are independent owners, mom and pops,” he said.

“They got crucified the last three years at the hands of the government. The government continues to use landlords as a scapegoat for the unhoused we see on our city sidewalks every day, because they haven’t come up with solutions to that problem.”

Several mom-and-pop landlords said privately that they would prefer to compromise with tenants rather than evict them. But going so long without rental income puts a strain on their finances. Some added that government rental assistance didn’t go far enough to pay the bills.

Tenant advocates countered that lobbying by landlord associations and campaign donations from the real estate industry make it difficult to pass tenant-friendly legislation, such as a law establishing a legal right to counsel for tenants in court.

In L.A., organizers have made progress with the city council. Recently a motion to explore establishing a right to legal counsel in eviction proceedings passed in the city council’s housing and homelessness committee.

The challenge will be finding funding sources, said Pablo Estupiñan, who directs Strategic Actions for a Just Economy’s counsel campaign.

Housing advocates want a recently approved one-time transfer tax to help pay for eviction representation, he said. That tax will be tacked onto real estate sales. It also would pay for affordable housing and renters’ education and outreach.

State help But housing advocates are still focusing on the state to strengthen tenant protections.

The Alliance of Californians for Community Empowerment Institute is prioritizing   Durazo’s placeholder Senate Bill 567, Livingston said.

The bill, when it is complete, would expand the California Tenant Protection Act of 2019 by further limiting rent increases, closing some loopholes that allow for abuse of eviction rules, and improving enforcement of housing rights, Durazo said.

“The government response to addressing this crisis has been focused primarily on rehousing people after they lose their housing, and this is important,” Durazo said,  “but it needs to be together with an effort to prevent people from becoming houseless.”

But the existing tenant protections in L.A. city and proposed changes to state law won’t erase the millions of dollars that at-risk renters already owe landlords. L.A. tenant advocates are looking into alternatives, such as creating a mom-and-pop landlord fund, for instance.

But progress is slow and any funds potentially available aren’t enough to cover all of  L.A.’s rental debt, they said.

Faizah Malik, an attorney, said she has concerns about any proposed rental relief programs moving forward. Malik works for Public Counsel, a nonprofit pro bono organization that has sued the state over its rental relief program.

“We do have a ticking clock on rental debt and evictions for that debt in the city of L.A.,” Malik said. “We have a lot of concerns about how rental assistance programs are being set up. The most efficient way to handle the rent debt would be to cancel it. That is the ultimate demand of the tenant movement.”

That remedy could change Cervantes’ life, enabling her to stay in her home.

“The home is the base of life for every human,” she said. “Here we can laugh, we can rest, we can cry. Having a home is a right, it’s not an option.”

Silicon Valley Bank’s Other Key Partners: Affordable Housing Developers

By Dana Hull and Sarah Holder | Bloomberg

Construction on The Kelsey Civic Center, a 112-unit affordable housing project across from San Francisco City Hall, was supposed to begin this week.

But the lender for the project’s $52 million construction loan was Silicon Valley Bank.

On Friday — the date the project’s financing was slated to close — regulators shut down the bank, known for its ties to the tech community but also a financing source for local developers. The Kelsey and its co-developer are now talking to other potential lenders and hoping that any delays can be minimized.

“SVB was an important player in the tech scene and the startup scene, but they were also a really important player in the affordable housing scene,” Micaela Connery, co-founder of The Kelsey, said by phone.

No state is under more pressure to build affordable housing than California, which is losing residents partly because of chronic housing shortages caused by sky-high rents and home prices. More than 1.2 million households lack access to an affordable rental home, according to the California Housing Partnership, and sprawling tent encampments of unsheltered residents are common in major cities.

READ MORE: Most cities still falling behind affordable housing mandate, state numbers show

The fallout of SVB comes as Gov. Gavin Newsom and California’s attorney general are ramping up enforcement of a new state law intended to increase the state’s critically low housing stock. The median single-family home price is about $750,000, more than twice the US median.

The aggressive push is pitting the state against local authorities that Newsom accuses of obstructing his plan to add 3.5 million new homes in California, including affordable units. Last week, Newsom and Attorney General Rob Bonta announced the state is suing Huntington Beach for failing to comply with the new multifamily zoning laws intended to create more housing.

READ MORE: Newsom sues Surf City for affordable-housing snub

On Sunday, Newsom praised the Biden administration for their actions to protect SVB depositors, which he said in a statement had “profoundly positive impacts” on several pillars of California’s economy, including “affordable housing projects that can continue construction.”

Developers of lower-cost housing say they’re confident other lenders will step into the void left by SVB. But underwriting takes time, and any delay often adds to a project’s overall price tag. Rising interest rates and inflation are already lifting construction costs.

Laura Foote, the executive director of YIMBY Housing, a nonprofit that advocates for housing growth in the region, said the sector was heartened by the federal government’s actions over the weekend.

Affordable-housing developers “are very stressed about the delays, but they’re not yet saying ‘oh my gosh, and now this building won’t get built,’” said Foote.

RELATED: Irvine eyes 4,536 new rentals: Why building homes isn’t always war

Silicon Valley Bank has invested and loaned more than $2 billion to fund affordable housing projects in the Bay Area between 2002 and 2021, where it says it’s helped build or rehabilitate about 10,000 affordable units. In its 2022 ESG report, the bank outlined a plan to invest more than $1 billion more in residential mortgages in low- and moderate-income areas in Massachusetts and California by 2026.

The Kelsey “will find a path forward,” said Connery. “The big loss is scheduled. Any delay is an opportunity cost.”

Irvine Eyes 4,536 New Rentals: Why Building Homes Isn’t Always War

In an age where conflict over homebuilding appears to be the norm, an intriguing deal in Irvine with land giant Irvine Co. could help the city meet its state-approved homebuilding goals.

The tentative “memorandum of understanding” would see Irvine getting 4,536 new apartments at six sites – 1,025 with affordable rents. Developer Irvine Co. will pay $65 million in fees for the construction that could be completed to meet the city’s 2029 home-production deadline.

It’s a road map for 2,157 rental homes at three sites previously announced by Irvine Co. plus another 2,379 units at three other locations.

Now, city council approval is required for this memorandum to move ahead. And Irvine politics is hard to handicap as the debate over the deal begins at Tuesday’s city council meeting. But it’s noteworthy that the deal was negotiated by a city committee that includes Mayor Farrah Kahn and Vice Mayor Tammy Kim.

Irvine’s seemingly cooperative process runs in sharp contrast to what’s going across Southern California.

At least nine cities in the region face housing proposals from developers trying to bypass the normal approval process because those cities don’t have state-approved state-approved housing goals. Or there’s La Habra, which is being sued by a homebuilder after it canceled a previously approved housing project. And there’s Huntington Beach, where state officials and the city are suing each other over the local government’s refusal to adopt some of California’s pro-housing development laws. Now you’d think homebuilding would be simple. But getting building plans approved anywhere in California requires cities and developers to navigate a maze of regulations. And some of those rules can force outcomes neither side really wants.

So, to get anywhere close to California’s lofty housing dreams, adult conversations between stakeholders with serious give-and-take become a necessary requirement.

Look, the somewhat symbiotic relationship Irvine and Irvine Co. is a half-century old. So it’s not what every municipality faces.

But Irvine Co. believed the homes could have been built without much city oversight or fees paid. Conversely, the city could have made that construction as challenging as possible. Let’s look inside the deal to get a glimpse of the tradeoffs involved.

So what does Irvine get? Homes: To meet state goals, the city needs 23,600 new units by 2029 with roughly 15,000 deemed affordable for households earning less than local median wages. Irvine Co.’s plan would provide a big step toward meeting those intense demands.

Cash: There’s as much as $65 million paid to the city – a $14,500 per-unit fee – and the freedom to use that money as local policymakers see fit.

Financial flexibility is important to the city because a traditional affordable-housing deal would mean developer fees could be spent only on park construction. And the city, home to the ever-evolving Great Park project, already has plenty of recreational spaces.

Control: The state is trying to limit housing supervision by all cities because that oversight often throttles residential development. But Irvine Co. agreed that all plans for these units will go through typical city approvals.

“It’s a deal everyone could feel good about,” said city manager Oliver Chi as it “respects the principles of the original master plan.”

What does the company get? Rentals: This is not charity work. Obviously, Irvine Co’s apartment portfolio of roughly 65,000 units statewide will grow.

Location: The memorandum allows the developer to turn vacant or unproductive land into non-traditional sites for income-generating housing, primarily in the city’s jobs hub around Irvine Spectrum.

Corporate tenants: Do not forget about the company’s huge portfolio of office and industrial properties across the city, especially in the Spectrum neighborhood.

Orange County employers are desperate for talent and places to house those workers. Housing near workplaces is especially valued. These rentals are close to Irvine Co.-owned retail sites, too.

So, view the $65 million in fees as an Irvine Co. investment that benefits many parts of its business.

“Few cities have the ability to master plan new communities next to Fortune 500 companies, innovative tech startups, and world-class hospitals,” said a statement from Irvine Co. senior vice president Jeff Davis. “This framework agreement reflects that unique opportunity to meet the needs of Irvine’s workforce, businesses, and residents.”

And what will residents get? Rent relief: The plan calls for 337 units with rents for tenants earning annual household incomes of about $50,000; 160 units would be reserved for those earning up to $80,000; and 528 for those making up to $100,000.

Extended relief: Rent limits on 1,025 rentals, adjusted for inflation, would last for 75 years vs. the typical 30-year arrangement.

Added savings: It’s not part of the memorandum but Irvine Co. says roughly half of the remaining units built would be smaller than the landlord’s usual specs. That will mean the company, known for its high-end and high-priced apartment complexes, will offer rents well below what it typically charges.

Common living: These apartments also might not fit your possibly tarnished view of affordable housing.

Full-price units and residences for lower-income folks will be mixed within the complexes. And the housing will be fashioned with a Mediterranean look much like the company’s stylish Los Olivos complex across the 405 from the Irvine Spectrum shopping center.

What’s the bottom line? Housing development should be pretty simple.

But when the state’s economic needs clash with local political desires and the industry’s profit demands you often get a combustible brew.

In this Irvine deal, the city needs housing, especially affordable rentals. And Irvine Co., by far the city’s biggest apartment developer and owner, has properties to spare – empty stores and land once planned for uses that are out of favor.

A reasonable match provided the foundation for a deal.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

Angelenos Taxed Themselves To Raise $1.2B To House Homeless. Did It Work?

In 2016, as the number of people living on the streets of Los Angeles climbed ever higher, Angelenos were itching for a solution to the city’s growing homelessness problem.

Asked to support a $1.2 billion bond measure to build affordable housing so that people living on the streets and those at risk of becoming homeless could have roofs over their heads, voters responded with a resounding “yes.” Prop. HHH passed with 77% of voter support that November, prompting Elise Buik, the HHH campaign co-chair and CEO of United Way of Greater Los Angeles, to declare, “help is on the way.”

But more than six years later, with the city’s homeless population roughly 1½ times what it was when the measure passed — and with fewer than half the units up and running — some are wondering whether Prop. HHH should be considered a success or a flop.

The short answer: depends on whom you ask.

Although city housing officials and affordable housing advocates say the HHH program is on track to deliver about 1,600 more housing units than initially promised, over a 10-year period ending in 2026, many tax-paying Angelenos had expected that thousands more housing units would be built.

They’re also upset that the average construction cost per housing unit has increased markedly, and frustrated by the pace at which projects have been completed – though city housing officials say that, on average, nearly one new project should be completed per week the rest of this year.

Miguel Santana, L.A.’s former city administrative officer who later chaired the Prop. HHH citizens oversight committee, said it’s important to remember that the program “wasn’t designed to build as much housing as possible, as quickly as possible.” Rather, he argued, it was structured to best leverage $1.2 billion in city investment with federal, state and other funding sources to get “bigger bang for the buck.”

“Housing is being built. It’s being built not as fast as it should be, but it is being built,” Santana said.

“That’s not to say that the frustration is not legitimate,” he noted about voters who have lost patience. “There is a reason why people overwhelmingly supported the initiative. They wanted to end the suffering that has now become a part of our daily lives among Angelenos.”

That’s partly why San Fernando Valley resident and neighborhood council member Susan Collins is critical of the effort.

“(HHH) cannot build fast enough to impact what we’re seeing on the street,” she said. “The entire point of HHH was to address that.”

As long as more people are becoming homeless each year than are getting housing, the HHH program can’t be called a success, said Collins, who serves on the board of the Sherman Oaks Neighborhood Council but was speaking for herself.

Before leaving office late last year, then-Mayor Eric Garcetti said in an interview that Prop. HHH was never intended to be the sole solution to ending homelessness in the nation’s second-largest city. He credited the program for accelerating the city’s production of affordable housing units.

“We’ve done more in five years than in 30 years, and we’ve also increased the number of people we house by fourfold a year — 5,000 to 21,000,” Garcetti said in December.

His remarks followed a blistering report that then-City Controller Ron Galperin issued a year ago in which he cited skyrocketing costs and mounting delays with HHH-funded projects.

“Per unit costs continue to climb to excessive levels — over $800,000 in one instance — and the total number of completed units (1,142) is wholly inadequate in the context of the ongoing homelessness emergency,” Galperin wrote.

Casa del Sol, an affordable housing development for seniors, was built and is operated by the nonprofit A Community of Friends and was funded by Prop. HHH, the $1.2B bond measure that L.A. city voters passed in 2016. (Photo by Sarah Reingewirtz, Los Angeles Daily News/SCNG)

Patricia Murphy poses in her Casa del Sol studio apartment where she has been living for three years in Sun Valley on Friday, March 3, 2023 after 15 years of homelessness. Casa del Sol, an affordable housing development for seniors, was built and is operated by the nonprofit A Community of Friends and was funded by Prop. HHH, the $1.2B bond measure that L.A. city voters passed in 2016. (Photo by Sarah Reingewirtz, Los Angeles Daily News/SCNG)

“If I can come off the streets anyone can,” says Victoria Spelman, 59, at her Casa del Sol studio apartment where she has been living for a year with her two dogs Pita and Pedro in Sun Valley on Friday, March 3, 2023 after three years of homelessness. Casa del Sol, an affordable housing development for seniors, was built and is operated by the nonprofit A Community of Friends and was funded by Prop. HHH, the $1.2B bond measure that L.A. city voters passed in 2016. (Photo by Sarah Reingewirtz, Los Angeles Daily News/SCNG)

Security guard Dennis Flores walks through Casa del Sol, an affordable housing development for seniors, in Sun Valley on Friday, March 3, 2023. The supportive housing project was built and is operated by the nonprofit A Community of Friends and was funded by Prop. HHH, the $1.2B bond measure that L.A. city voters passed in 2016.(Photo by Sarah Reingewirtz, Los Angeles Daily News/SCNG)

Although the $800,000-per-unit project is an outlier, the average per-unit cost of HHH projects has increased.

In an earlier audit of the HHH program, Galperin noted that the city initially thought HHH units would cost $350,000 to $414,000 per unit, depending on the number of bedrooms. Yet by 2019, the median per-unit cost had grown to $531,373, with more than 1,000 units projected to cost more than $600,000.

“The median cost of building many of these units approaches – and in many cases, exceeds – the median sale price of a condominium in the City of Los Angeles ($546,000) and of a single-family home in Los Angeles County ($627,690),” Galperin wrote in a 2019 report.

Currently, the average total development cost of an HHH unit is estimated at $547,533, according to the city’s HHH progress dashboard.

Ann Sewill, general manager for the city’s housing department, responded to Galperin’s 2022 audit in a letter to Garcetti and the City Council last year, noting that affordable units may cost more than market-rate housing due to requirements to pay prevailing wages to workers, provide higher energy efficiency standards and furnish the units. And there are extra legal fees and costs associated with cobbling together financing from multiple sources.

She also said Prop. HHH was intended to fund 7,000 housing units in a decade, yet 8,000 units were in the pipeline as of late 2021 – surpassing initial projections. That projection has since grown, with the city’s housing department now saying the HHH program will produce nearly 8,600 units by 2026.

The reliance on multiple funding streams “adds time and money, but stretches HHH funding to meet production goals. Without leveraging, HHH would have produced only 3,900 permanent units,” Sewill wrote.

See the full HHH Progress Report Dashboard

Broken promises or unclear messaging? Developers say affordable housing projects typically take four or more years to complete – longer than regular housing developments – because of the way the approval and financing process works.

“People wanted (housing) in two years, and that just was never realistic,” said Stephanie Klasky-Gamer, president and CEO of LA Family Housing, which is expecting to build 750 new permanent supportive housing units over the next three years. Permanent supportive housing is long-term housing combined with support services for the residents.

“We are absolutely on the right course. We have been and continue to be good stewards of HHH dollars,” Klasky-Gamer said. “As a community member, I say that. As a taxpayer, I say that. And as a homeless services provider, I believe all of that to be true.”

Meanwhile, Sewill said the city has reached a point where about one new HHH-funded affordable housing project should be completed each week, and the public should start to notice the results.

“They don’t come off the production line evenly, of course, but on average we’ll be seeing one per week for the rest of this year,” Sewill wrote in an email last month.

The most recent estimates show the HHH program will produce just shy of 8,600 units when all is said and done. But wasn’t it supposed to pay for 10,000 affordable housing units?

That’s what many Angelenos believed to be the case – though city officials maintain that only 7,000 units were ever expected to come from HHH bond dollars.

Sewill confirmed that before Prop. HHH, the city expected to produce 300 affordable housing units per year, or 3,000 units over a decade. When Prop. HHH was proposed to voters, the thinking was that it would help finance an additional 700 units annually, or 7,000 units in 10 years, bringing the total number of new units to 10,000 over a decade, Sewill said.

But voters say Prop. HHH was sold to the public as a bond measure that would pay for 10,000 units. Some residents interviewed for this story accused city officials of walking back their promises and attempting to change the narrative.

“The way they shared HHH is that they would be able to build 10,000 units,” said attorney Grace Yoo, who ran for City Council in 2020, adding that Angelenos feel “misled” about the timeline and costs.

“There was so much time lapse that it caused more people to be upset,” she said. “I think you’ll find most Angelenos are sorely disappointed because there was so much hope and expectation.”

Galperin, the former city controller, agreed the bond measure was presented to voters in a way that “the reasonable understanding was that there would be 10,000 units” funded through Prop. HHH.

And while the public understood it would take time for those units to be built, he said, bureaucracy caused unnecessary delays.

“Nobody expected these units to be built in a day,” Galperin said. “However, the process that was put in place was one that created a lot of delays. The longer you wait to get something done, the more expensive it becomes.”

Affordable housing developers who rely on government subsidies often need to cobble together financing from several different sources – a painstakingly slow process that can take years.

For example, a developer may seek funding from the city or county, as well as state and federal governments. But rather than apply to the various agencies simultaneously, the developer must secure funding from, say, the city or county first before they can apply for state funding. And they may not be able to apply for federal funding until they’ve been awarded the state funding.

Moreover, because of the high demand for funding, if a developer’s application isn’t selected, they have to wait until the next round of funding to re-apply, which could take anywhere from several months to a year.

According to Galperin, HHH projects typically require six or seven funding streams.

And as developers wait for all the financing to fall into place, they’re likely paying interest to banks for the land they’ve acquired.

Over the years, multiple factors have driven up the price tag of HHH units. Obvious reasons include supply chain issues and labor shortages caused by the coronavirus pandemic that led to increased costs and project delays.

But there may be lesser-known reasons as well.

Jason Ward, an associate economist with the RAND Corporation, estimates that requiring developers of HHH-funded projects to pay “prevailing,” or union-level, wages, increases a project’s overall costs by 10% to 15%.

Additionally, Ward noted in a 2021 report that about 18 months after voters approved Prop. HHH, the L.A. City Council adopted a project labor agreement. In order to get HHH funding, the labor agreement effectively required developers who intended to build 65 or more units to adhere to working conditions such as when work can be performed, worker ratios, and extra pay for union employees who work holidays. The project labor agreements added about 15% to construction costs, Ward said.

The long wait A typical affordable housing project once took four to five years to complete from the time a developer acquired a site to when they finished construction, according to Dora Leong Gallo, president and CEO of A Community of Friends, a nonprofit that builds and provides permanent supportive housing to people experiencing homelessness and mental illness.

But after the COVID-19 pandemic hit, that timeline grew to seven years or longer in some cases due to supply chain issues and labor shortages, Gallo said.

Besides the lengthy process of securing funding, the city’s approval process can add to the timeline since developers must wait for multiple departments to sign off on their plans or work – a process that can take up to a year if the city is understaffed, Gallo said.

She and others interviewed for this story expressed optimism, however, that the timeline can be shortened. During her first week in office in December, Mayor Karen Bass signed an executive directive to fast-track the construction of 100% affordable housing projects and shelters in L.A.

Gallo described a culture shift in City Hall under the Bass administration and called the mayor’s directive for city departments to review applications concurrently, rather than one after another, a “game changer.”

“With the mayor’s executive directive, we could do this in three or four years,” she said.

Galperin, meanwhile, said there should be improved coordination between city departments to reduce red tape and to simplify the funding process so it’s less complex and time-consuming.

“I would like nothing more than to see this be a success,” he said of the HHH program. “For each and every person that actually ends up in a unit and gets off the street and is hopefully able to get their life back together again, it’s a success.”

“The creation of housing – be it permanent, affordable, transitional – actually saves lives and in that sense, each life that it saves is a success,” Galperin said. “I would just like to see the speed at which whatever is going to get done, get done sooner.”

Cheap California: Where Are Homebuying ‘bargains’ In The State?

“Cheap California” looks at various slices of the state’s economy based on price.

Buzz: You can find California housing with pricing that requires a proportional size of income on par with what is needed by the typical new U.S. house hunter. But those “bargain” homes are located in sparsely populated parts of the state.

Source: My trusty spreadsheet reviewed the California Association of Realtors’ first-time homebuyer affordability index to find housing bargains in 51 counties for 2022’s fourth quarter. The Realtors’ benchmark looks at the monetary burden of buying using more generous financing math than other indexes.

Topline: The best bargains as measured by this affordability yardstick are for the folks in Northern California counties of Lassen (where 72% can afford to buy) and Shasta (57%) and mid-state Kings County (58%). The trio had affordability levels at or above the nation’s 57% rate.

And where were the priciest counties, on this scale? Mono (18% affordable), Santa Cruz (21%), and Santa Barbara (24%).

Bottom line: Affordability tumbled last year as stubbornly high prices combined with rising mortgage rates. As a result, few house hunters could qualify for a home loan and sales activity plunged in 2022’s second half.

Ponder California’s “affordability” at 34% for a first-timer in the fourth quarter. That was down from an average 38% in 2022’s first nine months as the Federal Reserve ended its cheap money policies as upped interest rates. Affordability statewide averaged 45% in mid-pandemic 2020-21 and 49% in 2015-19, before the coronavirus twisted the economy.

Yes, homes are more affordable nationally, but the downward slope is similar. The year-end 57% U.S. affordability rate compares to 61% during the previous nine months, 69% in 2020-21 and 72% in 2015-19.

The numbers When looking only at the state’s 12 most-populous counties, you also see “bargains” are concentrated in inland California. Here’s how the dozen big housing markets ranked in order of affordability …

San Bernardino: 51% of first-time shoppers could afford a local home in the fourth quarter vs. an average 55% in last year’s first nine months. That’s also below the 64% average of 2020-21 and 69% in 2015-19.

Fresno: 50% fourth quarter vs. 52% previous nine months, 62% in 2020-21, 65% in 2015-19.

Kern: 49% fourth quarter vs. 54% previous nine months, 64% in 2020-21 and 70% in 2015-19.

Sacramento: 49% fourth quarter vs. 51% previous nine months, 59% in 2020-21 and 63% in 2015-19.

Contra Costa: 44% fourth quarter vs. 46% previous nine months, 51% in 2020-21 and 55% in 2015-19.

Riverside: 43% fourth quarter vs. 46% previous nine months, 55% in 2020-21 and 59% in 2015-19.

San Diego: 31% fourth quarter vs. 34% previous nine months, 44% in 2020-21 and 47% in 2015-19.

Alameda: 30%  fourth quarter vs. 30% previous nine months, 38% in 2020-21 and 41% in 2015-19.

Los Angeles: 28% fourth quarter vs. 34% previous nine months, 41% in 2020-21 and 46% in 2015-19.

Santa Clara: 28% fourth quarter vs. 27% previous nine months, 34% in 2020-21 and 37% in 2015-19.

San Francisco: 27% fourth quarter vs. 27% previous nine months, 28% in 2020-21 and 25% in 2015-19.

Orange: 24% fourth quarter vs. 26% previous nine months, 37% in 2020-21 and 42% in 2015-19.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

Four Housing Projects, 727 Units, Break Ground In San Fernando Valley

Four construction sites projected to yield more than 700 apartment units to meet the housing needs of the local workforce and low-income households have broken ground in the San Fernando Valley and are slated for completion between late 2024 and early 2025.

On Wednesday, Feb. 8, state Treasurer Fiona Ma, Los Angeles City Councilmember Bob Blumenfield and Rob Fisher, from Mayor Karen Bass’ Office of Economic Development, joined others at one of the sites, Sync on Canoga, for a groundbreaking ceremony.

The development, at 7019 Canoga Ave. in Canoga Park, will feature 220 one-bedroom apartments. It’s near the Metro G (Orange) bus line and about a half-mile from the Westfield Topanga shopping mall.

It’s one of four transit-oriented, multi-family housing communities being built by Alliant Strategic Development that, collectively, will add 727 “attainable and affordable” rental units to the Valley’s housing stock, according to Alliant’s founder and chief executive, Eddie Lorin.

Shovels tossing dirt for the housing project that broke ground today, Feb. 8, 2023, for the “Sync on Canoga” project being developed by Alliant Strategic Development. (Photo by Dean Musgrove, Los Angeles Daily News/SCNG)

California State Treasurer, Fiona Ma, speaks at the ground breaking on Feb. 8, 2023, for the “Sync on Canoga” project being developed by Alliant Strategic Development. (Photo by Dean Musgrove, Los Angeles Daily News/SCNG)

View of the housing project that broke ground today, Feb. 8, 2023, for the “Sync on Canoga” project being developed by Alliant Strategic Development. (Photo by Dean Musgrove, Los Angeles Daily News/SCNG)

Eighty percent of the units will serve what Lorin called “the missing middle” – middle-class Angelenos, including educators and first responders, who don’t qualify for affordable housing but can’t afford luxury rental units that many developers in the area are building these days.

The remaining 20% of the units, or 146 units, will be rented to low-income tenants, Lorin said. Half of the 146 will go to tenants who make just 50% of the area’s median income. The other half are reserved for households earning just 30% of the median income.

The projects come at a time when the city is facing a housing affordability crisis that many say must be addressed to prevent more people from falling into homelessness.

The other three projects underway by Alliant Strategic Development are the Pendant on Topanga, which will include 149 apartments ranging from studios to two-bedrooms on Topanga Canyon Boulevard in Canoga Park; Vose, a 332-unit project also ranging from studio to two-bedroom apartments, in Van Nuys; and Cadence at Noho, which will consist of 26 one-bedroom and two-bedroom apartments in North Hollywood.

The developments are being financed through bonds purchased by private companies and issued by the California Municipal Finance Authority and California Housing Finance Agency, according to Lorin.

Linh Tat | Reporter Before joining the Los Angeles Daily News in 2020, Linh Tat covered K-12 and higher education as a statehouse reporter for POLITICO New Jersey. Linh started her career in the San Francisco Bay Area, where she worked as a night cops, city hall and education reporter for Bay Area News Group. After moving to the East Coast, she joined The Record newspaper in New Jersey in 2011. There, she was introduced to the world of Superfund sites while covering several municipalities and also spent time covering state and federal courts. Linh is a product of California’s public school system and attended UCLA. Linh returned to her home state of California in 2019.