On Tuesday, the Los Angeles City Council voted unanimously to expand its affordable housing acquisition program, pledging to purchase 10,000 units by 2030.
Last year, the Housing Authority of the City of Los Angeles bought more than 1,000 units in existing buildings offering below-market-rate rents. This has proven to be a more cost-effective solution than building new units of affordable housing. The average cost per unit works out to about $231,690, roughly half the price of new construction.
The City intends to purchase 1,500 units by 2022, 5,000 units by 2025 and 10,000 by 2030 in an effort to preserve affordable housing for low-income residents. While initiatives such as the Transit Oriented Communities (TOC) Incentive Program have encouraged developers to add more affordable units to their projects, they come with term limits. In the case of TOC, 55 years after the issuance of the Certificate of Occupancy, affordable units can be rented at market-rate.
A report published last year by the California Housing Partnership (The Partnership) found that more than 11,000 affordable rental units in Los Angeles County are at risk of converting to market-rate over the next five to 10 years. According to The Partnership, low-income Californians save $320 per month, or $3,840 per year, when living in affordable housing. That figure is even higher for those residing in expensive coastal cities like Los Angeles.
Financing for the affordable housing acquisition program is set to be explored and could include support from financial institutions, private foundations, corporations and other organizations.
Yesterday’s 14-0 vote with one abstention followed a move by City Council to purchase Hillside Villa, a 124-unit apartment building in Chinatown whose affordable rent restrictions recently expired. Tenants are currently facing rent hikes of up to $3,200 per month and many are at risk of being evicted once the city’s eviction moratorium is lifted.
