LA’s $2 billion plan to reduce homelessness over the next decade is encountering financial and public resistance. Full implementation of the plan may require an increase in local taxes or the issuance of bonds to generate revenue, according to a recent report by city analysts. This source of funding is a point of contention for some LA residents who will be footing the bill for its more footloose, destitute population.
LA officials have vowed to tackle the rampant homelessness problem in the city by allocating more funds to homeless assistance programs. Increased financial support for the vagrant population is part of the 2% increase in overall spending for next year’s $8.76-billion budget proposal.
Editor’s note — The state dropped most of its program that would have prevented today’s high vagrancy rate during Ronald Reagan’s governance of California, shifting responsibility to the police and, as now, eventually the city housing authorities.
To fund this bold project, the new revenue report estimates a new local bond may generate about $1 billion, while increases to the sales and documentary transfer taxes are estimated to raise about $100 million each annually. The increased revenue will fund services and long-term housing for the more than 28,000 homeless people in LA, a number that has increased 11% since last year.
The bond and tax measures will be left to LA voters to decide this fall, requiring a two-thirds vote for approval.
In addition to these voter-approved measures, Mayor Eric Garcetti proposes using city properties to develop low-income housing projects. Garcetti also suggests imposing fees on real estate developers, referred to as “linkage fees” — still debated is its application.
LA’s homelessness problem
Recent initiatives to increase funding for homeless assistance programs arrive in response to a growing homeless population in LA, 75% of which are not housed in any private or public homeless shelter.
Finding a solution requires the public’s acknowledgement that homelessness is a complex issue traced back to multiple societal causes. 19% of LA’s homeless have a physical disability, 23% have substance abuse issues, 17% are victims of domestic violence and a considerable 31% are dealing with mental illness, according to the Los Angeles Homeless Services Authority (LAHSA).
Contributing factors to LA’s current problem with homelessness are the lack of government facilities to assist the homeless and, to a lesser extent, affordable housing in LA. The decline of government support to the homeless and those with mental illness in the 1980s has gradually escalated California’s homelessness dilemma, pushing more and more vulnerable citizens from their homes and into the streets.
However, some of LA’s recent actions to reduce vagrancy have proved fruitful. Efforts to house homeless veterans reduced the city’s homeless veteran population by 41% since last year. With support from the U.S. Department of Veteran Affairs (VA), LA provides homeless veterans with permanent and transitional housing, employment assistance, health care and mental health services. Veterans now make up only 6% of LA’s homeless population — a testimony to the efficacy of government assistance in reducing homelessness when it is allowed to do so.
Applying the same principles to the general homeless population now depends on whether society will allow local and state governments to help those homeless who are functional but lack support, skills and funds to get on their feet and join (or return to) the workforce. Government housing, employment assistance and mental health services are key to taking serious steps to combat homelessness.
LA’s housing crisis weighs in
Though ending LA’s widespread, persistent homelessness largely depends on government initiative to implement necessary programs, the city’s housing crisis also exacerbates the issue. For example, even those homeless individuals who receive assistance, such as government housing vouchers, face a competitive market and uncooperative landlords who refuse vouchers to cash in on excessive renter demand.
As LA’s tech industry and population continue to grow, the relatively low housing inventory is not meeting the high demand from renters and buyers. LA now boasts one of the most expensive rental markets in the country, with rents accounting for 47% of renter incomes.
Editor’s note — A balanced economy places this allocation for shelter closer to 30% for tenants and buyers.
An unfortunate result of rising housing costs is the forced exodus of tenants whose stagnant incomes are quickly outpaced by rental rate increases. Some of those who don’t simply leave the area and are unsettled by the loss of a support system end up on the streets, adding to LA’s and the state’s untreated homeless problem.
To improve the housing market and meet the needs of LA’s rising population and businesses, the city needs to increase its low-tier rental housing that is affordable to those who are less affluent. This requires taller, denser buildings to accommodate a higher number of units — and zoning changes to allow it.
However, talk of lofty buildings sparks backlash from more inflexible residents who oppose expansionary changes to LA’s cityscape. These Not-In-My-Backyard (NIMBY) homeowners adamantly thwart development by vocally resisting zoning changes, preventing the city from meeting local housing demand since they have time to vote — a vicious cycle that keeps rents and home prices inflated and employees scraping to get by. And perhaps ironically, it is likely these same individuals who will vote down the bond and tax measures needed to cure the homeless problem.
This is both a humanitarian crisis and a negative marketing factor agents and brokers need to think about: homelessness reduces a community’s and its neighborhood’s desirability, making it difficult for real estate agents to place buyers in areas with a high vagrancy rate and the accompanying increase in criminal activity. [See RPI Form 321]
Are zoning changes forthcoming?
It’s no secret zoning changes will open the door to the higher-density housing needed to accommodate LA’s population, increase employment opportunities and help reduce homelessness. This is a truth even city analysts recognize in their homelessness plan.
LA analysts’ homeless report acknowledges, “Los Angeles has not responded to stronger housing demand by allowing for greater residential density” and “zoning restrictions can and have limited supply of housing throughout the city.”
Part of LA’s plan to address this shortcoming includes:
- analyzing residential and mixed-use zoning citywide; and
- creating new zoning maps with designated greater density areas.
However, city officials remain loyal to the idea the city’s housing crisis can be resolved without building up. The report concludes naively that building high-rise housing is unnecessary in any part of the city — likely influenced by the resistance they will encounter from obstinate NIMBY residents, some of whom fear the loss of their sweeping urban views.
As the city attempts to balance implementing much needed zoning revisions with pleasing vociferous NIMBY homeowners, the homelessness crisis remains a burgeoning stain on LA’s cityscape. New budget proposals and the comprehensive homelessness plan mark an important paradigm shift on the issue, but its success hinges on the city’s willingness to make crucial changes to residential zoning — a process of education that remains an uphill battle.