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Little Gain Seen in Affordable Housing

Loss of rent-controlled units in L.A. almost equals the building of new ones, study says.

September 07, 2006|Nancy Cleeland | Times Staff Writer

The city of Los Angeles has made little headway in expanding the supply of housing for low- and middle-income residents because old affordable units have been destroyed almost as quickly as new ones have been built, according to a new study.

The analysis, to be released today by the Southern California Assn. of Non-Profit Housing, is likely to fuel an increasingly heated debate about housing and gentrification in the city.

Using municipal and U.S. census data, the study by the trade association of nonprofit housing developers found that 12,800 affordable rental units were built through city incentive programs since 2001, while 11,000 older rent-controlled apartments were either torn down or converted to condominiums.

The study found that the loss rate has accelerated, far outpacing new construction since 2005.

Market-rate rents in Los Angeles grew by about 30% during the same five years, to $1,770 a month, according to RealFacts, a Bay Area real estate consulting firm that surveys large apartment complexes.

Paul Zimmerman, director of the association that produced the report, said it showed the need for a comprehensive housing strategy in Los Angeles.

"Housing is like water," he said. "You need a production pipeline and a preservation strategy. Unless you have both you're not going to take a dent out of the problem."

The association backs a moratorium on the demolition or conversion of rent-controlled apartments. Los Angeles City Councilmen Bill Rosendahl and Alex Padilla have proposed moratoriums for their own districts. Their proposals haven't drawn much support from colleagues, and Rosendahl's is now before a committee.

"I like incentives better than requirements. This is America," said Councilman Herb Wesson, who is the chairman of the housing committee that has the bill.

He added later, "I gave Mr. Rosendahl my word I would talk to him and listen to his argument. But I'll be honest, this problem is a city issue and I'm not big on piecemeal approaches."

Rosendahl's 11th District, on the Westside, has lost more than 4,000 rent-controlled units since 2001 -- one-third of the citywide total, according to the analysis.

"I want to take a time out and come up with other strategies," Rosendahl said. "It's not fair that the ocean and fresh air be just for the rich."

He said he expected his moratorium to pass this year, despite opposition.

Wesson recently proposed his own strategy, which the full council adopted last month. The measure created a task force to look at comprehensive solutions and a committee to study the 1978 rent control law that limits rent increases in older buildings.

Developers and business leaders, who acknowledge a severe shortage of affordable housing, have argued for market-based solutions that encourage more dense housing along transportation corridors.

"At minimum you have to develop the opportunity for the private sector to supply those affordable units. That's at least half the battle. Beyond that, the marketplace will dictate where such profitability resides," said Stuart Gabriel, director of the USC Lusk Center for Real Estate. "From an economic perspective, rent control is not always a good long-run solution in the sense that it does not result in significant added supply of affordable units.... We need to turn our attention to a series of incentive structures and programs that go beyond rent control."

Gabriel saw the results of the analysis differently.

"The fact that we're even able to remain at the level of prior years should be viewed as a positive outcome, given market forces that make it nearly impossible to develop affordable housing," he said.

Zimmerman said affordability in Los Angeles has been shrinking for 25 years in a largely unfettered market.

"I don't trust the market," he said. "If we had a functioning market, it would be producing housing that is affordable to people at different income levels. But because of macroeconomic factors, the market is only producing high-end product now."

nancy.cleeland@latimes.com

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