Despite a global credit crunch, Los Angeles Mayor Antonio Villaraigosa is moving forward with “Housing That Works”—a five-year, $5 billion plan to build 20,000 affordable housing units. The goal: to make L.A. a more affordable place to live.
The L.A. plan leverages $1 billion in public funds into the $5 billion investment. The program covers the construction of new housing and the acquisition and preservation of existing housing. Today, only 11 percent of the area's households can afford a median-priced home; about 40,000 people sleep on city streets each night.
“We are the least affordable city in the country in terms of available affordable housing,” says Jeff Schaffer, Southern California director for Enterprise Community Partners, a Columbia, Md.-based nonprofit that is injecting $700 million in the project.
One group caught in this crunch is L.A.'s workforce. “We don't have anything for the people in the middle middle [class],” says Jonathan Powell, press deputy for Villaraigosa. The program will also deliver 20 sustainable transit communities and 2,200 supportive housing units; expand Section 8 voucher programs for the chronically homeless; preserve 14,000 affordable rental units; and educate Angelenos about their rights as landlords and residents.
The problem, of course, is funding the program in these shaky financial times. The city and Enterprise are shouldering a hefty burden, but grants and tax credits are also essential. “There's absolutely a capital issue today impacting real estate investment, even on the affordable side,” says Paul M. Cummings, Enterprise's senior vice president of tax credit syndication. “A lot of our investors had been banks.”
As a result, Schaffer is looking for new investors such as unions and utilities. “We're looking beyond traditional investors,” he says.
At the mayor's office, the financial problems made affordable housing an even bigger priority. “It just brought a new sense of urgency to this issue,” Powell says.
