[Hpn] Activists Push Housing Fund Despite Budget Woes;LA Times;11/8/01
Morgan W. Brown
Thu, 08 Nov 2001 11:06:14 -0500
Thursday, November 8, 2001
Los Angeles Times <http://www.latimes.com>
Local News section
Activists Push Housing Fund Despite Budget Woes
Shelter: They urge L.A. to devote money to building affordable units, a task
complicated by the terrorist attacks and economic slump.
By JOCELYN Y. STEWART, TIMES STAFF WRITER
Richard Riordan's years as mayor of Los Angeles are remembered by some
housing advocates as a time of drought, when money once used for affordable
housing flowed to other needs.
Activists responded with a years-long campaign to bring more dollars to
their cause--an effort that seemed to be paying off at last when finalists
in the mayoral race embraced the idea of a $100-million affordable housing
When freshly elected Mayor James K. Hahn repeated his commitment to
affordable housing in his inaugural speech last summer, the momentum
continued. And a deal seemed close at hand when the City Council then voted
in favor of a beefed-up housing trust fund. But just when advocates prepared
to savor better days in the drive to build more housing for low- and
moderate-income families, Sept. 11 changed priorities everywhere.
Now activists and tenant groups across the city are waiting to see whether
Hahn can turn his campaign promise into hard cash, a particularly difficult
challenge given a projected city budget shortfall of $156 million.
"It's no doubt that it has an impact on a number of budgetary goals that I
have," Hahn said in a recent interview. "I'm still committed to having a
[housing] trust fund, and I would like to work with our city administrative
office and the City Council to figure out some creative ways we can still do
But the economic downturn and preoccupations since the terrorist attacks
have only complicated an already difficult question: Where will the money
for housing come from?
"I know of no consensus at this point," said Councilman Mark Ridley-Thomas.
"I think things are kind of up for grabs as far as the menu from which we
select" is concerned.
A consensus on the need for more homes and apartments in Los Angeles,
particularly low-cost ones, crosses the ideological spectrum. Experts agree
that it would take $100 million a year, or more, to build the nearly 4,000
housing units needed annually to meet the growing demand.
But the housing fund was established only last year and received just $10
million in the last round of budget discussions.
Though council members express support for expanding the fund, allocating
the money could mean cutting something else.
"It's not that there's $70 million or $100 million out there not being
used," said Ron Deaton, the city's chief legislative analyst.
After years of waiting and working, housing activists are not ready to give
On Wednesday, nearly 300 advocates, tenants and labor union members marched
on City Hall in a demonstration of support for the fund.
Councilman Eric Garcetti led the crowd in chants and called on the city to
do more to assist low-income residents.
"We need to be building 3,800 affordable housing units a year, and we're
barely building 800," he said.
The marchers included people like Justina Santana, a grandmother concerned
about family members who must live in substandard housing because it is all
they can afford.
"We're asking for housing that is better, where a person can live with
dignity," she said.
Helen Coleman, a retired Department of Water and Power worker from Hyde
Park, said high rents have forced many people to move to places like
Palmdale and Riverside.
"Affordable housing is a way to really revitalize our communities," she
Many of the marchers were members of the Assn. of Community Organizations
for Reform Now, which is also pushing for expanded emergency rental
assistance for low-income tenants, including those in danger of losing their
homes or unable to pay substantial move-in charges.
The demonstrators, including some who went on to speak to the City Council,
said a trust fund would help address the dire problem.
Seeking Permanent Revenue Sources
The fund was conceived as a way to designate permanent sources of revenue to
building affordable houses and apartments. Advocates also called for
dedicating a certain proportion of the city budget to housing, eliminating
the need for new debates and actions every year.
"In a lot of ways what is really important to us is securing the source,"
said Jan Breidenbach, executive director of the Southern California Assn. of
Non-Profit Housing, and of Housing LA, the trust fund campaign.
Hahn received a Housing Department report last week on possible sources of
money. The document was based on advice from activists, developers, city
administrators and the business community.
The report suggests a graduated approach to the $100-million goal: $71.1
million for fiscal year 2002, $90.6 million for 2003, $98.7 million for 2004
and $103.3 million for 2005.
Aware of "strong opposition in parts of City Hall to reliance on the general
fund for any substantial amounts of money," the advisory committee expressed
hope that the mayor and council could take advantage of expanding tax
revenues--from sources such as hotel room taxes, business licenses, document
transfers and the DWP.
But growth in those areas now seems doubtful. City Administrative Officer
William Fujioka released a report last month that warned about a projected
revenue shortfall of $71.5 million. In addition, the city is expecting $84
million in an array of unanticipated costs, including a major tax
settlement. And those projections do not include revenue losses or
additional security costs caused by the Sept. 11 attacks.
In response to Fujioka's report, the mayor ordered a hiring freeze and asked
departments to identify potential savings.
To some on the City Council, the initial $71-million goal now seems
ambitious, but Councilwoman Janice Hahn said she was not convinced that the
Housing Department report had "exhausted all possible funding sources."
"A lot of these issues will be debated and may not be the best way to fund
it," she said.
Ridley-Thomas introduced a motion this week that, if approved, might provide
another source of housing fund money.
When a city-owned property is sold, the proceeds are usually split between
the general fund and the local City Council district. Council members have
discretion over how to spend the property funds--which in the past have gone
to such projects as a police substation and the Venice Beach bike path.
Under the Ridley-Thomas motion, which has yet to be discussed, all proceeds
from the sale of city-owned property would go to the housing trust fund.
"If, in fact, we believe that housing has to be made a higher priority, then
our beliefs have to be matched by our resolve to find resources to build
first-rate housing," he said.
The Housing Department report also proposes a shift in the use of federal
Community Development Block Grant funds, a potentially hot-button issue.
According to the report, the Riordan administration "chose to use its main
source of federal housing funds--the Community Development Block Grant
(CDBG)--for activities other than housing."
In fiscal year 1995-96, the Housing Department received $41.7 million in
such funds. Beginning in 1996-97, the department received an average of $26
million. The current allocation is $23 million.
The federal funds have been used in poor communities for an array of other
popular programs, including landscaping and supporting neighborhood groups.
This year for example, Hahn's 15th District, which includes Watts, will
receive nearly $3 million, money that will go to a combination
housing-commercial development, to a gang-alternatives program and to assist
community groups such as the Harbor Boys & Girls Club.
But the district also has large housing needs.
"I think it will be a trade-off," said Councilwoman Hahn.
The idea of shifting the use of the block grant funds will "cause a
significant debate," said northwest San Fernando Valley Councilman Hal
Looking to State, Federal Governments
He said the state and federal government are in a better position to boost
affordable housing than the city.
"If the federal government and the state were to provide tax incentives for
people to build affordable housing in the city of Los Angeles, it would
happen," Bernson said.
Mayor Hahn had intended to use part of his first lobbying trip to Washington
to ask Housing and Urban Development Secretary Mel Martinez for money for
the city's nascent housing fund. But the trip was interrupted by the
"I'm looking to make sure Los Angeles gets its fair share of tax credits and
other sources out there," Hahn said. "It was not a priority in the previous
administration. It is one of ours. When Los Angeles is not in everybody's
face about this, I think we tend to get left behind."
(Riordan has defended his record on housing, saying that a substantial
number of units were built during his eight-year tenure and that he pushed
ahead parks, libraries and street improvements that also improved the
quality of life for the poor.)
The Housing Department report cites new sources of income coming from the
creation of a zoning law that would require developers to include a certain
amount of affordable housing in their projects or pay a fee.
The report does not mention specific sums that might be gained from "linkage
fees"--assessments on commercial developers to compensate for the additional
housing needs their construction creates. Hahn and many in the business
community oppose the idea, saying it would kill incentives to build. Studies
have been proposed to gain more data.
"To me 'linkage fees' ought to be seen as a last resort," Hahn said, voicing
a view widely held in the business community. "I don't think they're
helpful, especially in a fragile economy."
Housing LA advocates say they have no preference for one funding source over
another. And they say they realize that the actual amount in the trust fund
will vary year to year.
But the more important issue, dedicating continuing sources of money, is
something that can be done even in a year of economic difficulty, they say.
Said Breidenbach: "Our message is still, 'We want a trust fund.' "
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Morgan W. Brown
Montpelier Vermont USA
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