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California affordable housing projects suffer from loss of funding

Duroville trailer park residents are among the victims of a loss of state and federal funding that affordable housing projects had historically relied on.

August 12, 2012|By Alexandra Zavis and Jessica Garrison
  • Fire sprinklers are installed on a mobile home at Mountain View Estates, which was being built to replace the Coachella Valley trailer park known as Duroville. But after the state dissolved county redevelopment agencies, the project is in limbo.
Fire sprinklers are installed on a mobile home at Mountain View Estates,… (Irfan Khan / Los Angeles…)

Four years after a dilapidated Coachella Valley trailer park known as Duroville became a national symbol of slum housing, Riverside County officials were well into investing millions in a solution: building a new mobile home community for hundreds of the park's impoverished residents.

But the plan abruptly stalled this spring when cash-hungry state officials yanked back $12.1 million in funds that local officials needed to complete the project.

The action "puts in limbo the health and safety of men, women and children who had planned to leave the squalor of Duroville for a safe, clean home," complained Riverside County Supervisor John Benoit, who called the state move a "travesty."

At a time of unprecedented need for affordable housing in California, the Duroville scenario is playing out in various ways across California's small towns and urban centers. Major sources of state and federal funding are collapsing, jeopardizing thousands of new homes targeted for struggling families, including projects that were ready to break ground.

The biggest loss for local officials has been about $1 billion a year in funding that flowed from more than 400 now-defunct municipal redevelopment agencies, all abolished to help close the state's budget gap.

Federal funding for affordable housing has also been slashed over the last two years. In the year ending in June, California received $131 million from the HOME Investment Partnerships Program, less than half the amount it got in 2010. Community Development Block Grant funding, which has also been used to build affordable homes, fell 42% in the same period.

On top of that, nearly $5 billion for housing raised through the sale of bonds approved by California voters in 2002 and 2006 is about to run dry.

Developers around the state say they can't remember a bleaker time for affordable housing construction.

"It's a disaster," said Tom Scott, interim executive director of the Southern California Assn. of NonProfit Housing. Construction of homes that working families can afford will "come to a halt," he said, predicting an uptick in people living in garages and renters having less money for food and other necessities.

At least 177 projects statewide totaling 12,000 homes had been counting on redevelopment money that has been redirected, according to figures compiled by the advocacy groups Housing California and the California Housing Consortium. Without access to those funds, developers say it will be difficult for them to raise additional financing.

So far, only a handful have raised the money to proceed, said Julie Snyder, policy director for Housing California.

Meanwhile, the poor economy is driving up need and record foreclosures are making the situation worse, Snyder said. Those forced from homes by banks are being pushed into an increasingly expensive rental market. Lenders are taking months, even years, to put repossessed homes back on the market and imposing tougher standards to qualify for a mortgage. And many of the cheaper, foreclosed homes put up for sale — in places like the Inland Empire — aren't where jobs are plentiful, Snyder said.

In Los Angeles County, more than 51,000 people are homeless on any given night, and there are long waits for apartments with below-market rents.

"Any project that we build is filled instantaneously," said John Molloy, executive director of PATH Ventures, a nonprofit that builds housing for the homeless. His organization has six projects under development in Los Angeles and Orange counties that could be imperiled by the loss of redevelopment funds.

Wendy Brooks spent more than a year in emergency and transitional housing before moving into the Ford, a low-income apartment building developed by SRO Housing Corp., a downtown Los Angeles nonprofit. A retired paralegal and onetime professional dancer, Brooks said she never imagined being in need. But she said the economic collapse wiped out her pension, and the house she was renting was foreclosed upon.

"For the first time in my life, I was homeless," said Brooks, 62. "I have lived a middle-class life. I am well educated. But it happened to me."

Redevelopment helped fund more than 80% of the 2,383 units developed by SRO Housing, including Brooks' studio in a converted skid row hotel once dubbed "Hotel Hell." The group has another project slated to break ground at the end of the year but won't consider further ones in the current funding climate, said Executive Director Anita Nelson.

"We were eyeing a property, but when all this happened we just said, 'Definitely not,'" she said.

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