Business & Economy

Why SoCal is at a tipping point in its housing affordability crisis

The housing affordability crisis in LA is worsening, and many experts say building new homes is not enough.
The housing affordability crisis in LA is worsening, and many experts say building new homes is not enough.
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Paying affordable rent, let alone homeownership, has become an elusive dream for many trying to survive Southern California's housing market.

Seven decades ago, California home prices weren’t that different from the rest of the country’s. But the building supply has not kept up with population growth, driving housing prices through the roof.

Young adults like Joshua Baum can't fathom owning a home unless he gets help from his parents. The UCLA graduate student said that need debunks the American dream, the one that lets you imagine if you work hard, you can one day afford a house.

"This is not the feudal ages where if your family has property you’ll be alright," Baum, 24, said. "But if your family doesn’t have property, you won’t be alright. This is wrong."

Starting today, KPCC is kicking off a three-day look at California’s housing emergency. We’ve been at a crisis for years, but things are getting worse and seriously impacting all of our lives. 

What's different — and why we may be at an inflection point — is there's now a critical mass of state leaders saying California can’t just let the markets and local government take care of the housing crisis. A housing package is in the works in the state Legislature that supporters say will address funding of affordable housing and streamline the development process. 

After years of failed attempts at attacking the problem, there's a glimmer of hope that state lawmakers will begin to carry through on promises to solve a problem that's been decades in the making.

How bad is it?

Zillow pegs the median home price in L.A. at $630,000 — that's more than three times higher than the national median. It's not really shocking then that home ownership rates in Los Angeles and Orange counties are some of the lowest in the country — about 50 percent.

As for L.A. rents—they’re nowhere as high as say, San Francisco, but they are still expensive — about $1,340 for a one-bedroom — and people in L.A. don’t make as much money as those in the Bay Area. So more than half of L.A. residents end up putting at least a third of their paycheck toward the rent. (Explore an interactive map of how much of their income SoCal residents are putting toward rent, by neighborhood.)

In worst-case scenarios, the market is pushing some people out of their homes. High housing costs have helped send the homeless rate in L.A. County up by 23 percent this year. That’s about 58,000 people on the streets. The city has one of the highest homeless rates in the country.

In a recent report, the U.S. Department of Housing and Urban Development estimated that roughly 567,000 people living in Los Angeles are in danger of falling into homelessness

How did we get into this mess? 

In L.A., as in the rest of coastal California, we have no shortage of people who want to live here for the jobs, the weather, the ocean, the culture, the diversity. It’s really got it all.

But Steve Renahan, the Senior Policy Director at Shelter Partnership, told KPCC that that is part of the problem: 

"We got into this by denying the laws of supply and demand that apply to real estate," Renahan said.

A federal retreat from providing affordable housing beginning in the 1980s combined with restrictive zoning and permitting processes that impede apartment construction have made the crisis how it is today, Renahan said.

Most of L.A. is already built up, much of it as low-slung, ranch-style homes meant for single families. To make enough housing to keep up with demand, the city needs to build taller and denser with say, multi-family apartment buildings, in and around these areas – what’s called in-fill development.

The problem is the people already living in desirable neighborhoods often don’t want more development. Richard Close, president of the Sherman Oaks Neighborhood Association, said residents are worried that new building could bring change for the worse — change of neighborhood character, more traffic, higher property taxes:

"We’re not an area that’s used to high-rise apartments and tenement buildings, etc. Clearly, people want to preserve their lifestyle," he said.

Take Two today is examining one of the tools that opponents of housing projects use to derail them — a state statute meant to protect the environment called the California Environmental Quality Act or CEQA.

Isn’t the construction I see making a difference?

L.A. is doing more building than many of its neighbors, but even then, it’s not enough to keep up with demand.

Housing construction isn’t uniform across the city. There’s a lot more activity in downtown compared to say, West L.A.. And often the new units are too expensive for the average resident.

We’re going to talk this week about what happens when a neighborhood suddenly sees a lot of development. One of the stories listeners will hear tomorrow is about how the Crenshaw line is spurring new market-rate development in South L.A. and how that’s stoking fears about gentrification.

L.A. is also seeing the construction of subsidized housing for lower-income households but on a much smaller scale. We’ll explore how the vast majority of affordable housing has been built in the very poorest neighborhoods in L.A. County and how almost half of the cities in the county have built no affordable housing at all. One factor: affordable housing is very expensive to build for what property owners are able to charge for rent, so there’s not a real drive to develop affordable housing. 

Are there ways to turn this around?

There are a lot of solutions floating out there. Like the idea of speeding up the approval process for developers. You’ve also got cities mandating that builders of market-rate housing include a certain amount of subsidized housing with inclusionary zoning. Santa Monica, for one, is requiring developers who want to build in downtown to price as much as 30 percent of their units below market-rate.

The city of Los Angeles is inching closer to charging developers a so-called linkage fee to build more affordable housing. But no one thinks there’s a magic bullet. Housing advocates have to fight the fight on multiple battlefronts, and there’s also a lot of disagreement about the best strategies. We’ll have a look at the tensions even within the pro-housing movement over the next best steps.

I have a renter's story. What can I do?

We want our listeners to be involved in our coverage. In our comment box below, let us know if you’re living with roommates because we want to talk to you. We’re also asking listeners to tweet us at @KPCC about their first-ever rental experiences. Use the hashtag #myfirstrent. Share a photo if you’ve got one.

Charts by CALMatters; see its full report on California's housing costs.

Series: SoCal's Housing Crisis

This story is part of KPCC's in-depth coverage of Southern California's housing crisis. Follow along as we try to answer: How did we get to this point? What’s being done to fix the problem? And where do we go from here?

Read more in this series and let us know your thoughts and questions below in the comments section or on our Facebook page.