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Los Angeles (and the Nation) Needs a New Deal to Solve Its Lack of Affordable Housing

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In 2017 Los Angeles like many other cities in the United States has a huge lack of affordable housing similar to the terrible housing shortage the city had in World War II. Gentrification in Los Angeles has meant evictions of thousands and house destruction in a huge swath of Central Los Angeles from Venice beach through Hollywood to Boyle Heights east of downtown. In 2014 NPR reported that “the U.S. is in the midst of what Housing and Urban Development Secretary Shaun Donovan calls the ‘worst rental affordability crisis’ ever.” Nation wide huge numbers of people pay ½ or more of their income for housing or live in substandard housing or are the homeless. .

In March 17, 2015, the Wall Street Journal reporter Alejandro Lazo cites a California report shows that the state’s high housing costs is “crimping economic productivity, increasing poverty, lowering home ownership, increasing crowding, and increasing commute times. What has caused Los Angeles’, California’s and the nation’s terrible shortage of affordable housing of 2017? Urban planner Dick Platkin said, “Since the days of LA Mayor Tom Bradley in the 1980s to date, from Washington, DC, to LA’s City Hall, the Democratic Party’s approach has been a three-legged stool: jettison zoning and environmental laws, abolish government housing programs, and bend over backwards for glad-handing real estate speculators.”

FDR’s New Deal had a large number of programs that successfully increased affordable urban housing so there was no housing shortage by the late 1950s. The New Deal recognized that living in substandard slum housing had for decades harmed its inhabitants’ health and that the private sector refused to build enough lost-cost apartments and homes. The Public Works Administration of 1933 among its many building projects built 29,000 units of public housing in 4 12 years. Also in 1933 the Home Owners Loan Corporation was passed to prevent the huge numbers of foreclosures then occurring by giving homeowners longer term loans with lower interest rates allowing many people to keep their homes

The National Housing Act of 1934 created the Federal Housing Administration (FHA) that set national standards for building and underwriting of homes as well insuring banks’ home loans for home building. The FHA over the decades insured over 34 million home mortgages and 47,250 multi-unit projects.  The National Housing Act also insured loans starting in 1935 for large-scale, rental housing projects and workers’ housing projects during World War II.  Lastly the Housing Act of 1937 was passed that provided for the U.S. government to pay subsidies to local public housing agencies to clear slums and build multi-unit public housing projects for low-income families. In Los Angeles the city built 14 public apartment houses.:  Avalon Gardens was built in 1941; William Mead Homes (1941-2); Estrada Courts, 1942-3; Gonzaque Village (formerly Hacienda Village), 1942; Imperial Courts, 1944; Jordan Downs (mid-1940s); and eight other public housing projects.

The final New Deal program was the Servicemen’s Readjustment Act of 1944 which included veterans’ home loans to help them adjust back to living during peacetime. The VA home loan program has made loans to veterans who had no other way to get loans. The VA has guaranteed over 18 million home loans to veterans to purchase, construct, or refinance a home. In doing so the VA has impacted non-VA home loans making more competition of and liberalization of conventional mortgages. The building of public housing along with the many other New Deal housing programs  solved Los Angeles’ housing shortage by the mid-1950s. Nationwide in the 1950s there were very few homeless and a good stock of affordable housing including public housing projects.

Unfortunately by the 1980s Mayor Bradley announced Los Angeles again had a shortage of affordable housing. City planner Dick Platkin argues that “Mayor Bradley eventually made it clear that the [1980s] crisis resulted from the extensive cutbacks in [government] urban programs” in Nixon-Ford years, Carter years, Reagan years, and Bush 1 years. By 1990 all New Deal housing programs had been eliminated and nationwide housing was dominated by neo-liberalism which Platkin defines as “the myth that the private market could solve persistent urban problem if showered with enough deregulation and financial incentives. “ For decades private developers have been given lots of deregulation and financial incentives, but in the last four decades private developers have refused to build low-cost affordable housing resulting in a nationwide shortage of affordable housing. The recent Ghost Ship fire in Oakland and Grenfall apartment fire in London validates New Dealers belief that unsafe housing causes deaths.

In 1990s the national housing shortage worsened. Edward G. Goetz in his book New Deal Ruins:  Race, Economic Justice, and Public Housing Policy chronicles how national housing policy since the 1990s has demolished public housing and instead has subsidized units in mixed-income communities or uses tenant-based vouchers. Clinton started in 1992 the HOPE VI program which was supposed to help urban residents have good housing by destroying public housing apartments.  For example, in Los Angeles the public housing apartment buildings Aliso Village was destroyed through HOPE VI and replaced by Pueblo del Sol, which consisted of largely semi-detached single family apartments. While Aliso Village had 685 apartments, Pueblo del Sol only has 377 homes. Goetz shows that hundreds of thousands of people have been displaced and more than 250,000 affordable housing units have been lost.

Further, Goetz shows how this transformation is related to pressures of gentrification and racism in American cities:  “African Americans have been disproportionately affected by this policy shift; it is the cities in which public housing is most closely identified with minorities that have been the most aggressive in removing units.” Goetz shows myths about failure of public housing are wrong and offers a brilliant argument that renewed investment in public housing is needed.

The federal, state, and city government can help with loan insurance so private developers can build affordable housing as well as have government fund public housing directly. The destruction of current public housing should be stopped and the Hope VI program that destroys apartments stopped. Of course, other programs are needed. In Los Angeles, rent control deals with only a fraction of the apartments and houses available in the city Los Angeles, so it should extended to all apartments and homes in the city of Los Angeles. Also Los Angeles County should have rent control including in unincorporated areas.

Los Angeles refuses to protect historical R-2 neighborhoods with duplexes and apartment so tenants are evicted and duplexes and homes destroyed to build McMansions, some of which become B&B hotels. After a 10-year struggle to protect R-1, neighborhoods with single family dwellings on, city council passed a law protection about 25 small historical neighborhoods from being torn down for McMansions. Historical R-2 neighborhoods should also be protected from tearing down duplexes, apartment houses, and single family dwellings. Los Angeles planning department could refuse to allow big developers to get exceptions to planning and zoning law for their huge high-priced buildings.

California’s legislature should repeal the Ellis Act, a statewide bill that allows landlords who say they are tearing down the building or converting to condos to evict tenants and has resulted in over 22,000 affordable apartments destroyed. A new New Deal is needed to house people safely and decently.

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