COVER STORY LA Faces Uphill Battle as it Tackles Affordability Crisis Developers, nonprofits and government entities are eager to provide more affordable housing, but rising costs, minimal available inventory and red tape create obstacles. Nellie Day “L os Angeles” and “affordable” aren’t words that typically go together. In fact, they’re practically opposite. That’s a problem, particularly for the 500,000 very low-income households whose needs are not being met by Los Angeles County’s supply. That number jumps to 700,000 if you count the households that only qualify as low income, according to California Housing Partnership Corp. For reference, low-income households earn between 50 and 80 percent of the area median income(AMI). Very low-income households earn between 30 to 50 percent of AMI. “It is undeniable that there is a lack of hous-ing across the affordability spectrum, from ELI (extremely low-income) to moderate incomes,” says Rochelle Mills, president and CEO of Ir-vine, Calif.-based Innovative Housing. The or-ganization assists the public and private sectors to address the low-to moderate-income hous-ing shortage through development. “The onerous require-ments, red tape and com-peting regulations of the layered financing sourc -es needed to fill gaps — along with competing timelines and fluid tie-breaker criteria — only exacerbate the problem,” explains Mills. Something else exacer-ROCHELLE MILLS bating the problem has President and CEO, been COVID-19. Afford-Innovative Housing able housing advocates have found themselves competing for not only funding sources, but also public sentiment and labor at a time when most resources are worn thin. “As an industry, we need to do a better job of telling the economic and social impact of hous-ing, demonstrating the win-win-win of housing our neighbors, and managing expectations so that everyone understands that it is worth the investment in time and resources,” continues Mills. “In LA, it is easier to make a case to house our cars than it is to house our neighbors.” Fortunately, there are organizations and pub-lic entities that are trying to make a difference. Designed to accommodate residents of varying income levels and backgrounds, Innovative Housing’s 87th & Western is a community revitalization development that will include 100 residential units, as well as commercial components. It will be situated within a half-mile of the Vermont and Crenshaw transit routes, and will be within walking distance to bus services, schools, churches and a Kaiser Permanente medical office facility. The City of Los Angeles is simplifying the zon-ing code, digitizing the permitting process and providing case management services to expe-dite high-priority projects, notes a November 2019 McKinsey Global Institute study on afford-able housing in Los Angeles. The county has also significantly increased funding through programs like the Affordable Housing Trust Fund, Measure H and No Place Like Home. An update to the Downtown Los Angeles Community Plan is further tackling the prob-lem as the city’s affordability gap is the high-est in neighborhoods close to downtown. This latest update doubles the area where housing, including permanent supportive and affordable housing, is permitted. This is an expansion from 33 percent of the total downtown area that can permit housing to nearly 60 percent. “Some of the neighborhoods closest to down-town (South Los Angeles, Koreatown, West-lake) have had the lowest incomes in the city,” says Nora Frost, public information director at Los Angeles City Planning. “The gap between incomes and rents is there-fore highest, which is exacerbated because there has been increased demand to live in more centralized neighborhoods. This new update accommodates anticipated growth through 2040 in an inclusive, equitable, sustainable and healthy manner, while supporting and sustain-ing downtown’s ongoing revitalization,” ex-plains Frost. A Modular Solution Depending on the developer, financing and zoning, there are a variety of ways to tackle the affordability crisis in Los Angeles. These include micro units, adaptive reuse (as well as single-family home conversions) and co-living developments. Modular and prefabricated con-struction can also reduce the cost of affordable projects. “There is a very big push to consider alterna-tive construction methods and materials,” says Welton Jordan, chief real estate development officer at EAH Housing. “We are looking at us -ing modular and cross-laminated timber (CLT), as well as light-gauge steel as some of the tra-ditional building material prices continue to climb.” www.REBusinessOnline.com 14 | Western Affordable Housing Business | May/June 2021