Los Angeles Mayor Antonio Villaraigosa on Monday will unveil a $5-billion, five-year plan to build housing for the poor and middle class. The blueprint, which calls for thousands of new homes along subway and bus lines, and developments with people of all incomes living together, would, according to the mayor's deputies, alter the look and feel of the city forever.
But the plan, which many City Council members and business and housing groups said they had not yet seen, is being released while the housing market is a shambles, the state is facing a massive budget shortfall and the economy is teetering -- challenges that lead some to wonder whether it is feasible.
"I know that budgets are tight . . . credit is almost nonexistent," Villaraigosa said Saturday to a room full of community and labor groups pushing for more affordable housing. "But we're going to reject the cynics . . . and build a brighter future for those kids who are in the corner over there."
The mayor got a standing ovation at the union hall near downtown Los Angeles, and chants of "Si, se puede" ("Yes, we can") from the dozens of people in matching red T-shirts in his audience.
Others were more skeptical when they were presented with the broad brush strokes of the plan. Some developers object to a so-called mixed-income provision that would require affordable housing to be included in new housing developments. They say that such a policy -- which labor and housing groups have been pushing for years -- would cast a pall over entrepreneurial efforts.
"We will work with the mayor, but the policy as it stands now does not work," said Carol Schatz, chief executive of the Central City Assn., a business group that represents many of the city's developers.
"It is going to make housing less affordable for everybody," said downtown activist Brady Westwater.
On the other hand, community and labor groups, key players in the city's politics, are lobbying hard for the so-called mixed-income plan.
"We need a new solution," Donna Rodriguez said Saturday. The account manager, who lives in Silver Lake, said she makes $42,000 a year and spends half of her take-home pay on the $1,150 rent for her one-bedroom apartment. "Look," she said, waving copies of her paycheck and rent checks to illustrate the problem. She added that she shares a bed with her 8-year-old daughter, Lily.
"I want bunk beds," Lily chimed in as her mother smoothed her hair and told her to tell members of the media that she wanted her own bedroom.
Other elements of the plan, such as preserving existing affordable units and building near transit centers, are things the city already has pledged to do.
Housing has become an increasingly pressing political issue in Los Angeles. Last month, the Los Angeles Business Council released a report saying that the high cost of housing, especially in places like the Westside, "threatens the region's continued economic growth."
Los Angeles was designated the least affordable metropolitan area in the country last year, according to the Business Council report, because so many people pay so much of their incomes for housing. The city also has the largest homeless population in the nation. In addition, although private developers have built many high-end apartment units and condos over the last few years, there has not been a similar increase for households earning less than $75,000 per year.
"We do not produce what we need to produce. We just don't," said Helmi Hisserich, deputy mayor for housing and economic development policy.
Under the mayor's plan, the city would pledge $200 million a year for five years from various sources, including the city's Housing Authority, its affordable housing trust fund and its Community Redevelopment Agency, to build affordable housing.
Most, if not all, of that money would have been used for housing already, but by setting out a comprehensive plan the city hopes to use its money more efficiently and to be more competitive in winning grants, tax credits and bond funds from government and private sources. In all, the plan depends on raising an additional $4 billion over five years.
Villaraigosa acknowledged that in the current climate of economic uncertainty, some of the money the city is counting on may not come through, but he said he was confident other sources might open up. Federal dollars may flow to the city because of the foreclosure crisis, for example. He said he "sat down with three economists yesterday" and they assured him the plan was sound.
The city already has one big financial commitment from Enterprise Community Partners, a nonprofit that finances affordable housing across the country and has pledged $700 million over the next five years to Los Angeles to finance affordable housing projects here and to provide matching funds to attract additional private investment -- a crucial role in today's tight credit environment.
Other elements of the mayor's plan include: