Homelessness

Audit Finds Cost of Building Supportive Housing in L.A. Exceeds Median Price of a Market-Rate Condo

Los Angeles is spending $600,000 per unit on building affordable and supportive housing for homeless residents.

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High fees, excessive regulation, and NIMBY ("not in my backyard") opposition to new housing have contributed to Los Angeles' worsening homelessness crisis. Those same things are now frustrating the city's efforts to construct thousands of units of affordable and supportive housing, where social services can be offered on-site.

On Tuesday, Los Angeles Controller Ron Galperin released a damning audit of the performance of Prop. HHH, a $1.2 billion bond issue passed overwhelmingly in 2016 to help finance the construction of 10,000 units of housing for homeless and low-income residents.

"More than two years after the first bond issuance and nearly three years since voters approved HHH, not one bond-funded unit has opened," Galperin announced. "It is clear that the City's HHH program is not keeping pace with the growing demand for supportive housing and shelter."

117 Prop HHH-funded units are scheduled to open in 2019. Los Angeles' homeless population jumped 16 percent this year to 36,000.

Spiking development costs also mean that Prop HHH will end up subsidizing only about 7,700 units, not the 10,000 units promised to voters.

A 2016 estimate of construction costs put the price of adding new units at between $350,000 to $414,000. But the median per-unit cost at Prop. HHH-funded projects now stands at $531,373. Over 1,000 units are expected to cost over $600,000, and one project has units going for over $700,000.

"The cost of building many of these units exceeds the median sale price of a market-rate condominium in the City of Los Angeles and a single-family home in Los Angeles County," noted the controller's audit.

Reason has covered the high cost of building affordable housing in the Los Angeles area before, finding that sky-high land costs, union wage requirements, high development fees, and expensive design requirements have helped to push up the costs of these projects.

The controller's audit pinpoints many of these factors as helping to raise the costs of Prop HHH, especially the union wage mandates, city fees, and accessibility requirements for units serving disabled tenants.

Also driving up costs are city regulations that require developers receiving Prop HHH funding to have experience building supportive housing, and the need of these developers to piece together financing from multiple local, state, and federal sources.

Compounding all of these factors is Los Angeles' byzantine permitting process, which can delay projects for years at a time, while also giving neighborhood opponents ample opportunity to slow things up even more.

The city did try to address this problem by passing a 2018 ordinance streamlining approvals for Prop. HHH projects and lifting some zoning regulations, including parking requirements and density limits. Community groups, however, ended up suing the city over that ordinance, claiming it violated the California Environmental Quality Act (CEQA).

CEQA lawsuits are a favorite tool of NIMBYs to either stop unwanted projects or extract concessions from developers.

In response, the California legislature passed a law this year exempting Prop HHH projects from CEQA. That should speed up project delivery. However, Tuesday's audit chided the city for streamlining permitting only after committing funding to projects.

The controller's audit also included a number of recommendations for bringing costs down, including finding more ways of streamlining approvals, embracing cost-saving construction methods, and shifting funding from the most expensive projects to temporary shelters.

Some of these recommendations could also be applied to housing development in general. Los Angeles' affordability problems are themselves a product of zoning laws that limit where housing can be built, lengthy permitting processes that drag out the approval of what housing is allowed, and state environmental laws that allow project opponents to cynically delay development.

Ensuring that Prop HHH projects don't run into these roadblocks, as the controller's audit has recommended, is a good idea. Removing these obstacles for market-rate housing as well might mean fewer people would need to rely on the government to house them in the first place.

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  1. Of course the homeless population jumped up they promised them housing. If you build it, they will come. It is rediculas though that it takes three years when one of my clients can get a communal kitchen trailer and restrooms and a dozen tuff sheds together in one week.

    1. But a communal kitchen, temporary bathroom facilities and sheds encampment would be demeaning for homeless people! Livable living conditions are no less a human right than a livable wage with free healthcare, free college and a universal basic income. Why should only rich people have the stuff that only rich people can afford? Aren’t we all entitled to be above average?

    2. There is absolutely no connection between homelessness and the lack of $500,000 housing units. The homeless are mostly unemployed substance abusers and the mentally unstable. They have to panhandle to buy their daily needs, there is no rent they could afford. Meanwhile, there is clearly a need for more housing construction, but it has nothing to do with the homeless.

      1. That’s one of those ‘inconvenient facts.’
        People who don’t have jobs can’t afford housing no matter how cheap it is.

  2. “High fees, excessive regulation, and NIMBY (‘not in my backyard’) opposition to new housing have contributed to Los Angeles’ worsening homelessness crisis.”

    You know who I think is responsible for homelessness in LA? Drumpf! Because people cannot afford housing when the economy is bad. And as any Reason reader knows, the Drumpf economy is absolutely terrible.

    When Democrats retake the White House and implement the Koch / Reason open borders agenda, you’ll see the homeless problem take care of itself. But until then? Understand it’s Orange Hitler’s fault every time you have to dodge human waste on the sidewalk.

    #VoteDemocratToEndHomelessness

    1. You should take your meds.
      You’ll feel better once you’re escorted back to your padded cell.

    2. boring

    3. In California, normal people can’t afford housing when the economy is booming.

  3. At some point, I hope my fellow Californians break down and consider the unthinkable: voting for Republicans.

    A choice between Democrats or Democrats just means the beatings will continue until morale improves.

  4. So a hobo in California gets a condo worth 2-3 times what gainfully employed people in flyover country pay for their house.

    1. Not only do they get a condo for free, they get to have fun selling off the copper piping and the air conditioner the day they get in there and of course have no worries about prosecution.

      1. At least maybe they’ll poop on the floor of their new house instead of the sidewalk

        1. unlikely

          1. Clearly, you’ve never been to a public housing project.

      2. The city will probably put in new copper piping and new AC unit for them to sell

      3. Where is Howard Roark when you need him?

        1. Her best book by far.

      4. Just as well no one has used copper piping in new construction for the last thirty years, then.

        1. Just as well no one has used copper piping in new construction for the last thirty years, then.

          What are you talking about? We use copper piping all the time. I can’t even think of what else you would be using for supply lines.

          1. I think he was referring to plumbing, which isn’t copper anymore. I think gas stoves are illegal in Los Angeles. One of the many regulations that were referred to.

  5. I have a schizophrenic relative. She lives in a van, and has lived rough in LA for a year. According to her and, if you read the LA Times article on homeless carefully, about 80% of the homeless population are drug addicts. Mental illness happens, but taking drugs is a choice.
    If drugs were legal, then about a third of the population would overdose in a year (non-doctor assisted suicide), one third could function like alcoholics, and the rest would have to steal a lot less, because the cost of their habit would drop.
    There are about 800,000 illegal aliens in LA, and they do not live on the streets. The issue is mostly drugs, not affordable housing.

    1. My theory is that the increase in homelessness is tied to two things. Reagan defunding a bunch of mental institutions, and white people becoming pill addicts, then heroin/fent/meth addicts.

      Once drug abuse became more common and acceptable among the racial majority of the country, we had more people becoming indigent. The cause and effect between releasing a bunch of schizophrenic people and more visible homelessness is even more obvious.

        1. How are you fucking wrong about everything?

          Your article conveniently omitted this little nugget:
          https://www.theatlantic.com/politics/archive/2015/06/americas-largest-mental-hospital-is-a-jail/395012/

          And I’ll quote it to make sure you read it:

          Other legislation contributed to the process. When Congress created Medicaid in 1965, it barred payments for people in “institutions of mental diseases” but allowed payments for community mental health centers. In the last year of his presidency, Jimmy Carter signed the Mental Health Systems Act of 1980, which provided grants directly to community mental health centers. The boost in funding was short-lived. In one of the first speeches of his presidency, Ronald Reagan complained that, through federal mandates, “a federal helping hand is quickly turning into a federal mailed fist.” His administration repealed the Mental Health Systems Act within its first year, converted direct funding into block grants for the states, and cut federal mental-health spending by one-third. No one picked up the slack.

          So yeah, Reagan dealt the deathblow to publicly funded mental health hospitals.

          1. So you’re now walking back your argument. You’re now blaming Reagan for a system on the ropes that was dying by 1980. You’re a fucking joke baby Jeffrey. Even mother jones understands the issue. You sound like a fucking high school liberal.

            https://www.motherjones.com/politics/2013/04/timeline-mental-health-america/

            Your original argument since you seemed to have forgotten already.

            “increase in homelessness is tied to two things. Reagan defunding a bunch of mental institutions, ”

            Yet from your own link, the RCI link, and mother jones they all discuss the de-institutionalization of america.. yet you blame Reagan like an idiot HS sophomore.

          2. Even Wikipedia is calling you a dumbshit.

            “The Community Mental Health Act of 1963 was a pre-disposing factor in setting the stage for homelessness in the United States.[22]”

            Yet you blame Reagan. Is there anything you don’t get wrong?!?!

          3. Shockingly much of the Homeless Problem is in urban centers run by Democrats.

            https://www.usich.gov/tools-for-action/map/#fn%5B%5D=1400&fn%5B%5D=2900&fn%5B%5D=6000&fn%5B%5D=9900&fn%5B%5D=13500

            DAMN YOUR REAGAN!!!

          4. “Other legislation contributed to the process.”

            Do you understand what “legislation” is and how government in this country works. It appears that you do not.

      1. Haha. Yeah. White people are terrible.

  6. Another progressive success story. Progressive politicians are a plague and a natural disasters. Weapons grade stupidity.

  7. Why would anyone live in this shithole called California?

    1. From my experience people here about how starting salaries are much higher out there than other places. They don’t realize that 1) those are salaries for people with marketable skills, not gender studies graduates, and 2) cost of living is also much higher, so you don’t actually get a better quality of life from the extra money

      1. Some of us were also born here. When you grew up with summer highs in the 90s, winter lows in the 30s, an on average 20-25 inches of rain per year, other parts of the country just don’t seem habitable.

    2. If you live outside of the bigger cities, can afford the higher cots of living (just saw $4.19 for regular gas) and ignore the batshit crazy politics, it is a nice place to live.

  8. “Also driving up costs are city regulations that require developers receiving Prop HHH funding to have experience building supportive housing”

    OK, this is a new one; what the hell is the massive difference between housing (4 walls, roof) and “supportive housing” (4 wall roof and ???) that they can require experience? Is it just the size of the graft, or is the actual product different?

    1. Is it just the size of the graft, or is the actual product different?

      Both.

      It’s essentially a social services building that includes residential units.

      I didn’t look too closely at the proposal, but it sounds like they’re looking for a design-build situation, so the experience requirement isn’t unreasonable on the surface (but may be intended to restrict the pool of bidders).

      Although, considering these don’t sound like temporary residences, it doesn’t speak well of the anticipated effectiveness of the social services . . . .

      1. It’s essentially a social services building that includes residential units.

        Nobody ever says, “When I grow up, I want to be an Ayn Rand villain.” And, yet, so many do…

        1. Will these be state-run or privately-operated prisons social services buildings that include residential units?

          1. Will these be state-run or privately-operated prisons social services buildings that include residential units?

            Again, haven’t dug into the specifics of the proposal, but if they’re soliciting developers, I’m guessing it will be a public-private partnership where social services will be provided by the government while rents will be collected by the developer.

    2. OK, this is a new one; what the hell is the massive difference between housing (4 walls, roof) and “supportive housing” (4 wall roof and ???) that they can require experience? Is it just the size of the graft, or is the actual product different?

      A Union that was a large contributor.

  9. That’s a feature. The entire purpose is to expand budgets, empires and create sops fo constituents like unions.

    The goal isn’t too end homelessness, it’s to increase it.

    1. That sounds like pretty much every government program.

      I remember some years back when the Department of Agriculture kicked off some new “outreach” program to boost food stamp enrollment numbers and touted the success of the program by pointing to the number of new enrollees. By that metric, total success for the program would be when every single US citizen was receiving food stamps. Yay?

  10. “Los Angeles is spending $600,000 per unit on building affordable and supportive housing for homeless residents.”

    This is how the proggies do math.
    More is better…as long as the money isn’t their’s.

  11. But what good is a free condo without free furniture, appliances, TV, cable, and WiFi? Oh, and free food and walking around money. What are they, animals? Spending other people’s money is fun.

  12. San Francisco says “Hold my beer.”

    San Francisco, Hostage to the Homeless

    https://www.city-journal.org/san-francisco-homelessness

  13. “Removing these obstacles for market-rate housing as well might mean fewer people would need to rely on the government to house them in the first place.”

    Well there you go.

  14. Don’t forget that CA also now requires solar panels on new units. Estimated extra cost it $10K per unit.

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