With banks crashing and credit becoming almost nonexistent, it didn’t seem to be the best day to hold a rally boosting an affordable housing plan that will require considerable borrowing. But the national financial crisis did not daunt the enthusiasm of supporters, led by Mayor Antonio Villaraigosa and including more than 100 union members and community activists.
The basement auditorium of UNITE-HERE Local 11 was packed with men, women and small children Saturday, some the folks being too low paid to hire baby sitters. They listened intently as speakers told stories of high rents, low pay and long commutes. At one point when I chatted with a friend briefly, a woman told us to be quiet. She wanted to hear the speakers.
One speaker, Donna Rodriguez, told how she worked as an account manager for a Westside business management firm with wealthy clients. Her salary is more than $42,000 a year and half of it goes for a small one room apartment in Silver Lake, where she shares a queen sized bed with her eight-year-old daughter. The proposal would require developers to include low and moderate priced housing for people like Rodriguez—and build it close to her job on the Westside, whose residents proudly embrace the principles of NIMBY.
Los Angeles, said Villaraigosa, “has the smallest percentage of people who can afford a medium priced home in the United States. “ He also said Los Angeles “has the largest homeless population in the United States.”
“I know budgets are tight,” he said. He added, “I know that credit is almost nonexistent.” But he added that he will move ahead with the plan and “we’re going to reject the cynics and naysayers.”
A draft of his proposal, as reported in the Downtown News, calls for new buildings with 20 or more residential units to reserve up to 22.5 percent of them for low or moderate-income households. As an alternative, developers of property in expensive areas could finance separate apartments for low and moderate- income people as long as those units are in the high rent neighborhoods, on public transit routes and near work places.
The financing is complicated but could be helpful to developers, now scrambling like mad for loans. They could obtain government money from a city housing trust fund of about $200 million, and use it as a base to borrow more money from banks (when the credit crisis eases) and combine it with state housing funds and federal money, if it ever becomes available. Villaraigosa said the $200 million from the housing trust fund could help make more than $1 billion available for new housing here.
The influential Central City Association and some developers want more of an incentive to build affordable housing. Someone who was involved in meetings on the subject told me some of the mayor’s aides urged him not to take on the developers. But Villaraigosa decided in favor of the proposal, which will be announced Monday.
Asked after the meeting about those who fear such a proposal will permit low-income people to live in their high priced neighborhoods, Villaraigosa said, “There is a small group of people…who create a climate of fear that somehow these kind of initiatives will undermine and erode the social fabric of our community and it is just not true.”
A big test of Mayor Antonio Villaraigosa’s commitment to liberal causes will be how hard he pushes for his plan to require developers to make room in their high- end projects for low and moderate income Los Angeles residents.
As reported by Anna Scott in the Downtown News, Villaraigosa, in his Mixed-Income Housing Policy, is contemplating major steps to require long-reluctant developers to include working people in the apartments and condos they hope to build when the housing and financing slump ends.
This would definitely mix the affluent with the less prosperous, which is counter to long-standing practice in a city long—although unofficially—segregated by class and race.
Scott reported that developers of rental projects could choose between reserving 12.5 percent of their units for very low income households earning less than $35,000 a year, 17.5 percent for households earning $35,000-$47,000 annually or 22.5 percent for those with incomes of $47,000-$60,000 per year. Condo developers would face similar requirements. But the plan draft offers developers a huge out: They could build the low income units in another place in the community, provide land for affordable housing or pay the city to buy land elsewhere and build the units.
Even this loophole isn’t enough for the builders, developers and other real estate interests who have clout at city hall. With the Central City Association taking a major role, developers will take their fight to Villaraigosa’s office, where the various parties will decide the outcome behind closed doors.
California liberals will watch this as they assess Villaraigosa as a candidate for the Democratic nomination for governor in 2010. Low and moderate income Californians are facing increasing difficulty in finding housing around the state. The issue hasn’t risen to a hot-button level at this time, but it is one that is high priority for many activists who are beginning to think about the governor’s race.
Villaraigosa’s liberal record—all important in a Democratic primary—has been spotty, particularly on the affordable housing issue, where the mayor, a big building booster, has boasted that the construction crane is Los Angeles’ municipal bird. That’s why his new housing policy will be important to his statewide political future.