In June, Harvard’s Joint Center for Housing Studies reported that Los Angeles County needs 382,000 additional apartments to keep up with demand. The Southern California Association of Governments indicates a shortage of at least 600,000 total housing units in the region (more than a million statewide).
With the population of L.A. County growing by 50,000 a year, the net effect is that over the past 20 years, home prices have tripled. These dire statistics point to what most experts predict is the worst housing shortage, and potential business crisis, L.A. has faced.
These forces, the basic dynamics of small supply and large demand, are a threat to the L.A. area’s economy. A recent poll of BizFed (Los Angeles County Business Federation) members shows employers are frustrated that high housing prices limit their ability to attract and maintain a skilled workforce. Unfortunately, the prevailing mindset in L.A. to virtually all proposed development is that it should be “elsewhere” — the classic “Not in My Back Yard.”
Angelenos would be better served by focusing on the long-term benefits of solving the housing shortage — higher employment, tax revenue, marginal cost of remote development, safety and environmental benefits — and discard misguided and unrealistic claims regarding urban sprawl. Community groups, environmentalists and the League of California Cities and tenant groups, play a vital role in instilling a “Yes in My Back Yard” attitude.
However, the best, first place to start for a path forward is for the state’s elected leaders in the Assembly and Senate to work with organized labor to come up with an acceptable alternative plan to Gov. Jerry Brown’s approach that they dismissed in a matter of weeks last summer.
Brown’s housing plan, unveiled in his May budget, aims to address the supply and would have freed up $400 million for affordable housing development. The governor’s measures would boost housing development by earmarking a minimum amount for below-market-rate units and streamlining the usual design review and public approvals process. Local groups, unwilling to yield local control, killed the plan before it had a chance to be properly vetted. One of the most vocal opponents was the influential construction workers union, which had fought for a prevailing wage requirement in the proposal.
Wouldn’t our chances of increasing affordable housing increase if the business community worked with organized labor to craft an acceptable proposal? That proposal should have as its core three key elements: the necessity of the set-aside for affordable housing, an acknowledgement that supporting local labor buoys our local economy, and a willingness to acquiesce on local control.
To accomplish the first goal, we must accept that the center of Los Angeles’ housing crisis discussion should be the low- and moderate-income families who have been particularly disenfranchised. Without affordable housing, it is nearly impossible for them to own houses in highly populated areas in California. If people can’t afford to live in areas like L.A.,, they can’t afford to work here. This disparity will have profound impacts on the quality of life of all residents.
To accomplish the second goal, we should respect that unions generate additional benefits for the local economy in the form of additional income and taxes. The buy-in of organized labor is absolutely critical not only to facilitate a comprehensive housing solution but also to ensure our community achieves the greatest economic benefit.
Finally, we must keep our eye on the goal: more housing. That requires that local and state rules on parking, height, density and environmental effects be considered secondary to the need for affordable housing. That doesn’t mean we should eviscerate local control; flexibility is critical for the short-term. But it may not be essential in the long-term. There should be a grandfather clause that allows policymakers to re-institute local requirements when the immediate housing shortage abates.
It is essential that the business community, organized labor and state legislators lead the way to provide a comprehensive plan. Strange bedfellows aside, the time for NIMBYism is over.
M.C. Townsend is President and CEO of the Regional Black Chamber of the San Fernando Valley, and chairwoman of the BizFed Institute. She will take part in BizFed and the BizFed Insitute’s NextUp Forum on the housing crisis Friday at Woodbury University.
