Affordable Housing Trust Fund in Jeopardy
November 15, 2001
Los Angeles Daily News Valley
By Rick Orlov
DESPITE STRONG SUPPORT to create a $100 million affordable housing trust fund, Los Angeles city officials were warned on Wednesday to delay action until there is more information about the state and local economy.
At the same time, a study released by Loyola Marymount University said there is a crisis - and a loss in public confidence - involving the ability of government to set policies to provide all levels of housing.
In a joint meeting of the City Council's Budget and Finance and Housing and Community Development committees, officials were warned that the state's projected deficit of up to $15 billion will probably end up in a loss of revenue to the city.
Also, the city is facing its own financial problems from a slowing economy compounded by the Sept. 11 terrorist attacks, and is now looking at a $185 million shortfall this year, City Administrative Office Bill Fujioka said.
"The pundits are saying recovery will start in the spring, but I'm not convinced that will happen," Fujioka said.
Chief Legislative Analyst Ron Deaton sounded a similar alarm.
Citing past unkept promises by the state not to raid local sources of revenue - such as cigarette and vehicle license taxes - Deaton said he believes the state will be forced to take that money to balance its own budget.
If that happens, he said, the city will be forced to choose among its own programs for cuts if the council goes ahead with plans to increase the affordable housing trust fund beyond its present level of $5 million.
Mayor James Hahn campaigned on a promise to increase the fund to $100 million, but believes the council should slow its process at this point, Chief Deputy Tim McOsker said.
"The mayor wants to make sure there is a reliable, regular and untouchable source of funds," McOsker said. "That is the key. But we have to find that source."
One possibility is increasing the amount the Community Redevelopment Agency spends on affordable housing beyond its present level of 25 percent, as is done in other cities, officials said.
The Loyola Marymount study released Wednesday shows that 84 percent of Los Angeles residents believe the lack of housing - affordable and marketplace - is a major problem and needs to be addressed by local government.
Conducted by the Center for the Study of Los Angeles, the survey also found a problem among government leaders in not wanting to see any change in their housing problems.
"One of the things that has made California is its optimism," said Henry Cisneros, former secretary of the Department of Housing and Urban Development. "Now, we see pessimism and people convinced their children will not be able to afford the same type of housing they have."
Cisneros and Fernando Guerra, director of the center, said there needs to be a better understanding of the role of providing more housing - in improving education, in providing jobs and in encouraging businesses to move to the region.
They said programs such as the affordable housing trust fund being discussed by the city was only one step that is needed to solve the problems.