The Struggle For Housing — LA’s Affordable Housing Crisis
From Mount Lukens to the beach communities of Malibu and Long Beach, stretching as far east as Claremont and as North as Lancaster, the county of Los Angeles spans nearly 5,000 sq. miles across beautiful Southern California. With roughly 10 million residents, Los Angeles County is the largest county in the nation. From movie stars to politicians to tech executives to millionaire teenage internet personalities, upper-class and wealthy citizens roam the trash-littered streets. Although television has allowed us to associate LA with multi-million-dollar houses, it is a consistent struggle for most Angelenos to find affordable housing; with 88% of extremely low-income households being cost-burdened (LA County). Looking at the city of Los Angeles itself, it represents a measly 10% of the total square miles in the county yet contains almost 40% of the total residents. Furthermore, of the roughly 10 million residents, a study done by UCLA’s Institute on Equality and Democracy found that 55 percent of those that call Los Angeles home are renters. Los Angeles’ affordable housing problem is not something new. Although many believe that the housing crisis can be solved by creating appealing and sustainably designed buildings, the same inhibitors that have prevented the housing crisis from being solved 40 to 50 years ago are still at work today.
The county of Los Angeles has historically maintained stricter rules regarding rent control than those imposed by the state. Nevertheless, the crisis has only worsened over time. Beginning in 1942, following the United Stated entering WWII, the first “rent control” law was put into effect to institute a price ceiling on commodities needed for war and cap residential rates in major cities with large wartime industrial capacities. By 1951, the “communistic” idea of rent control ceased, and with it, the expansion of affordable housing. Nearly ten years later, as uncertainty was rampant during the Nixon era and inflation turned into stagflation, property values skyrocketed. Although great at first for owners, a rise in property taxes incited landlords to raise rents and supported legislation to prevent rent ordinances.
A seen as a win for renters across the county, the first Rent Stabilization Ordinance (RSO) for Los Angeles went into effect on October 1, 1978, covering specific rental properties, including townhomes, apartments, duplexes, condominiums, boarding homes, long-term stay hotels, and a few other conditions (The Tenants Law Firm). Although primarily enacted to help build and expand the city’s housing in response to a quickly growing population, the RSO was also incited to prevent further redlining practices from occurring during the ’80s and beyond. Although the RSO prevented owners from increasing renter’s rent to a certain extent, policies enacted following have only added to the growing wealth disparity we see across Los Angeles today.
With a rise in inflation during the ’70s, many historians mark the beginning of the housing crisis around this time. Beginning in the 1970s, the financialization of real estate has led to various waves of evictions and displacement in Skid Row and throughout the city (Sheeley et al.). In addition, the Ellis Act of 1986 and the Costa-Hawkins Act of 1995, which are still in effect today, have been detrimental to the RSO’s goal of maintaining and increasing affordable housing. With the passing of the Ellis Act, landlords could now evict all tenants and exit the rental market without permission from local authorities: if they had “reasonable” cause. Only a few years later, the state passed the Costa-Hawkins Rental Housing Act, exempting new construction, single-family homes, and condos from rent ordinances. Done to appease real estate developers, it also made vacancy control, the act of limiting rent between vacancies, illegal throughout the state. Although these policies gave cities the power to regulate their rental markets as they saw best fit, specific language in the legislature left developers with many loopholes to exploit rent ordinances. It is estimated that with the Costa-Hawkins Act that the city of Santa Monica loses on average 500 units once previously held under rent control a year (Chiland & Chandler). Although some of these units lost are due to owners selling the rental units, developers can raise minimum rental rates of the units they own by adding a specific percentage increase in property value through renovations or by evicting tenants in units with rent ordinances. Despite promising to stimulate new developments, both acts have only worsened the housing crisis in the long run.
Los Angeles is and has been a hotspot of growing housing insecurity for renting households. As mentioned earlier, a study done by UCLA’s Institute on Equality and Democracy found 55 percent of the county’s population are renters. Although Los Angeles maintains an above-average minimum wage of $15, an individual must earn around $40 per hour with a standard workweek to afford the average 2-bedroom apartment in Los Angeles County. In addition, because the state of California has such high income taxes, it was found that more than 1:3 households spend 50 percent or more of their monthly income on rent (UCLA Luskin Institute). Hoping to address the crisis, Governor Gavin Newson has implemented mandated deadlines for cities to devise new housing plans. For Los Angeles County, this includes developing roughly 455,000 new units of housing, with roughly 185,000 units solely for lower-income residents. Many are optimistic and believe that rent stabilization and building new developments can quickly solve the housing crisis. Nevertheless, looking at the statistics of rising housing insecurity, one can infer that a solution is not as straightforward as it may seem.
One of the most common answers given when discussing solutions to the housing crisis in Los Angeles is rent control. The term rent control is commonly misused by the public. Today, true rent control, where rental rates are locked in for a unit for some set time, sparsely exists across the county. When discussing “rent control,” the general public is more likely referring to rent stabilization, which allows for increases to rental rates of a fixed amount. With the proposed goal of maintaining existing and future affordable housing, many presume rent-stabilization ordinances can most effectively increase the number of affordable housing units. To address the housing crisis in Los Angeles, beginning January 1, 2020, the state of California instituted a new statewide tenant protection act, AB1842 (Barta). Although this is a step in the right direction, as history has shown us, many of these regulations have loopholes and contingencies that have allowed developers to avoid substantial monetary losses. In addition, by cutting into landlords’ profits, policies such as these encourage landlords to get out of the rental business as investing in upkeep and maintenance cannot be recouped by raising rents (Sims). Simple supply and demand economics tells us that with the placing of price ceilings on rent, in this case, rent stabilization ordinances, the supply of rental units will only decrease while the demand for these units increases. Because of this, many economists agree that rent stabilization can make problems worse for renters in the long run.
Another problem that will indefinitely contribute to the shortage of available housing is that much of Los Angeles County falls under fault lines or contains weak foundational soil prone to sinking and movement. Looking to other major cities such as New York or San Francisco that continue to raise skylines, it is much more costly and risky from a structural standpoint to build up in Los Angeles. Although skyscrapers continue to rise in downtown Los Angeles, residential high-rises are too expensive for developers. Furthermore, residential developments are less desirable to commercial office buildings with high monthly rents and low operation and maintenance costs.
In addition to the costs involved with constructing residential buildings, Los Angeles, in no way, can develop nearly half a million new homes due to the multitude of zoning regulations. Although many developers have proposed turning to the New Urban style of city planning — such as London with 4–6 story mixed-use buildings — lining all major streets from downtown to the ocean, single-family zoning ordinances and restrictions on the density of buildings close to major highways will continue to prevent the necessary amount of housing Los Angeles needs to support its inhabitants. Established throughout the ’60s and ’70s, single-family zoned lots take up almost 75% of the city’s residential landscape and are rarely covered under rent stabilization controls. However, it is not only single-family zoning preventing the building of multi-unit residences. In addition to restrictions on the minimum amount of square footage on a plot of land to contain multiple units, The California Environmental Quality Act also restricts the building of new multi-unit residences near highways because of the effects of smog pollution on one’s health. Not only is it costly, but it is almost always a very lengthy process for developers to try to build new, or convert existing housing into, multi-unit buildings that meet all the health and safety requirements. All of these have contributed to the housing crisis in Los Angeles today.
With all the problems mentioned above, the housing crisis in Los Angeles continues to worsen. Even with building approximately 100,000 units, it is estimated that Los Angeles will still face a shortage for more than a decade in the future. Although the housing crisis will not be easily solved, solutions are out there for most of these problems. Solving these issues will take time and a collaborative and coordinated effort by private and public parties. Although I have criticized developers in the paper, solving this issue requires their help, expertise, and probably most important, their money. Going forward, Los Angeles County will need to pick the correct types of developments. Bringing together the combined efforts of city planners, developers, and city officials, addressing urban planning challenges to restructure the city is just the beginning. With the passing of SB 9 & 10 senate legislation bills on September 16, 2021, easing barriers once restricting density and reducing the timeline of reviews and hearings for new developments by the city, the state of California is moving in the right direction. Specifically, SB 9 will allow for the building of a duplex on single-family zoned residences, and SB 10 will allow for the zoning of parcels with ten units in high transit areas to be exempt from the California Environmental Quality Act (Champion et al.) Finally, as technology continues to improve, addressing the shortage will require state-of-the-art engineering and technology to increase the safety and longevity of larger projects, especially those on top of loose soil and unpredictable fault lines. These small challenges cannot be solved with short-term, extremely commercial, and often greedy solutions. To address the shortage that Los Angeles faces, we must start changing the way we think about traditional Los Angeles if we are going to solve this significant societal issue. As famous playwright, John Heywood once wrote, “Rome Wasn’t Built in a Day, But They Were Laying Bricks Every Hour.”
Works Cited
Barta, Chris. “Updates on California Rent Control Laws.” Www.nolo.com, Nolo Network, June 17, 2021, www.nolo.com/legal-encyclopedia/california-rent-control-law.html.
Champion, Doug, et al. “California Governor Newsom Signs Three Important New Bills into Law Impacting Residential Zoning and Development.” Gibson Dunn, Gibson, Dunn & Crutcher LLP, 26 Oct. 2021.
Chiland, Elijah & Chandler, Jenna. “The California Law Renters Want Repealed, Explained.” Curbed LA, Vox Media, April 29. 2020, la.curbed.com/2018/1/12/16883276/rent-control-california-costa-hawkins-explained.
Galperin, Ron. “The High Cost of Homeless Housing: Review of Proposition Hhh.” Los Angeles City Controller Ron Galperin, Los Angeles Office of the Controller, October 12, 2019, lacontroller.org/audits-and-reports/high-cost-of-homeless-housing-hhh/.
LA County. “Housing & Health in Los Angeles County: A Data Snapshot.” County of Los Angeles, Public Health , County of Los Angeles , Oct. 2017.
Sheeley, Kirsten, et al. “The Making of a Crisis: A History of Homelessness in Los Angeles.” UCLA Luskin Center for History and Policy, UCLA, Jan. 2021.
Sims, David P.. “Out of control: What can we learn from the end of Massachusetts rent control?” Journal of Urban Economics 61 (2007): 129–151.
Solomon, Robert A. 2018. “How To Increase Our Affordable Housing Stock Introduction-Our National Housing Policy.” November 6, 2018. UC Irvine School of Law Research Paper №2018–62. https://ssrn.com/abstract=3279153.
UCLA Luskin Institute on Inequality and Democracy report, UD Day: Impending Evictions and Homelessness in Los Angeles, authored by Gary Blasi, Professor Emeritus at UCLA Law.
