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Out of Step With a Trend

April 09, 1985

New statistics on last year's construction activity in Orange County are coming in, and they only confirm what renters and public-agency officials already knew--there is a trend away from home ownership to apartment rentals, but the construction industry has not been following the trend.

For example, the Orange County Housing Authority reports that the number of renters compared with owners has risen 24.3% since 1983, a rate of increase far above the 1.6% that occurred between 1974 and 1983. And the monthly cost of a four-bedroom rental averaged $854 last October, compared with $264 nine years ago.

How has the private sector responded to the trend? According to one report, of the nine Southern California counties, Orange was next to last in the percentage growth of multifamily dwellings in 1984. And although five of the ten most active building firms in Southern California last year were Orange County businesses, only two of them were building apartments, and those accounted for only about 16% of the total living units that the two firms constructed.

The lack of new construction, compounded by the demolition of affordable but substandard housing, has created a shortage of affordable housing that creates other serious community problems. For one thing, it increases housing discrimination. With demand high and supply low, landlords have a wide choice of tenants, and the sharp increase in formal complaints to the Orange County Fair Housing Council indicates that the greatest discrimination in housing is against families with children, even though denying access to apartments to families with children has been declared unconstitutional by the state Supreme Court. The apartment shortage and high rents also affect the economy by drying up the labor pool and forcing some companies either to relocate or plan for expansion elsewhere, and others to decide not to come to Orange County at all.

All is not bleak, however. The Irvine Co. recently received approval to build two projects that will include nearly 700 apartments (some in the so-called "affordable" range for families with yearly incomes of less than $30,000), and 550 apartments have been approved in Costa Mesa for construction at Fairview State Hospital for employees who can't afford apartments elsewhere.

We hope that these projects are signs that builders are finally stirring to meet the market need. Until recently they have been ignoring it, concentrating instead on homes for higher-income buyers and opposing any government intrusion. We would rather see the private sector do the job with government helping by speeding up its processing procedures and easing density and square-footage requirements. But if the private sector doesn't respond, government eventually must intervene with policies that point the private sector in the direction in which everyone else seems to be going.

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