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California and the West

Addressing the Lack of Affordable Housing

Legislature: As middle-class workers increasingly find themselves priced out of areas where they work, state lawmakers are looking for remedies.


SACRAMENTO — In West Los Angeles, a kindergarten teacher's average salary falls $67,000 short of the income needed to buy a median-priced home in the school neighborhood.

In Palo Alto, a police detective's pay would have to triple to finance a home in the community the officer patrols.

In San Francisco, minimum-wage workers would have to toil 146 hours a week to pay the average rent on a two-bedroom apartment.

As California's economy continues to sizzle, drawing waves of newcomers to the state and driving unemployment down to historic lows, the gap between those who can afford a place to live and those who cannot is widening. And for the first time in decades, housing experts say, Sacramento politicians seem serious about closing it.

A primary reason is that housing problems are no longer seen as a poverty issue. With the housing crunch increasingly grinding at middle-class Californians and frustrating employers, many of the state's business leaders are joining the ranks of those calling for relief.

Support is building especially among the leaders of California's new Internet economy, who complain that the service sector, and even the lower paid segments of their industry, are faltering under the housing pressures.

Gov. Gray Davis and the Legislature are considering a stack of reforms to remove hurdles to construction and make housing more affordable for the working class. The proposals range from putting a $1-billion bond measure on the November ballot to making it more difficult for environmental groups to delay building projects with lawsuits.

"The Legislature understands we have a crisis on the horizon," said state Sen. Jim Brulte (R-Rancho Cucamonga), part of a bipartisan coalition pushing a package of housing bills this spring.

"This is not just about affordable housing, this is about rebuilding the California dream," said state Sen. Richard Alarcon (D-Sylmar), the main architect of the housing bond and another coalition member.

Housing Push Finds Widespread Support

All in all, more than 150 pieces of legislation addressing housing concerns have been introduced in the Senate and Assembly, making it one of the hottest political issues of the year in the Capitol.

That newfound prominence has come, in part, because of an unusual convergence of advocates for labor, business, farm workers and the homeless, which has given housing reform great political clout.

"We see a general concern, especially on the part of high-tech employers, who are competing with companies all over the country," said Allan Zaremberg, president of the California Chamber of Commerce, an influential lobby that has become a strong advocate of housing legislation this year. "The housing market at this point is creating a situation where they are not as competitive as they want to be."

Corporations are not only concerned that recruiting is being hamstrung by housing costs, but that productivity is as well, because so many workers are spending hours commuting to and from the office. Moreover, companies are worried that housing problems could affect the quality of the future employee pool, because if educators cannot afford to reside in California, public education will suffer, Zaremberg said.

Those fears are not unwarranted. Already, indicators point to some grim new realities in many of California's most prosperous areas. Over the past decade, construction of new housing has simply failed to keep up with the pace of population and job growth, creating a basic supply-demand disparity that is expected to get much worse in the next few years.

Experts say that for California to meet its housing needs, it must build 250,000 new homes a year. But last year, only 140,000 housing units were built in the state, and only about 152,000 are expected to be built this year, according to the Construction Industry Research Board, a Burbank-based group that tracks housing permits.

"Our clients, who have always been on the bottom tier, now can't even compete for the miserable housing they've had," said Christine Minnehan of the Western Center on Law and Poverty, which has long advocated low-cost housing. "People in San Jose are even renting their living room floors. People don't live like that unless they have no choice."

Put another way, state officials have estimated that for California to strike a healthy balance between employment and housing, it must build one new home for every 1.5 new jobs created. But in all of California's booming business regions, that ratio has careened out of control--to 6.5 in San Francisco, 6.0 in Los Angeles and 4.7 in Orange County.

"California really is the epicenter of this new economy. This is where all the action is going to be in the foreseeable future. But this is not where the action is" in the home-building market, said John Burns of the Meyers Group, an Irvine-based real estate research firm.

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