Opinion – Ezra Klein: Los Angeles doesn’t know how to deal with housing crisis and homelessness surge

In 2016, the people of Los Angeles overwhelmingly approved the so-called HHH Proposal, which raised $1.2 billion through a property tax to create 10,000 new apartments for the homeless. “Voters have radically changed our future,” said Mayor Eric Garcetti, “giving us a mandate to end homelessness in the next decade.”

Six years later, neither the warrant nor the money proved enough. In 2016, Los Angeles had 28,000 homeless people, of whom 21,000 were homeless — that is, living on the street. The current count is closer to 42,000 and 28,000 respectively. “Prop HHH” built units, but slowly and at a frightening cost.

The city says 3,357 units were built, and the most recent audit put the average cost at $596,846 per unit — more than the average selling price of a Denver home. Some cost more than $700,000.

Karen Bass and Rick Caruso, candidates vying for Garcetti’s post, don’t tend to agree much, but they do agree that HHH has not kept its promise. “Spending that much per unit doesn’t make sense,” Caruso told me.

Bass wasn’t much kinder. “If I’m elected mayor, I want to deal with the homeless like it’s a hurricane. I mean, in normal times, we all have these needs, but this is a hurricane, we need to get people off the streets right away. Lots of rules and regulations.” of normal times need to be loosened.”

But it’s not as if Garcetti wants his main effort to become an object lesson in government irresponsibility. Listening to him now, there is an unmistakable air of fatalism, lost fights and learned limits. “Most causes for the homeless and most solutions are beyond the mayor’s jurisdiction,” he told local radio station KCRW.

This kind of sentence is a gimmick for a rookie candidate like Caruso. “We have all these elected officials who will give you every excuse as to why things can’t be done. That to me is a real attitude problem. It wouldn’t last long in my company.” But finding a solution requires clarity about what the problem is. And the problem here is perverse.

Yasmin Tong is the founder of CTY Housing, a consultancy on low-cost housing projects. In 2015, she won the Unknown Hero award from an industry association in California. She explains how affordable housing is built when all goes well.

First, it takes a year to find available land, which must be close to public transport, markets and pharmacies. You need to have reason to believe that you can win community support or overcome opposition. It needs to be able to outperform developers that can pay more or get financing faster.

Step Two: Get Local Approval and Licenses. This also takes a year or more if all goes well. But often not all goes well. Neighbors fight with you and often sue you.

In Venice, the Dell Community project is trying to turn a city hall parking lot into a 140-unit building for homeless people and low-income artists. The development is being fought by a number of local owners.

They accuse, among other things, that “Venice needs this land to solve the chronic parking shortage”, that the housing would be “an architectural monstrosity” and developed “without environmental analysis in a tsunami risk zone”. (When do Los Angeles residents want affordable housing? Now! Where do they want it? Not here!)

To survive local opposition, it is often necessary to accept a series of concessions that increase costs: hire expensive architects, remake designs, hire extra lawyers and auditors. Even if a project survives all this, its unit cost is higher—which becomes one more point used in opposition to the next.

This is a theme in which Caruso’s anger at the slow pace and high cost of developing LA collides with his sympathy for—or his need to win votes from—angry owners. Caruso is a contractor known for mega projects. “There are always community concerns. You always take the time to listen to them and find common ground,” he told me.

“When you go into neighborhoods like Venice, what I hear is that they are very supportive of affordable housing; they just want the project to be designed and operated in a way that reflects their neighborhood. I don’t think the contractors or the city should discuss this. the right thing to do.”

That might be true. But once you agree to everything the local homeowners want, you end up with small, expensive projects.

Caruso wants to build more and cheaper homes. It is very excited about low cost pre-made projects. Want to hear more from local owners. But there is a tension between these two views that he has not resolved.

Bass, however, had no radically different answers. She was quicker to emphasize the need to use the land the city owns, but as the Venice project shows, that only gets you so far.

What none of the candidates suggested was any change in the power that local landowners have to slow down or stop these projects. And it’s fair. But this indicates the difficulty they will have to obtain radically different results.

Ron Galperin is the City of Los Angeles inspector responsible for auditing the HHH. You would expect him to praise the project’s effort to match every dollar with $5 from other funders, but that would be wrong.

“Basically, all the inflated cost that comes with regulations and limitations is intended to cover the cost of regulations. They get $134,000 from the city, but the hurdles they have to overcome to get them can go beyond that amount. insane.”

Heidi Marston headed the Los Angeles Homeless Services Authority until April, when she resigned. “There’s tons of money going to the homeless. My budget was almost $1 billion. But the money comes with such stringent requirements that it’s almost impossible to spend it.”

Bass’s sympathy with this view does not provide an obvious solution. She spoke about the possibility of public borrowing so that contractors can move forward while seeking full financing. Both she and Caruso mentioned vague plans to ask for more private funding. None have a plan to drastically change the way housing is financed.

And some of your impulses can make things worse. On his website, Bass promises “accountability, transparency and proper oversight” for HHH’s funding. Caruso says he plans to hire an independent firm to audit HHH.

Transparency, oversight and efficiency sound good and attract votes. But existing transparency, oversight and efficiency requirements have alienated stakeholders.

If land is found, titles awarded, and financing assembled, construction can begin. Labor costs are already high in Los Angeles, but they are even more so for HHH projects — charges add about 20% to the market value of industry labor.

Then there are California’s extensive green building codes. “Standards are higher than anywhere else in the country,” Yasmin Tong told me. “You don’t just need to build to the standard; you also need to hire a consultant to confirm that you built to the standard.”

Then there are tailor-made deals with planning boards and local opponents of the projects. Individually, many of these patterns and add-ons sound good and even feel good — who would be against cleaner air? Who doesn’t want high wages for construction workers? But cumulatively, this amounts to a failure to prioritize building affordable housing quickly and affordably.

“Market developers are building new units at $250,000 each; less than half of what those units are costing,” Galperin said.

He believes the Los Angeles political class erred in focusing on the use of HHH funds for permanent housing tied to these standards. “We want the best possible housing for everyone,” he said. “But let’s stop making perfect the enemy of good or good enough.”

Galperin also argues that more should be spent on beds in shelters and temporary housing. “It’s not ideal, but with so many people dying every day there must be a sense of urgency.”

I wish I could say that in recounting this story, I found easy solutions. But not. Authority is fractured in the Los Angeles political system. The mayor is weak and the City Council is in chaos — Nury Martinez, its former president, resigned after recordings of racist comments she made and Kevin de León, another member present on the recordings, is on a tightrope.

The closest thing to a reason for optimism is that Bass or Caruso would have something Garcetti lacked: state support. Many affordable housing has been exempt from the California Environmental Quality Act. It was given the right to higher density and lighter parking requirements. Governor Gavin Newsom has decided that this issue will define his legacy, and now he and the Legislature are passing bills in such a rush that no one I spoke to was confident they understood the full scope of what was changed.

The state is also stepping up enforcement of the laws it has passed. California used to see housing development as a problem for municipalities to solve. No more.

Despite the campaigns’ profound differences, my conversations with Bass and Caruso weren’t all that different. Both say homelessness is an emergency and should be treated as such; what regulations and standards need to be eliminated; that industry money should be easy to spend.

And both face the same political challenges: fulfilling their intentions will mean waging brutal fights — with unions, neighborhood opponents, the House, regulators. Nobody likes the results Los Angeles is getting. But many benefit from the system as it is. Many want solutions, but not the one located close to their children’s home or school. And no, not this one either; it’s horrible. Or that; Haven’t you seen the parking problems the neighborhood already has?

That’s the paradox of housing development in LA and so many other cities. The politics of the affordable housing crisis is terrible. The politics of what needs to be done to solve it is even worse.