This article is crossposted at Silver Lake Blog.
On Monday, leaders from both state and local government met in Downtown Los Angeles to discuss the benefits of Governor Jerry Brown’s plan to address affordable housing throughout California. Ben Metcalf, State Director of Housing and Community Development (HCD), was joined by Los Angeles Councilmember Gil Cedillo, SCAG Executive Director Hasan Ikhrata, and nonprofit developer Robin Huges of Abode Communities.
Per data from HCD, California is currently building less than half the housing it needs to meet demand. In coastal and urban areas of the state, a lengthy and costly approvals process has a major impact on the supply of housing, thereby increasing its cost. According to Metcalf, new affordable housing is on average 12% more expensive and takes 30% longer to build because of local approvals. After years of not building enough new housing units, housing in California is now two-and-a-half times more expensive than the national average.
Governor Brown’s plan proposes to bypass the local approvals process by allowing by-right development of projects that include 20% of their residential units as affordable housing. Both Metcalf and Cedillo emphasized that by-right development of housing is the norm in other parts of the country where housing is less expensive. By tackling the basic lack of supply of market-rate housing, and by including an affordable mandate, the Governor’s plan has the potential to create more housing for people across the income spectrum.
The plan also includes $400 million in funding for affordable housing, which in turn may be eligible to be matched two-to-one with federal funding. For a nonprofit developer like Robin Hughes, this money is potentially a windfall after years of cuts to state affordable housing funds.
Hasan Ikhrata of SCAG emphasized the need to build more housing near transit. In addition to fitting with longstanding policies, this is necessary for the state to reduce greenhouse gas emissions to levels under State Assembly Bill 32. Ikhrata also linked the cost of housing to Southern California’s high rate of child poverty, noting that when families spend half or more their income on housing, it often means forgoing other opportunities.
Councilmember Cedillo mentioned several projects that are currently being held up because of the local approvals process, ranging from a smaller 80-unit project at 56th Street and Figueroa in his own Highland Park district, to a 2,000-unit complex planned for the intersection of Temple and Beaudry in Downtown L.A.
Overall, Cedillo estimates that the City of Los Angeles needs to build 100,000 more housing units to meet current demand. Approvals in Los Angeles can currently take up to three years, which he believes can be reduced to an average of nine months with the passage of this legislation. As Cedillo points out, cities are willing to expedite the approvals process for the construction of sports stadiums. Shouldn’t we be willing to do the same for housing?
Monday's event was arranged by ULI Los Angeles at the request of Governor Brown's office.