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Amid the Boom, a Housing Crisis

July 12, 1998

Lost amid all the cheerful news about California's rebounding economy and rising home prices is public awareness of a crisis in affordable housing. Nowhere is the nationwide problem more acute than in California. The short supply of housing already is driving up rents, and it is only a matter of time before the shortfall pushes home prices well beyond the means of even much of the middle class.

Separate reports by the Department of Housing and Urban Development, the Center on Budget and Policy Priorities and the California Building Industry Assn. attribute the affordability problem to several factors, including a dwindling number of low-rent apartments on the private market as the number of low-income renters increases. Government-subsidized housing doesn't begin to keep pace.

The HUD report cited Los Angeles, Anaheim, Sacramento, San Bernardino, San Diego and San Francisco as the worst cases for working and poor families. In California's metropolitan centers, three-quarters of poor families paid more than half of their income for rent, according to the Center on Budget and Policy Priorities. The industry association notes that only Hawaii and New York have lower rates of homeownership than California.

Washington can help. HUD Secretary Andrew Cuomo has asked Congress, which is now working on budget appropriations, to increase spending for rental assistance and other programs to create and rehabilitate rental units. Legislation with bipartisan support has been introduced in both the House and Senate to increase the popular and effective low-income housing tax credit, which has been successful in encouraging private development of affordable housing, especially in cities.

Local and state authorities need to seek creative methods and new incentives to boost the housing inventory. In Orange County, the city of Costa Mesa took the novel approach of fixing up rundown motels and converting them into small apartments. Grass-roots nonprofit corporations have taken much of the initiative to develop affordable housing but need more assistance in cities like Los Angeles, which spends only 2.5% of its annual budget on housing, compared with New York's 11%.

The failure to address the shortage is apparent in the illegal, often dangerous conversion of garages into rentals and in jammed, tiny apartments. The housing shortage hurts whole communities. Quick action by Washington could help forestall the damage.

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