L.A.’s Escalating Home Prices Are Bad for Business

Despite a decade of strong economic growth, Los Angeles suffers from a profound housing shortage. This shortage has propelled home prices to record levels and increased rents by double-digit percentages.

Though increased property values and escalating rents may be good news for some homeowners and landlords, it’s a bad omen for local businesses and our economy.

The lack of reasonably priced housing in Los Angeles is wreaking havoc on local employers who struggle to recruit and retain permanent employees. Increasingly, prospective employees balk at job offers because working here means high-priced housing or a two-hour-a-day commute.

Droves of modestly paid service workers and middle-income professionals are migrating from L.A. to the Inland Empire to find more affordable housing and stable jobs.

We have no place to house our nurses, teachers and cops, not to mention our busboys, nannies and janitors.

Availability of decent and reasonably priced housing is vital to supporting a vibrant work force in our city. Without more housing, our work force will deteriorate. Business growth will slow, our economy will recede and all of us will feel the pain.

Mayor James K. Hahn recently launched an important initiative calling for a dramatic expansion of the city’s investment in housing from $10 million last year to $100 million annually by 2005. Though this new investment is a critical first step, many Angelenos are hostile to any housing development in their communities. Proposed developments that could provide thousands of units of housing for all income levels are routinely attacked from their inception by those who don’t want increased density, traffic and other negative effects in their communities.

Our city can no longer afford the costly development wars that slow and squash necessary housing production.

As the supply of housing stalls, prices will continue their upward spiral and more workers will leave. We no longer can let a reactionary, not-in-my-backyard mentality thwart our city’s future economic progress.

To avoid this real and looming threat, we must create a new, collaborative paradigm. It must be sensitive to community needs but also promote thoughtful housing development. It should empower local politicians to expeditiously resolve development disputes and implement a “smart”-growth plan for the city.

This new paradigm should allow concerned stakeholders to oppose unlawful and environmentally incompatible development. It should give city planners and managers the tools, resources and support they need to develop a “can-do” attitude toward housing development.

And it should give developers the green light to build when they propose housing projects that meet building, safety and environmental laws.