The $1.2 billion that Los Angeles voters authorized in 2016 to build 10,000 housing units for low-income and homeless Angelenos might not be enough anymore.
Officials said Friday that rising development costs and the loss of state and federal subsidies means the program could fall 4,000 units short of its goal, the Los Angeles Times reported. The bond was authorized as part of Measure HHH and is funded by a roughly $0.35-per-square-foot citywide property tax.
Measure HHH is one of a number of initiatives L.A. has undertaken to address a growing affordability and homelessness crisis in the city. Elected officials are weighing a proposal to convert hotels and motels into temporary shelters, similar to the emergency hotel shelter policy adopted in New York.
Mayor Eric Garcetti, who has seen a nearly 50 percent increase in homelessness in the city since being elected in 2013, wants to build temporary shelters in trailers on city-owned parking lots.
About a third of the funds have already been committed to projects and officials predict that around 6,000 units can be built at the current pace. Officials originally figured the city could spend around $140,000 for each unit of housing and fund the rest with money from the state and federal tax credits that can be sold to private investors, but the recent federal tax reforms reduced the value of the latter by about a quarter.
The Times found that the average cost per unit at the 29 projects approved for Measure HHH funding was $476,000.
An oversight committee formed by Mayor Garcetti for the Measure HHH programs reported the shortfall. Committee Chairman Miguel Santa said the body would look at ways to reduce the costs per unit and increase revenue to meet the 10,000-unit goal “in light of circumstances that have changed,” according to the Times.
Margins for development in L.A. can be slim, particularly for affordable housing. New requirements have made them slimmer, and that could discourage building, according to some developers. Measure JJJ, for example, requires developers seeking certain zoning exemptions to add affordable housing and employ union labor, which drastically increases costs. [LAT] – Dennis Lynch