At the Mayoral Housing Summit at the UCLA Anderson School, sponsored by the Los Angeles Business Council, Mayor Villaraigosa announced his support of a $1 billion bond to finance solutions to the housing crisis. I've discussed the idea of a housing bond with my colleagues, with housing advocates, and with business leaders—the business community has been especially creative in promoting a bond. I was thrilled today to hear the mayor's support.
I have no doubt that the time has come for dramatic solutions. Just look at the statistics around housing costs in Los Angeles:
- Average home price in Los Angeles County, September 2005: $494,000
- Monthly payments on such a house, assuming 10% down, 6% interest, and 30-year fixed rate: $2,665/month
- Maximum portion of income under federal guidelines that should go to housing needs: 1/3
- Salary required to afford such a house under that guideline: $96,000/yr
- Average rent for an apartment, Los Angeles County, September 2005: $1,441/month
- Full-time wage required to afford such an apartment under federal guideline: $27/hr
- Occupancy rate for rental housing in Los Angeles: 97%
Investing funds from our city's affordable housing trust fund in tandem with the Multi-Family Housing Project funds from Proposition 46, we have funded more than 3,500 units of affordable housing in the past three years.
$100 million in city funds have leveraged $600 million in outside funds combining county, state, federal and private sources.
Although Los Angeles holds only one-tenth of California's population, our ability to add our own financing won us one-third of of the Prop 46 funds at stake. We demonstrated the need, we demonstrated the means, and now we're seeing the product.
And is $1 billion too high a number? Just considering the homeless problem alone, I can tell you that it is not. (With $100 million a year over ten years, we could begin to house the 91,000 people who nightly sleep on the streets of Los Angeles County.)
The Mayor led on homelessness today too, promising to increase the housing trust fund by $50 million. This money would go primarily into projects serving low-income and formerly homeless individuals. These are the people who live in the cold borderlands between however tenuous a hold on a home and the cold, hard streets. With targeted attention to these projects, we can increase the options that have disappeared between the $494,000 home and the shelter bed. We can give people hope.
Money isn't the only thing we need, and I will follow up with a post on how we can change our zoning laws and our building practices to build a city for a future that has already come to pass. As with financing, this is an area where our city has taken the right steps, has figured out some of the answers, and needs to commit to them on a broader scale. From what I've seen, I know we can do it.