June 18, 2018 - From the June, 2018 issue

Michael Woo: Is There Such a Thing as Too Much Democracy? Challenges to Building Affordable Housing in LA

Is California's housing crisis a result of political inaction or economic forces? What role do communities and democratic processes play in the shortage of units that policymakers state are needed to match population changes? At a recent UCLA Ziman Center for Real Estate event, former Los Angeles Councilmember Michael Woo provided an overview that covered the numerous factors contributing to Southern California's current status. Woo,  currently the Dean of College of Environmental Design at California State Polytechnic University, Pomona, discussed how government and the private sector have failed to address fundamental changes in urbanization, population shifts, and local political coalitions. TPR is pleased to present an excerpt of Woo's remarks. 


Michael Woo

"If anybody comes to you with a menu of solutions for housing that are clear and simple, they’re probably wrong. But that isn’t a reason not to dive ahead." -Michael Woo, Dean, College of Environmental Design at California State Polytechnic University, Pomona

Don’t blame democracy for the high cost of housing in Los Angeles. While our political system gives a loud and powerful voice to local neighborhood groups whose members already have a place to live, democracy itself shouldn’t be blamed for the powerlessness of those who are victimized by the housing shortage. I’d argue that our current housing debacle is both a political problem and an economic problem for the most vulnerable people in the community. Unless we address both the political system that disproportionately represents people with money and the housing market that fails to deliver for people who don’t have money, we’ll miss the big picture.

In Los Angeles County, an estimated 568,000 new rental units are needed to serve the needs of low-income renters. An estimated 567,000 low-income renters cannot access government assistance and are at risk of becoming homeless. Overall in California, an estimated 3.5 million new homes are needed by 2025—seven years from now—to address pent-up demand and population growth.

These numbers are really daunting, and we are falling further and further behind. Between 2005 and 2014, California built 308 housing units for every 1,000 new residents coming into the state. This is resulting in a widening gap between supply and demand.

In the city of LA, keeping up with housing demand will require building approximately 5,300 affordable units annually—but only about 1,100 new units are being built every year. Furthermore, apartment owners have removed 20,000 rent-controlled units since 2001—many of them demolished and replaced with market-rate units at higher cost.

This produces a real predicament: We have too many people who are spending too much of their incomes on housing. In the city of LA, the average rent for a two-bedroom apartment is $2,556 a month. In order to afford that without spending more than 30 percent of your income on housing, your household income needs to be $109,000.

It gets a little better as you get further away from the center of the region. In Riverside, the average rent for a two-bedroom apartment is about $1,431. To afford that at 30 percent of your income, your household income needs to be about $61,000. That’s a big difference—but the desperate search for affordable housing also can lead to hardship in the form of the cost and the time involved in long daily commuting between home and work .

In LA, 58 percent of renters spend more than 30 percent of their income on housing. Nearly one-third of LA renters spend more than 50 percent of their income on housing. The fact that that a lot of people are spending such an astronomical percentage of their income on housing means that they are not spending on household essentials like food, education, and healthcare.

To me, this points to a potential political coalition with the business owners and industry leaders affected by such a large percentage of our population not spending money on other necessities. They are potential allies in the effort to produce more housing. We need a crash program—a crusade, a campaign, a mobilization—to build more housing.

But what will that take? If you think that a crash program for housing is politically or economically impossible, history shows that it’s a matter of commitment. For example, after World War II, Singapore built about 21,000 new housing units during a 12-year period. Those new units were equivalent to about 8.8 percent of the overall population.

In Hong Kong, there was also a tremendous increase in the number of units. At its peak, the culmination of the public sector and the private sector built 61,000 housing units during a single fiscal year (1964-1965). At that time, the overall population was about 3.6 million.

Then there’s the rapid urbanization of China. The movement of people from China’s countryside to its cities represents the largest migration in the history of the world. In 1949, 10 percent of China’s population was urban; by 2014, that increased to 50 percent. By 2017, China’s urban population had grown to 690 million people.

Why did this happen?

It was a conscious, deliberate decision. Urbanization—and the building of housing to accommodate the population—was a national strategy for economic development and poverty reduction.

Of course, from an American’s point of view, China’s rapid urbanization and housing boom also produced many side-effects that would be unacceptable in this country.

Creating so many housing units in such a short time caused a lot of chaos and pain, and a lot of people lost their homes and property. The traditional urban fabric of many Chinese cities was destroyed, and there were huge environmental impacts. But they did build a lot of housing.

The United Kingdom’s New Towns movement suggests an alternative strategy for building housing but deliberately avoiding urban congestion. As an urban planning student, I studied Ebenezer Howard’s idea of garden cities—ways of accommodating population growth without replicating the urban scale of London, but by creating new, more livable, human-scale communities outside of the UK’s existing urban centers . The UK was able to develop 32 New Towns after World War II, housing 2.8 million people.

An example of a housing mobilization closer to home may be found in David Brinkley’s book about Washington in World War II, Washington Goes to War. Brinkley tells the story of the Herculean effort in the immediate aftermath of the Pearl Harbor attack to plan ahead for the anticipated massive increase in federal employees involved in the war effort. By 1942, Washington, DC built 400,000 new units of temporary housing and 18,000 units of permanent housing.

What are lessons from these other parts of the world for a California’s mobilization for housing? First: If there is a common vision anticipating a massive increase in job growth, population growth, or migration, this could motivate government and the private sector to do something about it.

In some of the places I described, the push to build a massive amount of new housing was accelerated by centralized political authority, a financial commitment to build housing, political tools such as the power to confiscate private property, and weak opposition. It doesn’t hurt if you have a Communist system, or some kind of centralized or authoritarian system. It’s hard for a Not In My Backyard movement to thrive in an authoritarian system.

But the Washington example shows that an authoritarian system is not required for a crash program to build housing. In the case of DC, the crisis atmosphere at the beginning of the war brought together the resources and the players needed to create so many housing units in such a short period of time.

The UK New Towns movement shows that it is possible to build a lot of units at human scale, and not necessarily replicate London or destroy the urban fabric.

Even closer to us, California—especially in Southern California after World War II—yields certain lessons about doing things right. We had success in normalizing the production of affordable units—perhaps not for the very lowest incomes, but at least for middle- and working-class residents who wanted to enter the housing market.

From 1945 to 1975, 6 million homes, including 3.5 million single-family homes, were built in California. The large number of returning veterans and the need for a regional economy that would build upon the defense industries made it easier to justify a combination of policies that resulted in a dramatic expansion of housing opportunities. The GI Bill had an enormous impact on boosting homeownership in the United States. The Veterans Emergency Housing Program, in three years, from 1946-1949, produced 2.5 million homes nationally. California was one of the places where the savings and loan industry grew up, making it easier for people who had never owned a home to get their first mortgages.

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There were also factors in Southern California that didn’t apply in other parts of the country: the cost of land, the relatively low cost of building, and the development of new methods of creating housing, like tract housing.

This leads back to the subject of this address: Is democracy really the problem? To me, the real question is this: Why don’t the people who need affordable housing—those most affected by this crisis—have more power in the political system?

I’ll give you an example from my own experience. In 1986, I was a new member of the Los Angeles City Council. Knowing that I was interested in housing and architecture, the Museum of Contemporary Art asked me to support an exhibit paying tribute to the Case Study Houses (the now iconic series of single-family homes in Los Angeles, using new building materials and designed by leading mid-century modern architects) by commissioning an affordable multifamily apartment building in my City Council district.

The redevelopment agency found us an empty lot in Hollywood that belonged to the city of LA that would be suitable for 40 units of very-low-income family housing (the category of affordable housing in shortest supply in Hollywood). The museum organized a design competition that was won by the architect Adéle Naudé Santos. The city donated the land for the project, and the redevelopment agency provided housing subsidies that would make it possible for the rents to be afforded by very low-income households.

But getting buy-in from the neighbors was not so easy. Some said that they were concerned about density, even though the project was lower density than many market-rate housing units in the area. Frankly, another concern was a palpable fear of poor people moving into the neighborhood. I distinctly recall an extremely contentious neighborhood meeting that, in my eight years on the City Council, was the closest to a lynch mob I’ve ever experienced.

It took 10 years to get the La Brea Franklin project built. And contrary to the complaints of the project’s opponents, it did not become a center of drug-dealing, gangs, prostitution, or dirty laundry hanging from balconies. In fact, you wouldn’t be able to tell driving by that it was a project for very low-income families. It worked, but it was torturous to get it to happen.

Several years later, I ran for reelection and won with 70 percent. But poring over the election results on a map, I saw that this precinct was one of a few in the district that I lost—and I suspect it was because of this project. The lesson I learned is that if you want your elected officials to take chances, it helps if the districts are large and the terms are long enough for people to forgive and forget. But if political leaders think that serving the demand for affordable housing results in alienating voters, we may need to invent ways to enable affordable housing to be built through a more normalized process, without requiring a demonstration of political courage.

In Southern California, political power is very fragmented and decentralized. This system works well for many people, on many issues. But when it comes to problems that don’t respect political boundaries—like housing, economic development, or transportation— our system doesn’t work well.

The supply of available land for developing housing is not growing, but we can use existing land more efficiently. One solution is more density around transit hubs. According to the McKinsey Global Institute, if we were to maximize the development potential around high-frequency transit stations in the county of Los Angeles, we could get as many as 903,000 more housing units. That’s a lot of housing.

We also need to make more efficient use of vacant land—in other words, infill development. The McKinsey Global Institute estimates that there are between 5,600 to 8,900 vacant parcels around LA County that are zoned for multifamily housing.

There are also granny flats or accessory dwelling units (ADUs). Individually, these don’t have a lot of impact. But if there were more of them around the city, the county, and the region, they could make a significant impact.

In the most recent issue of our college magazine, I wrote an open letter to the faculty of my college challenging them to do more to address housing. For example, designers could come up with ideas about how to use more prefab or modular materials, like recycled shipping containers. Or designers could be creative about “micro-units.” In San Francisco, some developers are experimenting with dormitories for urban professionals to use space efficiently and to bring costs down.

Another idea is reusing buildings that may be becoming obsolete. In some U.S. cities, above-ground parking structures are being redesigned as living units. If we anticipate that the Uber and Lyft generation won’t need to own as many cars, and perhaps parking structures won’t be as common or as large as they are now, then we could convert parking structures or shopping centers that are no longer economically feasible into housing.

For the politically adventurous, I have a number third-rail ideas—dangerous ideas that are guaranteed to lose elected officials votes!—that could create incentives for a mobilization for housing at the state and local levels.

At the state level, the Regional Housing Needs Assessment has no teeth. In many cases, local governments disregard it because there isn’t a downside to not meeting their targets. One possibility would be to link state tax revenue allocations to local performance producing affordable housing.

In 2011, a major tool for financing affordable housing in the state went away when the redevelopment agencies were eliminated. I’m not suggesting that we bring back redevelopment. But if the state is serious about using its power to generate revenues for affordable housing, the Legislature and the governor could set aside more money from the state general fund, authorize general obligation funds, or expand the existing Low-Income Housing Tax Credit program.

The next idea is to reform CEQA. I’m not suggesting eliminating CEQA entirely, but making it harder for CEQA to be used for nuisance lawsuits against affordable housing projects.

Proposition 13 bailed out a lot of homeowners in the late 1970s who were threatened by the gradual increase in property taxes. But it has baked in a system that is inherently unfair to those entering the housing market after 1978. It has also created perverse incentives for local government to not encourage housing development and instead promote commercial development such as car dealerships and big-box retail that generates sales-tax revenue, in order to replace the revenue lost as a result of Prop 13. One way to make a difference is to rewrite Prop 13 to enable local government to generate revenue without becoming reliant on special fees, which can increase the cost of building housing.

Another option is the initiative route. This sometimes backfires, but it is a method that is available in California. Take Measure R, which generated tax revenues to support expansion of the L.A. County transit system. People thought it was never going to happen, and yet it got the votes to pass. Maybe something like that could be done for housing.

Another way to bring ideas into the political process is to go around the process, using something like a Blue Ribbon Commission. 

H.L. Mencken once said, “For every complex problem, there is an answer that is clear, simple, and wrong.” If anybody comes to you with a menu of solutions for housing that are clear and simple, they’re probably wrong. Let’s face up to the hard choices needed to replace our current political and economic malaise with housing choices that give people hope.

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© 2018 The Planning Report | David Abel, Publisher, ABL, Inc.