The next mayor of Los Angeles must take action to address the residential real estate market crisis. The city’s future depends on it, according to Raphael Bostic, from USC’s Bedrosian Center on Governance, and Tony Salazar, from McCormack Baron Salazar.

In an Op-Ed Monday in the L.A. Times, Bostic and Salazar say Los Angeles, a city where 63.1 percent of residents rent their homes, is in the midst of a crisis in rental housing.

A recent study by the U.S. Department of Housing and Urban Development laid out the stark facts. Los Angeles rents have increased, after adjusting for inflation, by nearly 30 percent over the last 20 years. During the same period, renter incomes have decreased by 6 percent.

Rent to Own Image

One important part of the problem is an inadequate supply of affordable rental units. Only 37 units are available and affordable for every 100 would-be renters living at the average renter income level.

Moreover, the home foreclosure crisis, which many predicted would relieve pressure on the rental market by increasing the volume of rental units, has instead exacerbated the problem. Families who lost their homes through foreclosure have turned to the rental market and are competing for units, which has made for an even tighter rental market and more upward pressure on rents.

Housing Affordability Problem Has Extensive Reach

Adequate affordable housing is a key factor for continued growth in a region. Without it, employers can’t hire enough skilled workers, and cities have trouble attracting new businesses. The abolishment of redevelopment agencies in California, which Bostic and Salazar say provided more than $1 billion statewide and $50 million in Los Angeles alone each year for affordable housing, has stymied development at a time when the city needs it most.

The three leading candidates for LA’s next mayor – Eric Garcetti, Wendy Greueland and Jan Perry – apparently recognize these issues and the challenges that come with them. At a forum last month convened by Housing for a Stronger Los Angeles, they each expressed the need for dedication and commitment in order to solve the city’s housing crisis.

Bostic and Salazar list the following methods for the next mayor to use to challenge these issues:

  • Establish a dedicated, consistent source of funding to support affordable housing
  • Take advantage of the opportunities presented by transit expansion
  • Attack homelessness with renewed vigor
  • Address the city’s foreclosure crisis before it debilitates neighborhoods
  • Preserve the affordable units that we have
  • Los Angeles is an expensive place to live

Los Angeles is an expensive place to live. Its broad economic base, diverse and interesting population and temperate climate make it a very desirable place to live, which necessarily drives up costs. This won’t change. The next mayor must take an assertive approach and deal with the affordability challenges directly.

Source: Los Angeles Times

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This is filed under National Markets.


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