Los Angeles County, CA and the Mayor of the City Los Angeles Eric Garcetti each recently unveiled strategies to significantly increase funding for affordable housing programs following this year’s surge in homelessness. On October 27, the Los Angeles County Board of Supervisors unanimously passed a motion to create its first dedicated Affordable Housing Programs unit as part of its annual budget, committing $300 million to create and preserve affordable homes over the next five years, increasing to $100 million per year starting in fiscal year 2020-21. The motion was an important victory for housing advocacy organizations, including the Southern California Association of Non Profit Housing (SCANPH), an NLIHC State Coalition Partner. Also earlier in October, Mayor Garcetti announced he was pursuing a linkage fee on all new commercial and real estate development to fund the production of new affordable homes in the city.
A shortage of 500,000 affordable homes available to low, very low and extremely low income renters in Los Angeles County prompted both measures. Both will help create housing for the area’s approximately 44,000 people who are homeless.
The Affordable Housing Programs budget represents a significant increase in spending on affordable housing. After the elimination of redevelopment agencies (RDAs) throughout California in 2012, funding for the construction of affordable homes in the county decreased by $275 million per year. To blunt this blow by the state, the Board of Supervisors took the unprecedented step of allocating $15 to $25 million for affordable housing annually for the next five years.
At least 75% of the new Los Angeles County funds will go towards the construction and preservation of housing affordable for low, very low and extremely low income renters. The new developments will benefit families and seniors, people facing homelessness, youth aging out of foster care, adults and youth exiting the justice system, veterans, those with physical disabilities, domestic violence survivors, and a broad set of individuals who frequently use county health and social service programs. The remaining funds will go toward rental assistance, rapid rehousing, shared housing, move-in assistance, and related services.
SCANPH partnered with the local PICO National Network member organization, LA Voice, to mobilize nearly 80 people, including housing developers, clergy members, residents of affordable developments, business organizations, healthcare organizations, and low income renters in need of more housing options, to advocate for passage of the new housing plan at the County Board of Supervisors’ meeting on October 27.
Efforts to create a new commercial and real estate development linkage fee at the municipal level are also underway. While speaking at the Mayoral Housing, Jobs, and Transportation Summit on October 23, Mayor Garcetti announced his plan to double the production of affordable housing by creating a linkage fee on market rate commercial and real estate development in order to generate a local stream of revenue for the City’s Affordable Housing Trust Fund.
If passed, Mayor Garcetti’s proposal will be Los Angeles’ first ever fee on developers to fund affordable housing, creating a new, consistent, and local source of funding. The City estimates that the fees could raise between $37 million and $112 million annually. A new housing policy unit within the City’s Planning Department would be responsible for implementing and managing the fee.
Some critics of linkage fees believe that they will result in increased rents and minimize the pool of naturally occurring affordable housing. SCANPH and other housing advocates contend that the fees apply only to new market-rate developments that are not affordable to low income residents and that linkage fees do not diminish developers’ returns or reduce housing supply.
Mayor Garcetti’s announcement came two months after he and the City Council declared a state of emergency on homelessness and the City Council earmarked $100 million in one-time funding for homeless services that become available in January 2016.
“We applaud the Board of Supervisors for pledging to invest more than $300 million toward affordable housing over the next five years, and to permanently allocate $100 million per year after that. We thank them for showing needed leadership on the crucial issue of housing affordability,” said Alan Greenlee, Executive Director for SCANPH. “We will work with our broad coalition of advocates to ensure that the City follows suit by establishing the proposed linkage fee.”
For more information on efforts to expand local commitment to affordable housing at the City and County of Los Angeles, contact Robert Dhondrup, Communications and Programs Director for SCANPH at [email protected].