Bond money is only a start toward reducing homelessness in Southern California

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LOS ANGELES — Advocates for homeless people in Los Angeles are finding that creating a revenue stream to build housing only solves part of the problem.

The city of Los Angeles’s homeless population jumped last year by 20% to nearly 34,000 just as the city began spending $1.2 billion in bonds approved by 77% of voters in November 2016 to tackle the issue, according to numbers released in May. Los Angeles County's homeless population increased 23% to 58,000.

The city sold $86.5 million in taxable bonds in July to provide gap financing on eight projects totaling 615 units, of which 415 would be permanent supportive housing for homeless people and 200 will be affordable housing.

Every member of the City Council signed a pledge March 20 that each would approve 222 units of housing for homeless people in their respective districts over the next two years. The move came after council members faced criticism that developers were having trouble obtaining the required letters of approval from the district's councilmember, slowing the process.

The pledge will result in 3,330 units citywide, which would be a huge victory, said Vanessa Rodriquez, a spokeswoman for Council President Herb Wesson, who worked with four other council members on the pledge.

“The idea is that the units would be online by next year,” Rodriguez said.

The only way to scale up fast enough to have an impact was to make it a citywide effort, she said.

Though the homelessness numbers for Los Angeles do not appear to reflect progress, a Los Angeles affordable housing developer says the city’s new bond program is making it easier to build supportive housing for the homeless more quickly.

In addition to the city’s $1.2 billion Proposition HHH parcel tax-bond measure, county voters also approved in March 2017 Measure H, a quarter-cent sales tax that will raise $355 million annually to fund prevention efforts and services for homeless people.

“We have never had this level of resources for both housing and supportive services,” said Mike Alvidrez, chief executive officer of Skid Row Housing Trust. “You can’t build housing for the homeless that is effective without providing medical, mental health or rehabilitation services.”

Skid Row Housing Trust qualified for bond funds for three projects that will add 255 units in downtown Los Angeles. Six Four Nine Lofts and Health Center broke ground two weeks ago. It will have 55 mixed-income units, of which half will be permanent supportive housing. It also houses the 25,000-square-foot Joshua Health Center, a medical clinic.

The 100-unit SP7 — being constructed on two different sites — and 99-unit Flor are in pre-development.

The city’s efforts come at the right time, because affordable housing developers aren’t anticipating much money will be available from a federal tax credit program administered through the State Treasurer’s Office. With the corporate tax rate slashed to 21% from 35% through the tax bill, there isn’t expected to be much demand by corporations to purchase tax credits.

The federal government did provide more funding than anticipated to federal affordable housing programs in the omnibus spending bill recently signed by Trump, Alvidrez said.

Efforts would be even more effective if a $2 billion state bond program approved last year by state lawmakers were not tied up in a lawsuit, said Yolanda Chavez, an assistant city administrative officer.

Then-Senate President Pro Tem Kevin de León, D-Los Angeles, proposed the bonds to finance new and rehabilitated housing for mentally ill people living on the streets.

The bonds would be repaid with revenue generated by Proposition 62, a 1% surcharge on income over $1 million approved by voters in 2004 to fund mental health services. De Leon and former Sen. Darrell Steinberg, who authored the 2004 measure, said that building housing for chronically homeless people with mental illness met the intent of the surcharge.

Sacramento attorney Mary Ann Bernard argues in her lawsuit that the original bond measure did not list housing for the mentally ill as an appropriate use. The next hearing in the case isn’t scheduled until July.

The absence of the expected contribution from the state bond program means the city is contributing more per unit than anticipated in the first few years of the program, Chavez said.

“The initial estimates to build 10,000 units with the $1.2 billion in bond money was based on all the leveraging sources available,” Chavez said.

The city expects to issue bonds for its program again in July.

The City Council’s pledge to approve 222 units in each district is a reaction to the historic trend in which supportive housing has been built in areas where land costs are cheaper.

“The Housing Department has been financing 300 a year for the last 20 years,” Chavez said. “If you look at where they have been built, there is a bit of an imbalance. There has been a lot built in south Los Angeles, on the east side and central area of the city.”

It has been harder to build affordable housing on the more expensive Westside, but the city has created a bump in the subsidy for those areas, Chavez said. It is also targeting city-owned parking lots and other parcels for development, she said.

The first city-owned property to be developed is in Venice two blocks from the beach, she said.

The city and the county of Los Angeles have both been working on a variety of programs to ease the problem. The city passed an ordinance in which motel owners can master lease their properties to the city for 10 years. It is also building temporary shelters similar to the modular classrooms on city-owned parking lots. The first one planned is a 60-bed shelter in a downtown city lot.

A developer also received approval to build supportive housing on the federally owned Veterans Administration campus on the Westside.

The city will pay for the temporary housing through its general fund. The county will contribute money from Measure H to provide services.

The number of people being pushed into homelessness continues to outpace efforts to help them.

“We recognize that we don’t even have the housing inventory in California to meet the needs of the people who have jobs,” Chavez said. “We are seeing an increase in homeless families with parents who have jobs, but can’t afford rent.”

Despite the challenges, Chavez, who previously worked as a deputy assistant secretary for the federal Housing and Urban Development department in the Obama administration and as an executive officer for the Los Angeles Housing Department, said she sees room for optimism.

“The reason I am optimistic is the coordination and collaboration between the city, county for-profit and nonprofit partners is unprecedented,” Chavez said.

The city has implemented a procedure to have joint memorandums of understanding involving the city, the county and the Housing Authority of Los Angeles to make the process less onerous for developers, she said.

The city created a Housing Policy Unit two years ago that spearheaded efforts like the so-called linkage fee that places a charge on new development, anticipated to raise $100 million. That unit also created the motel ordinance and allows higher density on transit-oriented development that includes affordable housing units.

“In the last two years, they have done incredible work,” Chavez said.

Efforts in Orange County to tackle the issue have drawn ire from residents, who have protested at county supervisors meetings. The county is also defending itself against a lawsuit brought by advocates for homeless people in U.S. District Court.

County officials evicted an encampment from the Santa Ana riverbed. The 30-day motel vouchers it supplied to the evicted people under a federal Judge David Carter's order expired this week, and the Orange County Board of Supervisors withdrew a proposal March 27 to place temporary shelters at sites in Irvine, Huntington Beach and Laguna Niguel for homeless people after residents protested.

The county supervisors did commit to allocating $50 million. How that money will be spent has not been determined.

Irvine Mayor Don Wagner and Third District Supervisor Todd Spitzer announced March 28 in a statement that they had partnered to assess, pursue and fast-track opportunities for veteran’s and women’s permanent housing at the county-owned West Alton Parcel at the intersection of Irvine Boulevard and Alton Parkway. But the Costa Mesa City Council voted unanimously against that proposal.

The judge has asked all 34 Orange County cities to be prepared to answer the question as to how each city will contribute to addressing homelessness.

Carter warned the cities that if they don't create additional shelters for the people displaced from the riverbed he could bar the cities from enforcing anti-camping ordinances.

Jones v. City of Los Angeles, a 2006 Ninth Circuit Court of Appeals care, prohibits enforcement of anti-camping ordinances when shelter and services are unavailable.

The judge became involved after advocates for homeless people sued the county for an answer as to where it would house the homeless people displaced from the riverbed.

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Affordable housing General obligation bonds City of Los Angeles, CA County of Orange, CA California