Explaining Southern California's economy

Workforce housing in LA costs too much. Here's how to fix it

Expo Rail

Ashley Myers-Turner/KPCC

Metro rail lines in Los Angeles, coupled with the development of housing along transit corridors, could make the city a more affordable place to work, according to a recent report from the Los Angeles Business Council.

Los Angeles isn't a cheap place to buy or rent a house or an apartment. Only New York and San Francisco will cost you more.

According to UCLA's Paul Habibi — he's at the Anderson School of Management and focuses on real estate — this is dealing a grave blow to the city's competitiveness. But he has a solution, which he's outlined in a just-released report, produced in conjunction with the Los Angelss Business Council, an organization devoted to sustainable economic development in the region.

The idea laid out in "Developing Livable Communities: Enhancing Economic Competitiveness in Los Angeles" is straightforward. We don't have enough affordable workforce housing. But developers don't want to develop for the portion of the market that needs that housing the most: people earning between $42,400 and $63,600. Those folks — what Habibi calls a "donut hole" — make too much to qualify for subsidized housing, but don't make enough to afford the high-end housing that developers prefer (for obvious reasons).