April 2, 2000 - From the April, 2000 issue

LAUSD Proposes To Raise School Fees On Housing Development; Gary Squier Objects

When LAUSD proposed more than doubling the fees it charges to housing providers, the cry was heard from State Treasurer Phil Angelides to Fannie Mae's Barbara Zeidman to former L.A. Housing Department head Gary Squier, who wrote this piece on the chilling effect such a move would have on the City's already dismal residential construction.

Gary Squier

By Gary Squier

Squier Properties

Long ago, miners carried canaries into coal shafts to warn of disaster. A dying canary signaled build up of toxic vapors. In the mines of public policy, advocates are just discovering new veins of support for housing the poor: over 150 housing bills are taking shape in Sacramento; there may soon be a near $1 billion housing bond before the voters; and in anticipation of the post-Riordan opportunities for change, Cardinal Mahony, mayoral candidates and Los Angeles City Council members led by Mike Feuer, Jackie Goldberg and Nick Pacheco decry the unspeakable housing conditions suffered by a quarter million Los Angeles families and propose creation of a housing trust fund.

Amid this optimism, however, I see a canary feet up on the floor of its cage. On Tuesday March 28th, the Los Angeles Unified School District Board scheduled consideration of a staff proposal to raise school fees paid by housing construction projects from the statewide standard of $1.93 to $4.55. The funds are to be used for school construction. In the face of broad opposition from non-profit and for-profit developers, the City of Los Angeles, Treasurer Phil Angelides and others, LAUSD deferred its review for 30 days.

This proposed fee is the product of 1998's voter approval of the Prop. 1A Class Size Reduction Bond Act, which triggered implementation of SB 50 enabling school districts to unilaterally increase school construction fees charged to housing. Under certain conditions fees can now be raised to a level deemed by the district to be equal to half the cost of building a school to accommodate students generated by new residential construction. A report by Schoolhouse Services of Redwood City, California-''School Facilities Needs Analysis"-recommends that LAUSD adopt a fee of $4.55 per gross square foot of residential construction.

This proposal, if implemented, will further fuel a housing crisis caused by market and government constraints on housing development. By adding to these constraints, the fees will hurt low-income families already overcrowded and forced to endure slum conditions. The Los Angeles housing problem is more serious than ever: of 740,000 renter families, 144,000 live in slum conditions, 40,000 live in garages, 190,000 are severely overcrowded, and 172,000 spend more than half of their income on rent. Over 84,000 persons are homeless-20% of them are children.

Clearly, doubling school fees is bad policy for housing and bad policy for the school children that daily endure overcrowded slums. Nevertheless, I fear that at least six of the seven School Board Members will vote against housing and for the fees. Privately, Board Members have expressed strong opposition to housing in general because it increases school attendance, and have stated concerns about rich housing developers making too much profit and say they should pay the price of their avarice.

Coming from rising political leaders who would justly describe themselves as progressives committed to social issues, those anti-housing views are the dying canary. Housing advocates should recognize the school fee issue as a harbinger and heed the warning-we can't take our philosophical brethren for granted. The housing crisis in all of its complexities is neither known nor understood outside of a small core of advocates and developers.

In preparation for a statewide housing bond vote, there is much talk about educating the public on the housing issue. I submit that we should begin by educating our leadership. When Mayor Riordan exits, don't expect the Los Angeles City Council to automatically restore funding to housing-an educated, enlightened Council wouldn't have allowed the Mayor to raid the housing budget in the first place. I don't believe that the political leadership is callous or irresponsible-they simply haven't been adequately and frequently informed to make the right decisions on budget and policy affecting the housing of low- and moderate-income families.


If there is time, a campaign of information should be directed to the LAUSD Board Members. Members should be helped to understand the seriousness of the housing condition in Los Angeles and the effect market forces such as supply and demand have on housing the poor. Advocates should resist tendencies to promote school fee exemptions only for subsidized housing; this ignores the importance of general housing construction to relieve market pressures that exacerbate overcrowding and exploitative apartment management. Most important, advocates must help leaders understand that housing is a positive thing-it's not the problem. Last year, the Los Angeles population grew by 65,000 persons, but only 1,940 net new housing units were built. Our population will grow. The job of housers and enlightened political leadership is to enhance quality of life by accommodating that growth through expanded housing construction.

Once convinced of the importance of housing, what should LAUSD Board Members do? Here is my proposal:

1) If there is to be any fee increase at all, use existing LAUSD survey data to base fees on the percentage of new housing occupants that were not previously in the Los Angeles Unified School District, thereby scaling fees down to address the school demand generated by new students coming from outside of the District;

2) Discontinue increased school fees the moment enrollment growth equals zero or less (estimated to be 2005);

3) Base fees on net rather than gross square footage of new construction (this removes the penalty paid by apartments having common corridors and community space);

4) Base school construction costs paid by fees on cost projections net of disasters such as Belmont where too much was paid for both land and construction;

5) Exempt affordable units regulated by public land use and financing agreements.



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