Homes vs. Schools Sets City in Chaos

This week Los Angeles will witness a monumental collision of policy agendas. Today, the Los Angeles Unified School District will hold its first hearing on a proposed steep increase in developer fees for residential, commercial and industrial development for the purpose of paying for new school construction. On Thursday, a rare coalition of civic leaders led by Cardinal Roger Mahony will hold a press conference calling for the mayor and the City Council to pay more attention to the dire shortage of housing for the poor in Los Angeles.

Both causes are honorable. Los Angeles desperately needs more schools and more affordable housing. But failing to provide coordinated leadership in our city could result in political chaos and unintended consequences for low-income families who comprise a large part of the city’s work force.

Even as the overall economy has gained momentum in recent years, housing conditions in Los Angeles have steadily deteriorated. For every six new jobs created in L.A., only one new housing unit is being built. A major national survey identified the L.A.-Orange County region as having the worst affordable housing crisis in the country, with four low-income households competing for each available affordable housing unit.

In addition to the most visible signs of homelessness, our local housing crisis is marked by widespread overcrowding, declining building maintenance and a large number (67%) of poor renters in L.A. County paying more than 50% of their gross income on rent. This means that many of the working poor--people who have jobs, but can’t afford the basic necessities--have to make tough choices between paying for food, housing, medicine, transportation, insurance and schooling.

In most cities, the city government provides leadership when housing is desperately needed. But in Los Angeles, the percentage of the municipal budget spent on housing production has fallen to 2.5%, compared to 11% in New York City, 6% in Chicago and 7% in San Jose. At the same time, the Community Redevelopment Agency has been allowed to reduce to zero the level of funds going into housing, and a large share of federal Community Development Block Grant funds, which normally go into housing, have been diverted to non-housing uses.

Responding to the local crisis, Councilman Mike Feuer persuaded his colleagues to create a task force to develop new ideas to solve L.A.’s housing crisis. On Thursday, the leaders of the task force will hold a press conference to publicly announce their recommendations, including a new trust fund to pay for affordable housing and for reforming the city planning process to encourage nonprofit and for-profit developers to initiate new affordable housing projects.

On a separate track, the LAUSD is energetically pursuing its mandate to build enough school facilities to serve the anticipated population of school-age children. Based on the assumption that new housing directly translates into additional demand for schools, the district currently charges both nonprofit and for-profit developers $1.93 per square foot in new housing developments. Now the LAUSD staff is recommending a 136% increase to $4.55 per square foot to pay for schools.

There isn’t a clear connection between housing growth and the growing demand for schools. In the 1998-99 fiscal year, only 1,940 housing units were built in Los Angeles, and yet the city’s population grew by 65,000 people. It wouldn’t have made sense to tax the 1,940 housing units to pay for the additional school costs, when it’s obvious that the 65,000 new residents did not all crowd into the 1,940 new units.

The LAUSD and city officials should jointly approach Gov. Gray Davis and Assembly Speaker Antonio Villaraigosa (D-Los Angeles) to reopen the question as to whether state law should require school districts to increase fees on affordable housing to pay for new school construction. The draconian fee increase could have a devastating effect on the economic feasibility of many affordable housing projects on the drawing board. Because many affordable housing projects tend to be economically marginal, the new LAUSD fee could block urgently needed new housing. It’s bad public policy to finance new schools by discouraging the construction of housing desperately needed by the poor.