News of an effort to propose a housing bond was recently reported in this publication. While I agree it is important to ask tough questions when we’re faced with a proposal to spend public money on a problem, for me, there is no greater need we face as a community.
As a business leader and taxpayer, I like to ask “Is this an investment that will pay dividends? Is this spending that will have a significant impact on people’s lives in a positive way and create economic opportunities for people in the future that wouldn’t occur otherwise?” When it comes to ramping up our affordable housing capacity, the answer is a clear “yes.”
The housing issue is THE critical issue facing California — especially in coastal communities like Long Beach where the vast majority of opportunity and job creation takes place. It’s also a place of displacement and extreme poverty due to our inability to plan adequately as well as the baked-in pressures we have created to prevent the creation of housing to match the outsized economic opportunities we have built as the fifth largest world economy.
This is a problem that has been taking shape for decades, but has reached a crisis point in the last few years. It is manifesting itself in out-of-control rents, declining vacancy rates, and an unsustainable amount of poverty in spite of the fact that we (in the business community) keep giving our employees raises and have the highest payrolls of most regions in the nation. Something has to give and it has to be on the cost and supply side of the equation, not just increased wages. The cost of living and poverty rates are directly connected to the scarcity of housing. If we’re not going to solve housing, then we need to seriously consider slowing down our economy and ceasing job creation, and I don’t hear anyone floating those ideas.
We have two serious problems. First, there’s a huge hole in the middle. We have middle-income, working class folks, and young people entering the workforce and housing market without enough product to go around (aside from condemning more folks to a life spent on the 91 and 215 Freeways). This is the core of the housing crisis and is the main driver of gentrification.
Second, in a scarce market, people at the bottom of the economic ladder are never going to be served without help. That’s why Affordable Housing (upper case AH), is needed in such a big way. Low-Income Affordable Housing is only possible because of housing subsidies, the Low Income Tax Credit (LITC) program, and other resources that developers use to backfill the out-of-control costs of building housing so the end user isn’t stuck with the impossible task of paying the actual cost. Affordable Housing is historically for folks living significantly below the AMI (Average Median Income), but is increasingly needed by people who make higher and higher wages as “naturally occurring” affordable housing has disappeared. An increase in the supply of low-income Affordable Housing, as well as Supportive Housing, will result in decreases in the poverty rate and the rate of homelessness.
We called for a lot of measures to address the issue of homelessness in the Everyone Home Long Beach effort. One very important request was to figure out a way to re-capitalize the city’s housing fund. We lost this tool in a significant way with the dissolution of Redevelopment in 2011. While many cities used their redevelopment agencies in questionable ways, cities like ours used this tool at least in part to help capitalize our local investment in Affordable Housing. The city’s housing bureau was downsized significantly in the aftermath of dissolution.
Without the city as an active funding partner in this work, Affordable Housing developers are doing all the heavy lifting with one hand tied behind their backs.
Much of the bank lending and LITC dollars are competitive dollars and are often only rewarded if and when a developer is able to procure investment from the local community. While we have continued to produce some new Affordable Housing developments over the last few years, without this tool, we have been forgoing resources and additional investments our community so desperately needs.
An added bonus of a housing bond will be the multiplier effect those dollars will have. For every dollar we invest in the city’s fund, additional dollars become available to help make these beautiful developments possible.
If we could reduce the cost of housing, can you imagine the positive effects that would have on our local businesses? What if every kid graduating from Long Beach State this spring could afford to live here after graduating? How many of those kids would become our future leaders, professionals and entrepreneurs? We will soon sputter if we aren’t going to do the little things to invest in people who aren’t lucky enough to own a piece of the California Dream today. It’s young people and working people who drive the engine. We fail to help those people and invest in their future at our own peril.
Andy Kerr was Vice Chair of the Everyone Home Long Beach Initiative and currently serves as 4th District board member of the Los Angeles County Measure H Citizens Advisory Oversight Committee.