(Editor’s note: This is the first installment of a two-part series).
Today, California boasts 36 million people, with a growth rate of approximately 600,000 each year, thanks to newborns and those relocating to the Golden State. Ironically, California has not approved a statewide growth plan in 25 years, which is why we’re always found scrambling to deal with supply and demand.
What is the vision for housing, growth and land use needs to best meet the needs of our people? The State Department of Housing and Community Development projects a need of 3.7 million units of subsidized housing by 2020. Who is going to pay for this? Steps should be taken on the state level to ensure that local communities can meet their growing infrastructure and service needs.
Housing for California’s residents is an issue of gargantuan proportions. It’s a job for no mere politician, but for the ‘Governator.’ Gov. Arnold Schwarzen-egger is leaning toward “smart growth,” an urban vision which favors mass transit, rebuilding cities and slowing development of farmland.
Visit www.schwarzenegger.com and you’ll find that the Governator’s vision is the “wholesale restoration of declining urban areas.” He believes in cleaning up blighted sites and building homes on them.
“Some of the things the governor has signaled, looking at infill development and attached housing, all create an affordable product without being in conflict with environmental rules of preserving open space,” said Jon Ross, legislative counsel for the California Mortgage Bankers Association.
Santa Monica may serve as a worthy prototype for the Governator’s vision. The Community Corporation of Santa Monica currently oversees more than 2,400 low-income units on 78 properties throughout Santa Monica. They have developed many abandoned and under-utilized properties around town. It shares the view of what the Governator would like to do in other cities around the state.
Take our local vision and use it to revitalize the infrastructure. They’ve been building lofts all over downtown LA, but a low-income family is not going to be able to afford a half-million dollar loft.
“It creates a move-up environment: Somebody leaves a less expensive home to move there,” observes Robert Rivinius, chief executive officer of the California Building Industry Association.
Helping people pay for their housing is a huge issue. According to recent statistics from the California Association of Realtors, only 23 percent of California households can afford a median-priced home. The minimum income needed to buy that home is $93,490 — the national average is $40,990.
Not being able to live where you work is another major issue for city employees. Firefighters, police officers and other key employees often cannot afford to live within an hour’s drive to work. School districts and hospitals share the same issues because so little housing is being built in job centers. Community Corp. is confronting these issues in Santa Monica by proposing to build affordable condos along the Pico corridor. Our city is confronted with the same issues as the state: Each new condo requires a $100,000 subsidy. Where should that money come from?
The Governator has put together a highly acclaimed non-partisan troupe of individuals to tackle these monumental issues. Sunne Wright McPeak, a Democratic and opponent of “dumb growth,” has been appointed as Secretary of Business for the state Housing and Transportation department. The board of the California Housing Finance Agency (all non-paying positions requiring Senate confirmation) features John Courson, chairman, president and chief executive officer of Central Pacific Mortgage Company in Folsom (politically unstated); Peter Carey, Democrat and president and CEO of Self-Help Enterprises, a non-profit housing and community development organization; and Republican John Morris, president of John Gilbert Morris, Inc., a firm that invests in commercial real estate, venture capital, leveraged acquisitions, public global equities and public global fixed income.
“Each of these appointees has a history of service to Californians and their experience in finance and real estate makes them well-suited to serve on the agency’s board,” Gov. Schwarzenegger said. “The Housing Finance Agency serves an important role — helping low-to moderate-income Californians realize their dreams of home ownership and ensuring the availability of affordable rental housing — and will be strengthened by their service.”
The California Housing Finance Agency was chartered in 1975 with the goal of financing below-market rate housing loans for low-to moderate income families and to provide home mortgage insurance for families in hard-to-serve areas.
Next week we will explore how the Governator will work with big business to confront California’s housing issues. (For your real estate needs, , or call (310) 309-4219).
Originally published in the Santa Monica Daily Press print edition on May 19, 2004. Read the original PDF.