Markets & Economy

How can expensive cities provide affordable housing for workers?

A recent forum examined different options for cities trying to provide opportunities for lower-income workers
  • Nurses, teachers, administrative staff, construction workers, firefighters, paramedics and law enforcement officers are among the numerous workers who are leaving California due to lack of affordability.
  • Middle class workers are often ineligible for low down payment subsidies.
  • Potential solutions include billions in state and local funding for providing affordable housing and changes in zoning that allow for more development.

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As housing prices rise, the heart of the middle class gets squeezed out.

In Los Angeles, increases in prices not only provoke workers to leave, but they also make it harder for small businesses to flourish.

On February 8, the Southland Regional Association of Realtors (SRAR) hosted the Housing Our Workers forum to discuss how to solve the problem of affordable housing.

The National Association of Realtors (NAR), the Valley Economic Alliance and BizFed Institute were also part of the forum intended to provoke honest conversation on the construction of affordable housing in the state.

Nurses, teachers, administrative staff, construction workers, firefighters, paramedics and law enforcement officers are among the numerous workers who are leaving the state — and are also among those most needed for a successful community.

The economy of California is also at risk because businesses are unable to recruit and retain employees. Lack of affordable housing has led to increases in long commutes, straining local freeways and having a real impact on the quality of life for workers.

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Rising costs plus limited supply 

If a person is earning less than $100,000 in Los Angeles, purchasing a home is most likely not possible.

The median price of a home in the area is approximately $600,000. To rent a home, it might cost $2,200 to $2,500 per month. And to rent a one-bedroom apartment, it will cost a minimum of $1,500.

Middle class workers are often ineligible for low down payment subsidies. Workers are often spending 50 percent or more of their income simply on housing.

Part of the problem is housing supply. Data from the California Department of Housing and Community Development shows that developers are currently building an average of 80,000 new California homes a year, but 180,000 are needed.

Is the answer more legislation?

Potential solutions include billions in state and local funding for providing affordable housing and changes in zoning that allow for more development.

A new law SB 1069, eases rules for “accessory dwelling units,” the so-called granny flats. The new rules reduce parking restrictions and increased the maximum allowed size of a granny flat. However, nearly every developer reports that trying to get projects built is a Herculean task.

The California housing crunch isn’t just limited to Southern California; it’s equally a problem in the San Francisco Bay Area.

Scott Wiener, who represents San Francisco and northern San Mateo County in the state Senate, recently introduced SB35, a Housing Accountability and Affordability Act.

The proposed bill says if a city isn’t meeting its regional housing goals, SB35 will streamline a city’s approval process so projects that meet zoning requirements are automatically approved (subject to design review and paying construction workers prevailing wage).

Deidre Woollard is the co-founder of Lion & Orb, a real estate public relations company. Follow her on Twitter @Deidre.

Email Deidre Woollard.