Affordable Housing Institute : US

Last week Los Angeles gained another distinction I’m sure it could have done without: it’s the homeless capital of America. 

 

Homelessness is widespread in communities in Los Angeles County, including Santa Monica.

 

At the New York Times reported:

 

LOS ANGELES, Jan. 14 -It was not the sort of Chamber of Commerce cheer expected from the chief executive of one the nation’s sunniest and most tourist-conscious cities.

 

But Mayor Antonio R. Villaraigosa of Los Angeles stood before the news media this week and declared unequivocally, “This is the capital of homelessness in America.”

 

The mayor was reacting to the bald truth of a report released Thursday, based on what officials called the most comprehensive census and survey of homelessness in Los Angeles County, that found 88,345 homeless people in the city and surrounding communities.

 

No other county in the country comes close - the five boroughs of New York have 48,155 homeless people, according to figures from its own census last year reported to the federal Department of Housing and Urban Development.

 

88 cities, 4,084 square miles, for large-scale map click here

 

Why the City of Angels?  Several reasons:

 

1. It’s enormous, geographically (bigger than Delaware and Rhode Island combined) and demographically (over 10.2 million people).  Still, 1 in 125 Los Angelenos is homeless. 
2. Without sustainable affordable housing (meaning government subsidy in some form or fashion)), the very lowest income people will be homeless.
3. Los Angeles has one of the nation’s biggest cost-value gaps.

 

Cost-value gap.  It’s a cruel fact of economic life that, because land value is a residual, a strong economy drives up not just the price of existing property but also the cost to develop.  That strong economy also raises the income of many, but not all, widening rental’s cost-value gap. 

 

Rental housing, whether market or affordable, is an essential species in a diversified tenure ecosystem.  Its habitat is defined by two key equilibrium points:

 

·         Income required to support market rental housing.  For most of America, this is 60% of area median.

·         Income required to support straight operating costs.  For most of America, this is 25% of area median.

 

These limits are like haloclines, undulating levels that bound three distinct spaces.  Above the ‘market viability’ halocline (60% of AMI), normal market forces will produce enough housing.  Below that but above the zero-NOI halocline (25% of AMI), capital cost buydown programs (soft debt or soft equity) will create sustainable public-private affordable housing.

 

Below the bottom halocline (25% of AMI), the cost to operate is greater than the affordable rent, and only ongoing subsidy (or charitable donations) will render property viable.

 

Boston Rescue Mission, 1899

 

Couple that with strict enforcement of habitability taking lower-end stock (the historical rooming house, still used elsewhere in the world) out of the inventory,

 

Rooming house, Mogollon, New Mexico, the brothels were segregated in another wing

 

and you have the recipe for rising homelessness:

 

Most of the homeless surveyed in greater Los Angeles, 78%, said they were living here before they lost shelter, contrary to popular belief that the warm climate drew the homeless from other places.

 

“The perception that homeless people come here from other places has allowed a sense that it is not really our problem,” said Mitchell Netburn, executive director of the Los Angeles Homeless Services Authority, which compiled the report. It is based on a count in January 2005 of people in shelters, on the streets and other places. In addition, 3,000 homeless people were sampled to project demographic and other trends in the overall population.

 

The authority surveyed the homeless in 85 of the county’s 88 cities, finding 82,291 homeless people there, and combined its count with separate censuses taken in the three other cities.

Census takers found the homeless population spread out across the sprawling county, with pockets of homeless in generally affluent communities in Los Angeles like Brentwood and suburban expanses outside the city limits like the San Gabriel and Antelope Valleys. The City of Los Angeles had by far the largest homeless population, with 48,103 people.

 

The report said 49% of the population was chronically homeless, meaning they had a physical or mental disability and had been living in a shelter or in and out of them for at least a year.

 

The color of poverty is not white or black, but rainbow green:

 

The median age of the homeless was 43, and nearly 39% of the homeless were black. Twenty-nine percent were white and 25% Hispanic.

 

In America, homelessness is predominantly an urban phenomenon.  Even though there are more poor in rural areas, few of them are homeless, because land is cheaper, building costs are lower, and rural areas are much more tolerant of ’substandard’ homes.  Self-built housing is a proud tradition in rural America, as anyone knows who drives the old US highways in preference to the interstates.

 

In urban areas, without that substandard supply, the cost to create new very-low-income housing is staggering:

 

For one thing, [Mayor Villaraigosa] he had made a campaign promise to increase the supply of affordable housing and recently pledged $50 million for a trust fund that has helped finance more than 3,500 units for the poor since 2002.

 

That doesn’t sound too bad — $14,000 apiece — but that’s only a portion of the costs, and the resulting apartments are affordable up near the market halocline, not the homelessness halocline.  Rooming houses are coming back, in Los Angeles as elsewhere, with the rarefied title of Single Room Occupancy (SRO),

 

SRO housing, Los Angeles, November, 2005

 

but with development costs topping $150,000 apiece in Los Angeles, $50 million will buy you 335 formerly homeless apartments, or about or 1 for every 265 homeless Angelenos.

 

The Los Angeles County government has allocated $25 million for increased emergency shelters, which advocates for the homeless say are badly needed; there are 18,000 homeless shelter beds, which critics call paltry considering the much higher number of homeless people.

 

With total development costs easily topping $150,000 per apartment, the money won’t go very far. 

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