LONG-FORM COMMENTARY: The Absence of Affordable Housing and the Rise of Homelessness in Los Angeles

Andrea Wang, University of California, Irvine

As of January 2020, 66,433 people in Los Angeles County are homeless, a 12.7% increase from the reported number in 2019. A leading contributor to this pertinent issue is the cost of living in the area, where rents continue to increase and affordable housing is no longer accessible.

Housing is only considered affordable if a working family spends less than 30% of their income on rent, yet roughly 52.1% of households living in the county pay more than this amount. The cost of rent in the city of Los Angeles rose by a staggering 65% last decade, but median household incomes only grew by 36% over the same time period. Tenants would have to earn around $42 per hour—almost three times the city’s minimum wage—in order to afford the current average rent in Los Angeles, leaving over 500,000 low-income renter households in the county without access to affordable housing.

Unfortunately, similar trends have unfolded across both the state and the nation, with the divide between median incomes and median rents continuing to grow. A 2018 Harvard University report on the nation’s housing market found that the median rent payment increased by 61% between 1960 and 2016 while the average renter’s income grew only 5%. As the national rent has spiked, incomes have failed to keep pace, forcing many families to reduce their spending on other essentials in order to foot their housing bill. Low-income households tend to bear the brunt of the burden, as they spend a disproportionately large fraction of their income on housing. With little financial flexibility and no viable paths forward, low-income families are often either evicted or willingly leave their homes. In California, as shown in the figure below, the poorest 25% of households report spending four times more of their income on housing than households in the top 25% of the income distribution (67% vs. 16%) and roughly 11% more than low-income households elsewhere in the US.

In areas with high rates of homelessness like Los Angeles County, the situation is especially dire. Families can easily fall short on rent by unwillingly prioritizing other necessities like health care, transportation, and education, eventually leaving them with no other option but to search for places with a lower price point. However, the majority of units in L.A. only stay affordable for 30 to 55 years after they are built, meaning that within the next 5 to 10 years, roughly 8,000 more income-restricted apartments will lose their affordability restrictions. The county is already facing a severe shortfall in affordable housing units, and with L.A. now beginning to lose thousands of its existing affordable units, it has become nearly impossible for renters to find homes within a reasonable price range.

The affordable housing crisis has also been found to exert an undue burden on people of color living in the county. In a 2015 L.A. County Health Department survey, significantly more African Americans (26.2%) and Latinos (21.3%) reported that they were either late or unable to pay their rent in the past 2 years as compared to Asians/Pacific Islanders (13.5%) or whites (10.9%). The correlation between race and difficulty affording housing payments is further underscored by the composition of the L.A. homeless population, which was 39% black, 27% Latino, 26% white, and 8% other in 2016. Only 8% of L.A. county’s population is black, yet they are the largest racial group represented in the homeless population, demonstrating how the housing market has disproportionately impacted people of color.

When attempting to address the growth of the homeless population, policymakers in Los Angeles have historically focused more on getting people off the streets than providing rehabilitation and proper housing. For instance, in 1968, L.A. Municipal Code 41.18 banned individuals from sleeping, lying, or sitting on streets and sidewalks in a way that would interfere with, annoy, or obstruct the passage of pedestrians. Although this law was not actively enforced, many companies have introduced anti-homeless infrastructure like barred or curved benches to prevent people from residing on the streets.

Code 41.18 was introduced at a time when it was widely believed that criminalizing homelessness would help reduce it, but this notion eventually proved to be more detrimental than beneficial for both the city and the general population. The fines and tickets enforced on the homeless hurt their future employment prospects and limited their potential housing options, and criminalization wasted taxpayer dollars while disrupting families and local communities. People are forced to live on the street for a multitude of reasons, and the enforcement of civil and criminal punishment only intensifies their struggle with homelessness.

Over time, attitudes toward the homeless population have shifted to reflect higher levels of empathy for those who are struggling, and the focus has transitioned from criminalization to making housing more accessible. The Section 8 Housing Choice Voucher Program offers rental subsidies that can be used in the private market—with housing vouchers, low-income families only need to pay a portion of the total cost of rent. These vouchers have the potential to sharply reduce homelessness, lift many people out of poverty, and grant families an opportunity to move to safer neighborhoods, all of which are closely tied to developmental, educational, and health benefits that can improve children’s long-term prospects and lower costs in other public programs.

In theory, policies like the Section 8 voucher program would greatly benefit families, but because housing demand continues to exceed housing supply, applicants can wait years just to qualify for the vouchers. As of 2017, the L.A. County waiting list for the voucher program, which has actually been closed to new names since 2009, has an 11-year wait time, with about 40,000 people currently on the waiting list. However, the long waitlist is not due to the physical lack of housing in the county, but rather due to the lack of landlords willing to house those with vouchers. Landlords often deny housing for those in the program because of the administrative hurdles they would face in the process of accepting a voucher. From home inspections to verifying habitability, the delay in getting residency approved and prepared can prove incredibly costly for landlords.

People who are homeless already face slim odds of being approved for the voucher, but even when they do qualify, they often can’t find housing before the allotted 60-day window ends. Once the voucher expires, the person’s name is added back to the bottom of the waiting list and their voucher is no longer usable. The Section 8 Voucher program has a solid track record, serving about 1.9 million families nationally and giving more than 1.1 million elderly or disabled individuals the ability to live independently, but due to the restricted time period of vouchers and the lack of housing availability, the program can take years to effectively accommodate a homeless individual. 

Policymakers have also enacted measures designed to prevent rent hikes, but due to housing shortages, these policies have unintentionally contributed to the spike in housing costs. In L.A. County, the Rent Stabilization Ordinance (RSO), implemented on April 1, 2020, limits annual rent increases based on the percentage change in the average Consumer Price Index over the last twelve months while shielding tenants from evictions without just cause. While the RSO clearly helps protect tenants, similar rent-capping policies implemented in other counties have proven to inadvertently harm future renters by increasing the overall cost of housing. Recent empirical work on the effects of San Francisco’s 1994 rent-control policy has shown that the law has saved tenants in rent-controlled apartments between $2,300 and $6,600 per year, totaling over $390 million annually. However, when rent controls went into effect, landlords often chose not to rent out their properties, lowering the supply of available housing. As a result, the policy has driven up rents in San Francisco by 7%, costing renters a staggering $5 billion.

Moreover, because rent controls only apply while an apartment is occupied, landlords have free rein to increase the rent to whatever they choose once an apartment becomes vacant. Thus, under the RSO, those who are homeless are still left to navigate an increasingly-expensive housing market, as available homes have no rent price restrictions. To make matters worse, rent controls have also given landlords and developers a financial incentive to rent to wealthier residents in order to balance out the lower profits from rent-controlled units.

The lack of available housing in L.A. County and the failure of policymakers to reduce rising rent costs both heavily contribute to the county’s homelessness crisis. While policies like the Section 8 Voucher Program and the Rent Stabilization Ordinance are well-intentioned, they have not done enough to alleviate the burden faced by low-income households and people of color living in the county. Moving forward, policymakers must redouble their efforts to control rising housing costs and increase access to affordable housing. L.A.’s housing crisis needs urgent attention, and although no panacea exists, creative combinations of existing solutions like tax credits, government subsidies, and rent controls can begin to aid the homeless population.

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