LosAngelesCountyAnnualAffordableHousingOutcomes

Report

April2017

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EXECUTIVESUMMARYIntroductionLosAngelesCounty’sshortageofaffordableandavailablehomestolower-incomefamiliescontinuestogrow.Withtheeliminationofredevelopmentagenciesin2012,inadditiontocutstofederalandStatefundingforaffordablehousing,LosAngelesCountyleadershaveactedtostemthetideofthehousingaffordabilitycrisis.ThisreportisdesignedtohelpguidetheCounty'sallocationofresourcesacrossbothnewandpreviouslyexistingaffordablehousingprograms.ThereportcompilesforthefirsttimealloftheinformationneededtosystematicallyanalyzeandaddressthedetailsoftheaffordablehousingneedwithgreaterbreadthanddepththantheCountyhaspreviouslyachieved.BackgroundTheLosAngelesCountyBoardofSupervisors(“Board”)adoptedaMotiononOctober27,2015,tocreateanAffordableHousingProgramsbudgetunitandestablishamulti-yearplantoprovidenewfundingforaffordablehousingnotalreadyallocatedtoexistingCountyhomelessnessorhousingprograms.TheMotionalsoestablishedanAffordableHousingCoordinatingCommittee(“Committee”)tooverseethecreationofanannualAffordableHousingOutcomesReport(“Report”).ThepurposeofthisReportistoassesstheneedforaffordablehomes,provideabaselineofexistingaffordablehousinginvestments,andrecommendhowtoguidefuturedeploymentofaffordablehousingresources.TheCaliforniaHousingPartnership(CHPC)andtheCorporationforSupportiveHousing(CSH)completedaTemplatefortheReportthattheBoardadoptedMarch30,2016.Sincethattime,CHPCandCSHhaveengagedCountydepartmentsandstakeholdergroupsonaroutinebasistogatherinformation,inventoryandassesscurrentCountyprograms,andascertainpotentialgapsinservice.Further,theCommittee,inconcertwithcommunitystakeholders,hasfacilitatedrobustpolicydiscussionsregardingrecommendationsforfutureallocationofCountyresourcesgiventhegapanalysisandinventorycontainedinthisreport.CompletingeachmajorsectionoftheReportinvolvedbothdataanalysisandrobuststakeholderengagementto“groundtruth”keyfindingsandensuresensitivitytolocalcontext.TheCommitteereviewedeachsectionoftheReportandsolicitedfeedbackthroughaseriesofpublicmeetingsfromJanuarythroughApril2017.ThesemeetingswereattendedbyCountyagencyheadsandmanagers,BoardofSupervisorsstaff,andcommunityadvocates.Themeetingsprovidedaproductiveforumforparticipantstoscrutinizefindingsandrecommendations.TheinputgatheredinthesemeetingswasinvaluableinfinalizingthefirstversionoftheannualReport,andinensuringthattheReportisasusefulaspossibletothe

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Countyinfurtheringitseffortstoconfrontthelocalhousingaffordabilityandhomelessnesscrisis.ReportStructureTheReportisdividedintofivesectionsthatcoverthefollowingcoretopics:

§ Section1.LosAngelesCountyAffordableHousingNeed§ Section2.InventoryofAffordableRentalHousingPropertiesandRentandOperating

SubsidyPrograms§ Section3.CountyAdministeredAffordableRentalHousingResources§ Section4.NeighborhoodAccessibilityandVulnerability§ Section5.Recommendations

Asoutlinedabove,theReportfirstestablishesabaselineofexistingaffordablehousingneedandaninventoryofaffordablehousinginvestmentsintheCountybygeographicarea.1Thisbaselinecanbeusedasabenchmarkuponwhichtotrackprogressmovingforward.ThereportthenusesthesefindingsasabasisformakingrecommendationsforhowtheCountyshouldguidefutureaffordablehousinginvestments.KeyFindings(Sections1-4)TheCountyofLosAngelesandpartnerlocaljurisdictionshaveexpendedsignificanteffortandresourcesworkingwithdevelopersandserviceproviderstoaddresstheaffordabilityandhomelessnesscrisisovertheyears.Byinvestinglocallycontrolledfundingintoaffordablehousingproduction,preservation,andrentalandoperatingsubsidies,aswellaspromotingpoliciessuchasinclusionaryzoninganddensitybonuses,theCountyhashelpedthesehousingprovidersleverageStateandfederalresourcessufficienttocreate109,000affordablehomesandtoassistmorethan107,000householdsmaintainaffordablehousingthroughvariousformsofrentalassistance.Unfortunately,althoughtheexistinginventoryofaffordablehomesandrentalassistanceprogramsintheCountyarehelpingstemthetideofhomelessnessandaddresstheaffordabilitycrisis,theyarenotcommensuratewiththeneedforaffordablehomes,whichextendswellbeyondthe47,000officiallyhomeless.TheReportfindsthattheCountyneedstoaddmorethan550,000affordablehomestomeetcurrentdemandamongrenterhouseholdsatorbelow50percentofAreaMedianIncome(AMI).

ThereportfurtherfindsthatnearlyalllowerincomerenterhouseholdsintheCountyareseverelycost-burdened,meaningtheyspendmorethanhalfoftheirincomeonrentandarein

1TheCountydirectedtheAuthorstouseServicePlanningAreas(SPAs)asthegeographiclensforassessingneedsandresources.

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dangerofbecominghomeless.Thisincludes92percentofthosewhoareDeeplyLowIncome(DLI),73percentofthosewhoareExtremelyLowIncome(ELI)and42%ofthosewhoareVeryLowIncome(VLI).2Meanwhile,virtuallynohigher-incomehouseholdsareseverelycost-burdenedandthevastmajority—including92percentofrenterhouseholdswithincomesabove120percentofAMI—spendlessthan30percentoftheirincomeonrent.AffordablehousinginLosAngelesCountyiscreatedbycombininglocal,state,andfederalfundingtogetherinthesameproperties—bynecessitytoovercomethehighcostsinvolved—aswellasthroughlocalpolicies,andrentalandoperatingsubsidyprograms.TheReportprovidesaninventoryofcurrentaffordablehousingresourcesandidentifiesrentalpropertiesatboththecountyandSPAlevelthatareat‘high’or‘veryhigh’riskofbeingconvertedtomarketrateunitswithinthenextfiveyears,accordingtotheCaliforniaHousingPartnership’slatestassessment.TheReportnotesthataperfectstormofrisingrentsandexpiringrestrictionshaveputtheCountyatriskoflosingnearly14,000existingaffordablehomesifstrongactionisnottaken,potentiallyworseningthecurrentcrisis.TheReportshowsthattheCounty'sexistinginventoryofaffordablehousingisalmostentirelylocatedwithinthetransit-accessibleneighborhoods—includingintransit-richareaswheregentrificationwasmostprominentfrom2000to2013.TheReportdescribesaninnovativetoolforevaluatingandsitingnewandpreservingexistinghousing–theLow-WageJobs-HousingFit.TheLow-WageJob-HousingFitistheratiooflow-wagejobstoaffordablehousinginanarea.TheCounty’sexistingaffordablehousingstockisconcentratedinareaswithrelativelygoodjobs-housingfit.TheCounty’sinvestmentstodate,whileachievingtheimportantgoalofhelpingtoaddressregionalsupplyissues,maynothavehelpedexpandhousingoptionsforlow-incomehouseholdsintoareaswithpoorfitthatarerelativelyinaccessibletothem.Newresources—someofthemlocallygenerated,suchastheCounty’sMeasureHfundsandtheCityofLosAngeles’sMeasureHHHfunds—presentacriticalopportunitytocreatetensofthousandsofnewaffordablehomes.However,theReport’sfindingsandrecommendationsunderscoretheurgencyforfurtheraffordablehousinginvestment,aswellastheimperativetotargethousingresourcestotheCounty’smostvulnerablepopulationsingreatestneedgiventhelimitedaffordablehousingresourcesavailable.Recommendations(Section5)TherecommendationsincludedintheReportaregroundedinthedetailedneedsanalysisandassessmentoftheexistinginventoryreferencedabove,andarealignedwiththeBoarddirectivetosupporttheproductionandpreservationofaffordablehomes,includingworkforcehousingandpermanentsupportivehousing,forverylowandextremelylow-incomeorhomelesshouseholds.TherecommendationsarealsointendedtocomplementcurrentCountyaffordable

2DLIisDeeplyLowIncomeor0-15%ofAreaMedianIncome;ELIisExtremelyLowIncomeor16-30%ofAMI;VLIisVeryLowIncomeor31-50%ofAMI.

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housinginitiatives,andmaximizetheefficiencyoftheCounty’snewinvestmentstomeettheneedforadditionalprioritypopulationswhoareunder-servedrelativetotheirneedforaffordablehomes.MultiplerecommendationsrelatetotheneedtodevelopandpreserveaffordablehousingthatservesthelowestincomehouseholdsintheCounty,whohavethehighestneedforaffordablehomes.TheyalsourgetheCountytobalanceitsexistingprioritytoservehomelessandotherspecialneedspopulationswithanewcommitmenttoservethelowestincomehouseholdswhodonothavespecialneedsandarelikelyunderservedrelativetotheirneedforaffordablehomes.Additionalrecommendationsrelatetotheneedtopreserveaffordablehousingpropertiesthatareathighriskofconvertingtomarketrateinthenextfiveyears—astrategythatcancosthalftotwo-thirdsasmuchasnewconstruction.Stillotherrecommendationsdiscusstheneedtogeographicallytargetaffordablehousinginvestmentsandtomaximizeleverageandalignmentwithlocal,State,andfederallow-incomehousingprogramstoincreaseaffordablehousingresources.Therecommendationsaresummarizedasfollows:

1. IncomeandPopulationTargetinga. FocusNewFundingontheLowestIncomeHouseholdsb. FocusNewFundingonNon-SpecialNeedsDLI,ELI,andVLIHouseholds

2. ShallowProject-BasedOperatingSubsidyforNon-SpecialNeedsDLIandELIHouseholds3. PreservationofExistingAffordableHousingResources

a. ProvideGapFundingtoPreserveAt-RiskPropertiesb. ActivelyTrackPreservationRisksc. ProvidePreservationTechnicalAssistance

4. LeverageLocal,StateandFederalResourcesa. Createa1-StopApplicationforPermanentSupportiveHousingb. MaximizeUseofFederalLow-IncomeHousingTaxCreditsc. IncreaseCompetitivenessfortheAffordableHousingandSustainable

CommunitiesProgramd. IncreaseCompetitivenessfortheVeteransHousingandHomelessPrevention

Program5. GeographicTargeting

a. ExpandChoicesandAccesstoOpportunitiesforFamilieswithChildrenb. UseBestPracticesinSitingPermanentSupportiveHousingc. PrioritizeSitesAccessibletoTransitandKeyAmenities

6. CDCNoticeofFundingAvailability(NOFA)Changesa. AvoidImposingAdditionalRequirementsb. MakeCreationandPreservationofAffordableHousingforNon-SpecialNeeds

DLI,ELI,VLI,andLIHouseholdsEligibleforNOFAFunding

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Takentogether,therecommendationinthisReportrepresentasubtlebutimportantshiftintheCounty’sfocusandresourceinvestments.ThetwolargestproposednewinitiativesarethecreationoftheShallowProjectBasedOperatingSubsidyandthePreservationofExistingAffordableHousing.Thetimelyandsuccessfulimplementationofthesetwoinitiativesinparticularwillrequirethecommitmentandcooperationofmultipledepartments.TheCountyhasindicatedthatitwillworkwithstakeholderstodiscuss,evaluate,andprioritizetherecommendationsincludedinthisReport.Inaddition,theBoardandtheCommitteewillusethisfirstannualReportasabaselineagainstwhichtomeasureprogressandreviseitsanalysisthroughfutureversionsoftheReportinsubsequentyears.

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Dashboard:CountywideSnapshot

CountyProfile+AffordableHousingNeedTotalPopulationinOccupiedHousingUnits(2015ACS1-YrEstimate,Total

PopulationinOccupiedHousingUnitsbyTenure) 9,995,860

TotalPopulationinOwner-OccupiedHousing(2015ACS1-YrEstimate,TotalPopulationinOccupiedHousingUnitsbyTenure) 4,779,808

TotalPopulationinRenter-OccupiedHousing(2015ACS1-YrEstimate,TotalPopulationinOccupiedHousingUnitsbyTenure) 5,216,052

AffordableHomeDeficitforDeeplyLow-Income(DLI)Households -148,960AffordableHomeDeficitforExtremelyLow-Income(ELI)Households -225,887

AffordableHomeDeficitforVeryLow-Income(VLI)Households -176,960CumulativeDeficitofAffordableRentalHomesforDLI,ELI,andVLI

Households -551,807

%ofDLIHouseholdsthatareSeverelyRent-Burdened 92%%ofELIHouseholdsthatareSeverelyRent-Burdened 73%%ofVLIHouseholdsthatareSeverelyRent-Burdened 41%

TotalHomelessPopulation(2016) 46,874

AffordableHousingandRentalAssistanceintheCountyAffordableHousingProperties(2016) 2,275

AffordableHomes(2016) 107,638At-RiskAffordableHousingProperties(2016) 232

At-RiskAffordableHomes(2016) 13,883PublicHousingUnits(2016) 10,129

HouseholdsreceivingRentalAssistance(2016) 107,092

CountyCapitalFundingforAffordableHousingDevelopmentandPreservationCountyCommunityDevelopmentCommission(CDC)CapitalBudgetfor

AffordableHousinginFY2016-2017 $27,186,500

CountyDepartmentofMentalHealth(DMH)CapitalInvestmentscommittedinCY2016 $14,162,397

RegionalHousingNeedsAllocation(RHNA)ProductionVersusGoal(County)

2014-2021RHNAGoalforELI/VLIHouseholds 7,655ProductiontoDateofAffordableHomesforELI/VLIHouseholds 226

2016ProductionforELI/VLIHouseholds 35

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StateCapitalFundingAvailabletoCountyDevelopmentsinCY2016

AwardedStatewide

$AwardedinLACounty3

%AwardedinLACounty

9%FederalTaxCreditsawarded4 $98,884,477 $29,458,711 29.79%4%FederalTaxCredits $229,615,414 $40,622,045 17.69%

StateTaxCredits $94,072,754 $27,226,965 29.94%AffordableHousingandSustainable

Communities(AHSC) $295,252,840 $64,572,3885 21.87%

VeteransHousingandHomelessPrevention(VHHP) $116,102,795 $56,291,020 48.48%6

NoPlaceLikeHome(NPLH) $07 $0 0%NationalHousingTrustFund(NHTF) $07 $0 0%

AffordableHomeShortfallinLosAngelesCounty(2016)

3IncludeawardstoincorporatedareasincludingtheCityofLosAngeles.4Netvalueof9%TaxCreditsawardedisapproximatelytentimestheannualaward.5AllAHSCfundswereawardedwithintheCityofLosAngeles.6StatetargetforLosAngelesCountyin2016was31%.7Nofundswereavailablein2016;fundsexpectedtobeawardedin2017.

0

200,000

400,000

600,000

800,000

1,000,000

RenterHouseholds AffordableandAvailableUnits

Shortfall

VLI

ELI

DLI

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SevereRentBurden(Paying>50%IncomeonRent)inLosAngelesCounty(2016)

92%

73%

41%

14%

3%0.4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

DLI ELI VLI Li Mod Amod

0%

7%1%

21%

9%

30%

12%

20%

PublicHousingDwellingbySPA10,129Homes

SPA1 SPA2 SPA3 SPA4SPA5 SPA6 SPA7 SPA8

0.1% 1%

70%

29%

PublicHousingDwellings byPHA10,129homes

BaldwinPark LomitaHACLA HACoLA

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89%

2%4%

3%

2%11%

IndividualsHousedbyHACOLAPrograms(2016)92,996 Individuals

HousingChoiceVoucherProgram ProjectBasedVoucherProgramVeteranAffairsSupportiveHousingProgram ShelterPlusCare/ContinuumofCare(S+C/CoC)Section8FamilyUnificationProgram(DCFS)

53%25%

22%

TotalHousingChoiceVouchersallocated(2015)

HACLA

HACoLA

AllOtherPHAs