This is Part 3 of my review of the City of Los Angeles' Comprehensive Homeless Strategy report, focusing specifically on the Housing section, which is home to the largest number of recommendations and the lion's share of the cost associated with addressing homelessness. Part 1 covered some background on the homelessness crisis and summarized the types of shelter and housing programs that the City has historically relied on, and may expect to use in the future. Part 2 looked at the efficacy and cost of different homelessness reduction strategies. In this section I review the specific recommendations included in the report.
Recommendations for Addressing Homelessness Crisis
There are a whole bunch of interesting recommendations in the report, and for the sake of brevity (ha), I'll limit this to a few of the key items.
1. Increase Supply of PSH and RRH; Grow Prevention/Diversion Capacity
Based on the CAO's analysis, it won't surprise anyone to learn that the primary recommendation within the Housing section of the report is to increase the supply of Permanent Supportive Housing and Rapid Rehousing units, and to ramp up Diversion and Prevention efforts. They also suggest that we are currently oversupplied with Transitional Housing; this may present an opportunity for conversion to a more effective use.
Current and proposed resources for several homelessness intervention strategies. Table from Comprehensive Homeless Strategy.
Including beds/units for both individuals and families, they propose the following changes (ten-year cost estimates for each program are in parentheses):
- Increase Emergency Shelter beds by 371
- Increase capacity for Prevention/Diversion by 1,230 individuals or households ($22.5 million)
- Increase supply of Rapid Rehousing units by 3,434 ($294 million)
- Decrease the number of Transitional Housing units by 1,844 units (N/A)
- Increase the supply of Permanent Supportive Housing units by 9,895 units ($742 million for construction, $807 million for leases)
The total cost of these programs would be approximately $1.87 billion over 10 years.
The production trends over the next 10 years are graphed below. They show an early dependence on Permanent Supportive Housing leases, which are slowly reined in as new PSH units are constructed. As a long-term housing strategy, construction is favored over leases because it avoids worsening LA's already extremely low rental vacancy rates, which are a major contributor to rising rents. Rapid Rehousing units and Diversion investments are assumed to be made at a consistent rate over the ten-year period.
Projected annual unit production trends over a 10 year period. Graph from Comprehensive Homeless Strategy.
The report recommends an early reliance on PSH leases because construction will take several years to ramp up and we clearly do not have time to wait to address homelessness in the City.
2. Establish Sustainable Funding Stream to Address Homelessness
Many other large cities have established Housing Trust Funds with dedicated funding streams that are reserved for homeless reduction programs. San Francisco is provided as an example: In 2012 the City passed a local ballot measure that captured some of the former redevelopment agency's revenues that had previously been used for affordable housing funding.
The Budget section of the report notes that there are a variety of funding sources potentially available, including a set-aside from the General Fund, affordable/homeless housing benefit fees, increases to parking or hotel taxes, or a bond measure. Regardless of the path our elected leaders take, they should remember that the cost of proactively addressing homelessness must be measured against the cost of doing nothing—in many cases it is far more costly to leave someone on the street than to house them and provide the full wrap-around services that address their challenges directly.
3. Utilize 4 Percent Low Income Housing Tax Credit to Expedite Construction, if Necessary
One challenge to developing over 7,000 units of Permanent Supportive Housing is the ability to secure enough complementary financing (from the state, federal government, etc.) to support the City's roughly $100,00-per-unit contribution. If those non-City funds don't materialize, each new unit would be considerably more expensive. A major hurdle to securing this outside support is Los Angeles' dependence on 9 percent Low Income Housing Tax Credits (LIHTC), which give the City more money but are far more competitive and for which there is limited total funding. An alternative is to finance development primarily using 4 percent tax credits; this option is more expensive for the City—a $150,000 per-unit subsidy rather than $100,000—but is much more easily accessible.
Assuming that every Permanent Supportive Housing unit we build is financed using 4 percent tax credits, the City's development cost would increase from $742 million to $1.1 billion. But realistically, this may be the only way to fund such a large number of PSH units—particularly when we're trying to subsidize thousands of units of low income and moderate income affordable housing at the same time.
4. Expand Adaptive Reuse for Homeless Housing
Taking a cue from the wildly successful Adaptive Reuse Ordinance in downtown LA, which has been widely credited with spurring the revitalization of the area, the authors suggest that adaptive reuse can also be used to expand the supply of Bridge Housing and Permanent Supportive Housing. Aside from providing another route to producing new housing, adaptive reuse has also been found to be slightly cheaper than building new units with similar characteristics.
Homeless housing and service providers already have experience converting buildings from hotel or motel accommodations to housing for the homeless, so the key would be to incentivize continued conversions through additional funding, expansion of Adaptive Reuse Incentive Areas, reevaluation of strict adaptive reuse requirements, and fast-tracking for zoning and permitting processes associated with redevelopment.
The 28th Street Apartments are an adaptive reuse of a former YMCA facility, now equipped with an employment and youth training program and 49 units of supportive housing for the chronically homeless, the mentally ill, and youth exiting foster care. Photo from Architect Magazine.
5. Use Public Land for Affordable and Homeless Housing
The City and County both own a lot of property, and where it isn't be used productively it should be considered as a site for affordable and homeless housing development—especially where underutilized property is transit-accessible. This recommendation aligns with similar policies established elsewhere, such as at Metro, as the growing affordability crisis seems to be turning every governmental body into an affordable housing developer, whether they like it or not.
The upside of developing on public land is two-fold: First, since the City/County already owns the property it doesn't have to spend time negotiating a purchase (or taking through eminent domain) from a private owner. So we get new housing faster. Second, since the land has already been paid for, usually at least several decades ago if not longer, the total cost of development is reduced—an important goal in the face of roughly $2 billion in homeless housing needs.
There's a bunch more in there, but those are some of the most impactful strategies in my view. If you'd like to see the full list, you can download the full Comprehensive Homeless Strategy report and skip to page 119.
Call to Action
The Comprehensive Homeless Strategy is being presented to City Council's Homelessness and Poverty Committee on Wednesday, January 13th at 3:00 PM in City Hall room 340. If you're able to make it, I strongly recommend that you attend and speak in support of the strategies and goals outlined in this report. I'm hoping to set aside some time to attend myself, so hopefully I'll see many of you there!
Thanks for reading!