Gary Squier: A Housing Department Report Card

The Housing Preservation and Production Department (HPPD) is the product of a decade of housing prob­lems that were mounting faster than City institutions could respond. Renters protested as rents doubled, activists attacked the Community Re­development Agency (CRA) for sub­sidizing middle-class housing while thousands of homeless lived on the streets, and the Housing Authority was dubbed “the City’s largest slumlord.”

The City responded with shelter programs and rent stabilization: new Housing Authority management tripled renovation funding; CRA shifted funding priorities and a high powered Blue Ribbon Committee was convened.

But during these cycles of crisis and response, housing problems grew: overcrowding, rent burden, and dis­appearing homeownership opportunities were tearing at Los Angeles neighborhoods and families. From the chaos of a deteriorating housing system grew a recognition that the health of the housing market affects quality of life as surely as do transportation, air and water quality and eco­nomic development. 

Creating a New Department 

During the 1980’s, housing achieved status as a major urban sys­tem that requires the same public sector attention accorded other criti­cal public concerns. As such, the City Council and Mayor agreed that man­agement of this system required the focus of a single City entity and cre­ated the Housing Preservation and Production Department in August, 1990. 

An Affordable Housing Com­mission was also created to oversee the Housing Department. HPPD was formed by spinning off 240 employ­ees from the City’s social services agency, the Community Development Department, and by adding a half dozen new positions in addition to a General Manager. Staff were drawn primarily from CDD’s Housing and Rent Stabilization Divisions. 

The Housing Department was charged with five key responsibili­ties:

• Preserve housing through single family and multi-family rehabilita­tion loans.

• Finance new ownership and rental housing — to include capital subsidy and tax-exempt bond financ­ing.

• Administer the Rent Stabiliza­tion Ordinance.

• Monitor and analyze the hous­ing market and develop policy to ad­dress changing needs and conditions.

• Coordinate public and private sector housing-related activities to unify public policy and action in support of affordable housing. 

These responsibilities manifest three shifts in City housing priorities that did not exist before HPPD was established. First, HPPD now gives the City the capacity to monitor and analyze the state of housing and to quickly develop appropriate and effective responses. Second, HPPD is staffed to aggressively expand the finance and production of new af­fordable housing. And third, HPPD is mandated to review and comment on the hundreds of policy decisions that impact, often negatively, on pri­vate sector housing production. The department is by intent an inside ad­vocate for housing production. 

Performance Record 

Has the Housing Department made a difference? Production sta­tistics suggest we have. During the fiscal year ending this June, HPPD will have financed 785 new construction units for $15 million; invested $20 million in rch.1bilitation of 1,982 units; and leveraged $85 million in equity and non-City financing. Next year, program funding will exceed $70 million. In addition, the Depart­ment produced the City’s first Comprehensive Housing Affordability Strategy (CHAS) and oversaw the efficient administration of the Rent Stabilization Ordinance. The CHAS proved to be an important catalyst for public debate over growth, economic opportunity, and local control.

Still, HPPD fell short of providing Los Angeles the full service necessary to manage the City’s housing system effectively and to attack its housing problems.

Areas for improvement next year include: a more aggressive legislative role; increased interagency coordination (with Planning, LACTC, Building and Safety, Chief Legislative Analyst); an expanded slumlord abatement program; housing plan implementation; street-by-street neighborhood revitalization; expanded private sector housing production, and systematic reporting on the state of housing in Los Angeles.

HPPD’s Constraints

The Department has encountered many impediments since its inception, some of them serious. Predictably, heading in a new direction with a pre-existing staff presents issues of morale and motivation. But HPPD staff deserves credit for being productive during the transition.

A far greater constraint is found in civil service procedures that make it impossible to reposition staff quickly to tackle new functions. I am unable, for example, to promote a highly motivated, hardworking secretary to a position with program responsibility. Hiring for new functions — housing finance for instance — takes over one year. A key constraint to effective management is the virtual inability either to sanction or provide incentives to City employees based on performance. 

An unexpected limitation on the department is that Los Angeles department heads lack control over their budgets. General Managers do not have authority to shift payroll expenses from one emphasis to another. As a result, the HPPD Planning and Policy function, a principal motivation for creating the department, is understaffed and frequently overwhelmed, while lower priorities are amply supported.

Questions Ahead

The coming year presents both old and new challenges. We will continue the dialogue over growth, local control and the need to expand housing supply.

Growth policies, perhaps one of the most pivotal issues confronting policymakers, can no longer be discussed without considering the widening divide between “haves” and “have-nots” and the economic segregation of Los Angeles. Recent events have made painfully clear the link between growth and economic opportunity and the entire city’s stability and single-family real estate values. I am optimistic that the time has arrived when it is in the interest of homeowners to support policies that both spur the economy and benefit the inner-city.

I am less optimistic about the speedy recovery of the housing market. Three years ago, residential construction supported 40,000 jobs in Los Angeles. Today, employment is one-tenth of that and permits are down from 15,000 units to 1,000 units per year. HPPD will work with lenders (and their regulators), developers and builders to help revitalize the housing industry.

The one industry that is doing well in Los Angeles, mass transit, presents great potential for neighborhood planning and housing supply expansion. HPPD looks forward to collaborating with LACTC and the Planning Department to ensure that the $150 billion rail project addresses housing, economic and neighborhood needs, as well as mass transit.

The recent upheaval will raise another question this coming year: Will the civil disturbances cause the government to restructure to become more responsive to rapid urban change? Is it possible to govern our increasingly complex city under a Charter written fifty years ago?

Conclusion

The Housing Department has demonstrated that it is an able advocate and implementer. It has, and will continue to ask difficult questions and push for a working consensus in responding to the housing problem. HPPD has already made a difference, and as constraints are overcome, the department will realize its full potential to guide Los Angeles out of its housing crisis and help restore livability to its neighborhoods.