California’s Affordable Housing Crisis and Its Effect on People with Developmental Disabilities

 Protesters at an affordable housing rally. 

Protesters at an affordable housing rally. 


EXECUTIVE SUMMARY

Los Angeles County is in the midst of a severe affordable housing shortage. This acutely affects adults with developmental disabilities.

This crisis was brought about by market forces, community opposition to changes in land use, the lack of undeveloped land, and cuts to funding for affordable housing. The absence of renter protections creates an environment that is ripe for exploitation by investors looking to commoditize housing at the expense of low to moderate income households.

When a person is forced to pay extreme percentages of their income on rent, they are often forced to forgo food, transportation, education, health care and savings. Because of this, many people fall into homelessness, as living pay-check to pay-check leaves little money left to manage unforeseen emergencies.

There is a strong likelihood that the situation will get worse if current political trends continue that have seen cuts to local, state, and federal funding for the development of affordable housing. Recent efforts by local elected officials and voters to increase funding for our industry has been welcome, yet none of these newly allocated resources are specifically earmarked to serve people with developmental disabilities.

Public support is needed to address this critical issue. Consider donating to HOPE during the end of year giving season or contacting your elected officials to ask them to take bold action to meet the housing needs of those most vulnerable in their districts.


 

Source: CHPC analysis of 2015 PUMS data using adapted NLIHC methodology. (CHPC and SCANPH)

INTRODUCTION

FOR ADULTS WITH DEVELOPMENTAL DISABILITIES, the inability to identify and secure affordable, independent living options presents challenges in day-to-day living. In addition to these challenges, the state of California is in the midst of a housing crisis. Estimates put Los Angeles county at more than 550,000 units short of needed rental homes for those with low to moderate income.1

This shortage is most severe for people with extremely low incomes, meaning those with incomes at or below 30% of the area’s median income or poverty line. Nationally, research shows a shortage of 3.9 million rental home for these individuals.2

We recognize that this is the income category in which many of our clients find themselves. Entry-level employment and SSI does not provide enough money for people with developmental disabilities to cover the cost of housing and general living expenses.  According to National Low Income Housing Coalition’s report, Out of Reach, a person working full-time every week of the year needs to earn an hourly wage of $24.24--more than double many of the region’s minimum wages--in order to afford a median priced one-bedroom apartment.

Also, many Regional Center clients with mobility impairments need accessible housing with features like zero-step entrances, wider hallways, and door frames to accommodate wheelchairs, single-floor living, leveled door handles and faucets, and lowered electrical switches. Only 1% of homes already built have all of these elements, and the growing population of seniors with disabilities will exacerbate the shortage of accessible housing.

Unfortunately, the market left alone cannot, and will not, adequately meet the housing needs of our residents.


HOW DID WE GET HERE?

Housing in Los Angeles has for decades been more expensive than most of the country. A long coastline, beautiful landscape, mild weather, and urban centers with robust economic opportunities and infrastructure has made California a destination for many people. Starting in the 1970s, however, the gap between our home prices and the rest of the country began to widen rapidly. Between 1970 and 1980, our region’s home prices went from 30 percent above U.S. levels to more than 80 percent. This trend has continued. Today, an average home costs $580,000, more than two–and–a–half times the national average. Conversely, California’s median monthly rent is $1,730, still 50 percent higher than the rest of the country.3

Simply put, we are not building enough housing to meet the demand of the growing population in our coastal communities. There are several reasons for this reality. Community resistance to new housing--especially affordable housing in the form of NIMBYism-- is a constant road block to development. Strong environmental policies in our state limit where and how we can build. Finally, there is a lack of financial incentives for local governments to approve new housing or change land use policy.

These challenges create major barriers to the home building industry and have led to a net shortage in regional housing stock. This dynamic creates vigorous competition for the limited homes available, which drives up values, increases rents, and decreases vacancies.


MAKING MATTERS WORSE

Compounding the issue of overpopulation relative to available units is that while median rent in Los Angeles County has increased 32%, since 2000, median renter household income has decreased 3% when adjusted for inflation.1


Related

A recent example of how this housing climate can affect adults with developmental disabilities is the story of the HOPE resident Vernon. Vernon is an HRC client who had lived on his own for decades. He maintained a market-rate rental apartment with the financial assistance of his mother, his fixed income, and his part-time employment. Over the last several years though, his rent had risen exponentially to the point where he and his mother could no longer afford for Vernon to remain independent.

In many local municipalities, there is an alarming lack of renter protection, including in Long Beach, which is the biggest city in our service area. Other large populations of renters, from San Diego to Seattle, all have basic tenant protections like just-cause eviction and rent control. That is not the case in most of our local communities where land lords can raise rents indiscriminately, or evict tenants and charge higher rents to more affluent potential residents.

Josh Butler, Executive Director at Housing Long Beach, recently wrote in a Press-Telegram expose on the subject, “Turning housing into a commodity is another major problem. In recent years, city-owned property has been snapped up by real estate speculators and corporate developers who have contributed to driving up rents,” he continues. “The multi-family apartment market is not the only market in peril. The biggest owners of single-family home rentals in California are also no longer mom-and-pop landlords, but mega Wall Street corporations like Blackstone and Colony Starwood.”4

Butler believes that this time, instead of predatory mortgages, we see predatory rentals. State laws that were initially passed to protect owners who may haveone or two rental units now serve to line the pockets of big business landlords.4


CONSEQUENCES

This type of housing competition acutely impacts adults with special needs who are on fixed incomes or are earning minimum wage in entry level jobs.

According to the annual homeless count coordinated by the Los Angeles Homeless Services Authority, there were 1,483 people with developmental disabilities living in the streets of LA County.5 This does not take into consideration those living in overcrowded, unhealthy, or unstable conditions. It is no surprise that this unaffordable housing climate ultimately leads to such dire outcomes.

One of our current residents, Alex, has had first-hand experience with not having access to an affordable home. He bounced between an abusive family environment, an overcrowded apartment which he shared with 11 other people, and a homeless shelter. Fortunately, Alex now lives in a HOPE home, but this is not the case for the hundreds of people on our waiting lists. 

Housing is commonly considered to be “affordable” when a household spends less than 30 percent of its income on rent or mortgage, yet Los Angeles County’s lowest-income renters spend upwards of 70% of their income on rent, not leaving enough for food, transportation, health expenses, and other needs.6 Today, an individual earning minimum wage would need to work 92 hours a week to afford a modest one bedroom apartment at fair market rent.7

It is important to note that a person who has 30% of a $200,000 a year income remaining after paying rent is presented with a very different set of challenges than a person who has 30% of a $19,000 annual minimum wage income remaining.  

He bounced between an abusive family environment, an overcrowded apartment which he shared with 11 other people, and a homeless shelter. Fortunately, Alex now lives in a HOPE home, but this is not the case for the hundreds of people on our waiting lists. 

We hear this story from our residents all the time. One HRC client and past HOPE resident named Mead--who now happily sits on our Board of Directors--recently told us the story of how he could not afford rent before he moved into a HOPE home. He recalled getting home at 11:30 each evening after pulling double shifts in retail and as a busboy in a restaurant. Keeping this schedule was the only way for him to afford sharing a one bedroom apartment with a friend.

The unaffordability of housing locks people with developmental disabilities into an endless cycle of poverty and housing instability.


RESIDENT HEALTH IMPACT

Poverty and housing instability also creates a negative impact on the physical and mental health of people with low-incomes--particularly due to increased stress and fewer adequate options for food and health care.8 The CDC has determined that 23% of all homes in the US are found to have unhealthy characteristics that negatively affect the health of occupants.10 Negative housing factors are exacerbated for people with developmental disabilities who often are medically fragile.

The shortage of safe, affordable homes also limits choices about where our clients can afford to live, often relegating them to substandard housing in unsafe, overcrowded neighborhoods with fewer options for health promotion like parks, bike paths, and recreation centers.8


LOSS OF PUBLIC FUNDING TO SUPPORT AFFORDABLE HOUSING

State programs that fund housing are not guaranteed or permanent, and they are often subject to drastic cuts based on the politics or economics of the day. The Great Recession of 2007-08 saw California’s Redevelopment Agencies dissolved to assist in balancing the state budget.

Redevelopment agencies were originally established to give local governments the ability to capture a greater share of property taxes. This pool of funding was in part used to allow cities to invest in housing for people with low-incomes. By ending redevelopment agencies, the state effectively seized control of billions of dollars previously allocated for affordable housing development.

(CHPC and SCANPH)

According to a joint publication of California Housing Partnership and SCANPH,“Since 2008, cuts in federal and state funding, including the elimination of state redevelopment agencies, have reduced investment in affordable housing production and preservation in Los Angeles County by nearly $457 million annually, a 64% reduction.”1

Public support is critical in making changes to meet housing needs. The nonprofit sector relies on this support and encourages the public to view housing as a human right and not as a speculative commodity.


HUD PROGRAMS AND TAX CREDITS AT RISK

Nationally, the future of affordable housing is grim. The Trump Administration has announced legislative and budget priorities that greatly put federal affordable housing dollars at risk.

One of the primary funding sources for the building of affordable, multi-family housing apartments is the Low Income Housing Tax Credit (LIHTC). This program was launched in 1986 to provide private owners with an incentive to create and maintain affordable housing. The LIHTC program works through a subsidy mechanism. The IRS allocates funds on a per capita basis to each state. The process by which credits are allocated is competitive.11

Investors are then given the opportunity to buy tax credits in qualified affordable housing properties that have received a state allocation, thus creating cash equity for owners that reduce a project’s debt burden. In exchange, the owner agrees to rent a specific number of units to qualified tenants at below-market rents.11

 HUD funds many important housing programs throughout the U.S. 

HUD funds many important housing programs throughout the U.S. 

This program is now in jeopardy with the Trump Administration’s tax reform proposals to lower the corporate tax rate from 35% to a targeted 15%. If this were to be fully realized, the value of tax credits would dramatically diminish, pulling the proverbial rug out from under the nonprofit affordable housing industry.

Beyond the potential risk to the invaluable LIHTC program, the Trump Administration's has proposed a budget that includes deep cuts to the Department of Housing and Urban Development (HUD). HUD programs at risk include tenant & project based rental assistance, public housing, HOME Investment Partnership funds, and Community Development Block Grants. These are all foundational to housing affordability in the U.S.  A cut to HUD would be another serious blow to an industry already struggling to meet demand.


LOCAL VOTER SUPPORT FOR AFFORDABLE HOUSING

The good news in California is that the state legislature and the voting public are both aware of the damaging impacts the affordable housing crisis is having on our communities. With the recent passing of “No Place Like Home” legislation in Sacramento, and the voter approved Measure H and Measure HHH, additional funding to help develop new affordable housing is on its way. However, it is important to take note, that these measures directly fund housing and services for the chronically homeless and those who need mental health services. None of this funding is directly assigned to support standard affordable housing for low-income people with developmental disabilities.


HRC AND HOPE ADDRESSING THIS CRITICAL ISSUE

Creating HOPE more than 20 years ago demonstrated Harbor Regional Center’s innovation, support, and drive to develop housing solutions for its clients, enabling HRC to create safe, stable, and affordable housing for hundreds of residents.

These homes empower adults with developmental disabilities to live with increased self-reliance without the threat of displacement or negative health impacts. Our residents pay 30% of their income toward rent and receive varying levels of in-house services.

However, we must not stop here. Together, HRC and HOPE are developing innovative ways to address this crisis. We are creating new non-development based housing service that will assist clients in navigating the complex rental application process at apartments throughout the region, creating relationships with landlords to obtain master leases, and providing rental subsidies to make up the difference in market rate rents. We are also looking to partner with larger affordable housing agencies to set-aside units for our population within their larger affordable apartment communities.

The affordable housing crisis is not a new challenge for HRC and HOPE, and we will continue to be innovative in ways to adapt to new challenges.


WHAT YOU CAN DO

Public support is needed to address this critical issue. Please consider donating to HOPE during this end of year giving season or contacting your elected officials to challenge them to take bald action to meet the affordable housing needs of their districts.

 ADVOCATE

If you are interested in advocating for affordable housing to serve people with developmental disabilities, you are encouraged to call or email your local elected officials. Let them know that housing affordability for those most vulnerable in your community is important to you as a voter. More than ever, the affordable housing industry needs strong advocates at the local level. Visit Housing California for further instructions: https://www.housingca.org/action-center.

DONATE

There are several ways to donate to HOPE. Make a contribution through the HOPE Helps Gift Catalog, in lieu of a traditional gift, for a loved one this holiday season. A personal card will be mailed to your honoree notifying them of the donation made in their name.  Make your gift today

 

To assist HOPE in the ongoing purchase and acquisition of additional housing units consider joining our Mission Makers program by signing up to make a recurring donation of $10 or more each month.  Join today      

 

Consider contributing to our Pave it Forward brick-naming fundraiser. For $250, donors have the opportunity to "own" a piece of HOPE's mission. Each purchase comes with a personally inscribed brick that will then be placed in a prominent location at one of our properties.  Purchase today

 

REFERENCE LIST

1. California Housing Partnership (2017/May). Los Angeles County Renters in Crisis: A Call for
         Action. Retrieve from
http://1p08d91kd0c03rlxhmhtydpr.wpengine.netdna-cdn.com/wp-
         content/uploads/2017/05/Los-Angeles-County-2017.pdf.
2. National Low Income Housing Coalition (2017). Advocates Guide 2017. Retrieve from
         http://nlihc.org/sites/default/files/2017_Advocates-Guide.pdf.

3. Legislative Analysts Office (2015/Mar). California’s High Housing Costs: Causes and
         Consequences.
Retrieve at http://www.lao.ca.gov/reports/2015/finance/housing-
         costs/housing-costs.aspx.
4. Butler, J. (2017, July 27). Long Beach Renters’ Problems Need Urgent Attention. The Long
         Beach Press Telegram. 

5. Los Angeles Homeless Services Authority (2016) Greater Los Angeles Homeless Count.
6. Robert Wood Johnson Foundation (2011). Housing and Health: Exploring the Social
          Determinants of Health
.
7. National Low Income Housing Coalition (2014). OUT OF REACH 2014.
8. National Center for Healthy Housing (2012). Housing and Health: New Opportunities for
         Dialogue and Action
.
9. Richie, D. Our Zip Code May Be More Important Than our Genetic Code: Social Determinants
         of Health, Law and Policy
.
10. Center for Disease Control and Prevention (2009). Inadequate and Unhealthy Housing.
11. Overview Of The Low Income Housing Tax Credit Program ... (n.d.). Retrieved from
         https://nhlp.org/lihtcoverview