August 1, 2012 - From the August, 2012 issue

Mercedes Marquez: LA City’s New Deputy Mayor for Housing

Mercedes Marquez has returned to Los Angeles after serving for three years with HUD where she administered nearly $8 million in the Obama Administration's housing programs. Marquez now fills the Deputy Mayor of Housing position for Los Angeles. This month Marquez spoke with TPR on the lessons she learned in Washington, the immediate responsibilities given to her by Mayor Villaraigosa, and the housing and development priorities Los Angeles must execute on in the coming decades.


Mercedes Marquez

“I would say, absolutely, the issues of economic development are tied to our challenges on housing affordability. To the degree that we are able to facilitate bringing—whether through our actions or through the obstacles that we get rid of that generate economic development and job creation—more income into the hands of the families and residents of Los Angeles, the less money is required to subsidize family housing.” -Mercedes Marquez

Mercedes, at the invitation of Mayor Villaraigosa you have returned to Los Angeles after serving in President Obama’s Housing and Urban Development Department to become the City’s Deputy Mayor for Housing. What are your priorities?

Mercedes Marquez: The Mayor has asked me to be the person who focuses on the transfer of the redevelopment housing assets to the city, who focuses on possible new sources of funding, and who creates new strategies for affordable housing. I’ll be looking at the city’s consolidated plan (the new plan is due to HUD in February of 2013) to consider on how we integrated community development. I would say transit-oriented development and an integration of community development are the new possibilities that have emerged in Los Angeles with the passage of the Federal Transportation Bill and Measure R and its hopeful extension.

How many years did the Mayor give you to accomplish this multifaceted mission?

Well, you know our mayor, he’s asked me to take care of those things plus make sure that I never forget about the homeless. I have a year.

Obviously, the end-of-Redevelopment-as-we-know-it creates considerable confusion and ambiguity with regards to the administration of public housing policy and community and economic development programs. Share with our readers how CRA’s housing responsibilities will be managed by the City going forward?

The city chose to become the successor housing agency, and under the agreement the assets and authorities will transfer to the housing department. In this round of work for the city, I serve as the Deputy Mayor for Housing and also as the Interim General Manager of the housing department. We’re already working collaboratively with the former CRA leadership to effectuate a transfer. The state, as you know, has passed some clean up legislation, provided directions, and both groups are working together to ensure we have a full list of housing assets. There are lots of legal questions created by ambiguous language, so we’re working to understand what it is that transfers over. But it will transfer over, and the mayor has asked me to ensure that we use those assets and authorities in the most effective and integrated way to help continue his commitment to affordable housing.

One of the advantages of the CRA, at least theoretically, was that the agency integrated under one roof economic development, planning, and housing. As housing moves into City Hall, is the integration of policy and implementation less likely?

When the universe of redevelopment was all within the redevelopment agency, you could argue the potential was there for efficient development. Whether that was true or not is for others to say, but the potential for efficiency obviously existed.    

I would say to you that all of the city’s assets, as related to planning, economic development, and housing, were never at the redevelopment agency. In some ways an opportunity has been afforded to us by moving the authorities to city hall. As we move forward as a city, particularly around transportation policy, my great hope, and the hope of the mayor, is that we’ll transform ourselves beyond thinking of transportation policy as just the transit system itself, but understanding that it’s part of a larger scheme of urban policy that leads to the development and maintenance of vibrant communities. That’s something that comes when the city as a whole is speaking to itself. That’s not something that we had when redevelopment was just redevelopment; they were never the whole.

Before leaving City Hall for HUD, you participated in many Los Angeles discussions on how to better leverage housing and transportation programs and responsibilities. Has progress been made? Will the absence of a Redevelopment Agency spur more collaboration between city departments and agencies?

I’m enormously excited about that. I’ve been back one month, and I’ve already met with the Deputy Mayor for Transportation; I’ve already met with the President of the Planning Commission; I’ve already met with the Director of Planning and with the former Director of Redevelopment. There is a really healthy level of discussion about how we would integrate to bring opportunity—as they relate to housing, economic development, and community services—to neighborhoods that are going to receive new transit opportunities. It’s very exciting to see how open people are to what this city could be if we dream, plan, and work together.

What should our TPR readers be looking for over the next year to benchmark your success given the optimistic scenario you are sharing with us?

I think they can look for some formalizing of vision as it relates to transit oriented development, where the mayor includes all of the stakeholders that a city needs to make up a vibrant community. Beyond what we think traditionally, beyond the planning department and its obvious importance to land use around stations, but also looking a bit the way we studied what we might do with Proposition 1C funds, I think you can look forward to a very clear expression from the mayor on how we’re going to work together and bring forth integrated policies. I can’t tell you how excited I am about that.

Let’s turn to your responsibilities for affordable housing. Clearly the nation’s and the city’s economy and housing market are less than healthy, and the Los Angeles Housing Authority is recovering from scandal. Given these circumstances, how are you addressing housing affordability and supply?

The cuts at the federal level, the exhaustion of the state funding on Prop 1C, and the dismantling of community redevelopment have all brought very serious consequences to the city as we move forward. Now what’s important is for us to not remain frozen by that and to look again at efficiencies. We’re doing that now, and we’re understanding what we might change in terms of our policies as they relate to taking a new look at the housing trust fund to effectively fund projects.    

We’re also taking another look at the placement of the New Generation Fund, which was an equity fund we put together with private banks and the enterprise community partners to provide us equity for acquisition for redevelopment. We’re taking another look at that right now already. We’re talking to the state about some new possibilities on finance for the City of Los Angeles.    

I would also say that new conversations with the planning department on the integration of land use and housing dollars around transit stops will actually save money if we do it together, and we’re already having that conversation.   

I am looking forward to a very open and collegial conversation with my colleague Doug Guthrie at the Housing Authority on how to take advantage of their opportunities, capital, and authorities that I think often go unused in the city. That partnership has not been effective over time, and we know that it can be. I think continued work with the county, particularly in efficiently working on chronic homelessness, is also going to happen.

Mercedes, does Los Angeles have a housing supply problem? A production problem? Or an affordability problem? What’s the most pressing challenge that you face in your new leadership position within City Hall?

The need in the city is great. About 61 percent of renters are rent burdened, which means they pay more than 30 percent of their income on rent. That figure runs along all economic sectors; it’s not just the low income folks. We have to understand that we have a rent burden, and we still have a great need for subsidies. There are different ways to help with that, whether it’s through land use planning or direct subsidy. We always have to start with the need. I do think that if we understand that need and map it against opportunity along transit and in neighborhoods, we can do a better job.

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As Assistant US Secretary for Community Planning and Development at HUD, you certainly had a marvelous platform for observing best practice throughout the country. Chicago, for example, titles its housing department ‘Housing and Economic Development’, placing both fields under one office. With housing affordability directly related to job creation, how will you be linking your housing initiatives with fostering economic development?

I would say that in Los Angeles, housing development, whether it’s affordable or market rate, has always been economic development. A real estate-led recession hit us particularly hard because that is true. I would say, absolutely, the issues of economic development are tied to our challenges on housing affordability. To the degree that we are able to facilitate bringing—whether through our actions or through the obstacles that we get rid of that generate economic development and job creation—more income into the hands of the families and residents of Los Angeles, the less money is required to subsidize family housing. So absolutely economic development and housing are connected. Again, how do you link them? There are many ways, but the one that has perhaps the longest-term opportunity before us relates to planning our transit system.

As you were leaving LA to take join the Obama Administration, there was a policy scuffle between industrial landowners and residential developers over the zoning of scarce industrial land in downtown LA and along the river. Do you have thoughts, in your new position, to better balance planning and economic development with housing?

Yes, the policy scuffle that you’re referring to, is remembered. We still have to have the opportunity for folks to manufacture goods, but we also have to understand that we’re moving into a technological sector and have to do what we can to help incubate those changes. It is a combination of blue collar jobs and high tech jobs, and there needs to be a balance.

I would say that so much opportunity has been crystallized with the passage of the federal transportation bill, and hopefully if Los Angeles agrees to extend Measure R, it will give us the opportunity to construct our future. The transit system is the anchor of what will be our future for neighborhoods, and along those lines will be opportunities for jobs, housing, and other services. The balance of that has to be looked at with the prism of what the transit system will become.

Lets turn back to the integrated and consolidated plan being developed for HUD, which you have some experience with. Can you talk about where we are in that planning process?

The consolidated plan expresses to the Department of Housing and Urban Development of how LA plans to invest our community development block grant dollars, our home dollars, which is our affordable housing money directly from HUD. This is the money that we use for sheltering the homeless and those living with HIV/AIDS. But what is indirect is all of the leverage that is actually created through those dollars.

The new consolidated planning template that HUD put out in May is called the eCON Planning Suite, and they’ve never had one before. It has new data that goes to the census tract that, for the first time, includes data on economic development and a mapping tool that is available to the country. We’re looking forward to a more robust public process because the data is accessible, and you don’t need a master’s degree to understand it.

Our plan is due in February of 2013, and we are going about it in a more holistic way. Instead of just including those agencies that are responsible for those dollars—CDBG, Home, and ESG—we’re actually expanding the conversation to those who are also the leveragers. We’re including the mayor’s small business team; we’re including the transportation team; we can’t do this without the planning department; we’re going to talk to public works so that we’re actually taking a look overall at development. It’s a very exciting process.

We are one of the first major cities in the country that is the subject of the plan. I can tell you with some sense of satisfaction that I was involved in the design and implementation of the plan in Washington DC, so I guess it serves me right to be involved in one of the first cities to respond to it.

LA has a small lot subdivision ordinance, and some have suggested that it holds great promise in the long term. Does it figure into your planning?

It does have great promise in the long term, but primarily it was meant to drive affordability down on home ownership. There’s no question that as we’re looking at neighborhood development we’re going to look at the small lot ordinance.

What’s your focus on homelessness and your responsibilities in that arena, which also overlap with the county?

I can tell you that in the three years that I’ve been gone, I’ve often heard about Los Angeles’ efforts on homelessness. In Washington I was responsible for most of the homeless dollars spread across the country. Los Angeles was selected by the interagency task force on homelessness to be one of ten cities that they would focus on. I looked at it from a national level.

There are a couple of things that are very promising. One, the new effort led by the United Way is very encouraging as it has created a space for the public, private, and philanthropic sectors to come together and share perspectives. There has been more work done with the county to focus on these issues, even as it relates to neighborhood stabilization. We have a pilot program with the county to help us on chronic homelessness. There is a lot of fine work happening between the city’s housing authority HACLA and the county on the placement of section 8 vouchers for the chronically homeless. I think we’ve come a long way, and I look forward to doing everything I can to facilitate this success.

Let’s close with what you bring back from your three years with Secretary Donovan and the federal community planning and development efforts. What are the lessons learned? What are the benefits of that experience for your work in LA?

I am so grateful to the President and to Secretary Donovan for having been given that opportunity. I crisscrossed the country more times than I can say, and I had the chance to meet folks in neighborhoods facing all of the issues that Los Angeles faces. At HUD I was responsible for CDBG, the Home program, for the ESG program, for HACLA, for empowerment zones, for neighborhood stabilization, for a lot of the CDBG dollars, as well as homelessness prevention and about $30 billion in disaster relief funds. If you looked at it through the prism of Los Angeles, it meant that I was responsible for CDD, LAHD, LAHSA, parts of the CRA, parts of planning, and economic development. So what I gained was a very broad understanding of housing and economic development as a whole.

I’m happy to come home with this better understanding of the integration of housing and urban policy, as they relate to housing, community development, transit, and job development. When I look at things now, even as I’m sitting here in my office at the housing department, I am thinking much more broadly and understand at a much more specific level how all these things work together. I’m hoping to be one of the facilitators in the city to make that work better.

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