Transcript The Complex Dynamics of Inequality: Social Structure, Spatial Distribution, and Housing Policy Victoria Basolo, Ph.D., AICP Planning, Policy & Design University of California, Irvine May 12,

The Complex Dynamics of Inequality:
Social Structure, Spatial Distribution, and
Housing Policy
Victoria Basolo, Ph.D., AICP
Planning, Policy & Design
University of California, Irvine
May 12, 2006
Percent
Percent in Poverty
0.200
0.180
0.160
0.140
0.120
0.100
0.080
0.060
0.040
0.020
0.000
LA-Long Beach PMSA
Orange County PMSA
Riverside-San Bernardino
MSA
San Diego MSA
1969
1979
1989
Year
Source: SOCDS, Accessed at http://socds.huduser.org/index.html
1999
Percent
Households Living with Conditions (Owners),
1990 & 2000
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
1990
2000
Los
Angeles
County
Orange
County
Riverside
County
Area
Source: HUD Special Tabulations of Census 1990, 2000
San
San Diego
Bernardino
County
County
Households Living with Conditions (Renters),
1990 & 2000
Percent
62%
60%
58%
56%
1990
54%
2000
52%
50%
48%
Los
Angeles
County
Orange
County
Riverside
San
San Diego
County Bernardino County
County
Area
Source: HUD Special Tabulations of Census 1990, 2000
Median Household Income & Median Housing Value,
Percentage Change, 1970-2000
(in constant $s)
Percentage Change
1.400
1.200
1.000
0.800
Md HH Income
0.600
Md Housing Value
0.400
0.200
0.000
LA-Long Beach
PMSA
Orange County Riverside-San San Diego MSA
PMSA
Bernardino MSA
Area
Source: SOCDS, Accessed at http://socds.huduser.org/index.html
Production Lag in the 1990s
State of California
180,000
160,000
NO. UNITS
140,000
120,000
Single-Family
Units (Permits)
100,000
80,000
Multi-Family
Units (Permits)
60,000
40,000
20,000
YEAR
Source: California Department of Finance and U.S. Census Bureau.
02
20
00
20
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
19
82
0
Production Lag in the 1990s
Orange County
16,000
NO. OF UNITS
14,000
12,000
10,000
Single-Family
Units (Permits)
Multi-Family Units
(Permits)
8,000
6,000
4,000
2,000
YEAR
Source: Counting California
97
19
96
19
95
19
94
19
93
19
92
19
91
19
90
19
89
19
88
19
86
87
19
19
85
19
84
19
83
19
19
82
0
Percent Whites, Not Hispanic
1990 & 2000
1990
2000
N
Source: U.S. Census Bureau, 1990 Census, STF 1
Source: U.S. Census Bureau, Census 2000, SF 1
Percent in Poverty, 1999
N
Source: U.S. Census Bureau, Census 2000, SF1
Median Household Income, 1999,
by Race/Ethnicity
Household
Median HH
Income
White, not Hispanic or Latino
$65,160
Asian
$58,501
Black or African American
$49,972
Hispanic or Latino
$44,676
Source: U.S. Census Bureau, Census 2000, SF3
Percent of Housing Units Lacking
Complete Plumbing, 2000
N
N
Source: U.S. Census Bureau, Census 2000 SF 3
Homeownership Rate, 2000
N
Source: U.S. Census Bureau, Census 2000, SF1
Housing Markets are segmented into
submarkets of quality (cost): 2000
Example: County of Orange
MHI 1999 = $58,820
Median Sales Price 1999 = $280,900
Income
Mortgage Loan1
9.6%
$150,000 or >
$498,000 or >
13.9%
$100,000 - $149,999
$333,000-$498,000
14.0%
$75,000 - $99,999
$250,000-$333,000
20.7%
$50,000 - $74,999
$165,000-$250,000
24.5%
$25,000 - $49,999
Rent ($625 - $1,250); ~$165,000
17.4%
< $25,000
Need subsidy; rent ($625)2
Housing Sub-Markets
High
$
Low
Sources: U.S. Census Bureau. 2002. Census 2000, STF 1 and 3.
US HUD. Fair Market Rents History.
California Association of Realtors from Counting California website
HSH Associates, Financial Publishers
1Assumes
2$625/mo.
30-year fixed loan at 8.29% (at 30% of income)
(at 30% of $25,000 income); FMR 2000=$891
Purchasing/Renting a Home
in Orange County, 2005
Estimated MHI 2004 = $64,416
Median sales price of existing
home in 2005:
$593,0001
Fair Market Rent in 2005:
Income needed (at 30% of
income):
Income needed (annual):
$1,3922
$10,652/mo.
$55,680
($127,824/yr.)
Income needed (at 40% of
income):
Housing Wage (40-hr wk):
$26.77/hr.
$7,989/mo.
($95,868/yr.)
Sources: American Community Survey, 2004.
Orange County Report 2006 at http://orangecoastrealestate.com/news_annual.htm
1 At
2
6% with a 10% down payment
Two-bedroom unit
Subsidized Housing:
Housing Choice Voucher Program

Voucher program is the primary strategy to assist
lower-income people with their housing needs

Voucher household pays 30% of their income
toward rent with public subsidy paying the
remainder up to “fair market rent”

Voucher program allows household to move with
assistance
Location of Voucher Holders, 2002
(OC and Santa Ana)
Voucher Holder
Not to scale
Source: Basolo, 2005
Major Findings
Voucher Study

Minority households with vouchers live in worse
neighborhoods, compared to Non-Hispanic Whites
with vouchers, even when mobility and rent are
held constant

Female-headed households with children using
voucher assistance live in worse neighborhoods
than other voucher households
Source: Basolo & Nguyen, 2006; Basolo, 2006
Housing Policy
• Federal leadership on housing policy has been
declining for 35 years, escalating in the last few
years
• State policy in California has been trying to fill the
void through legislation and ballot measures
• Local governments have a mixed record on
implementing housing policy funded by state and
federal governments and, existing research from the
1990s indicated that over 50% of the cities in a
national sample spent no local dollars on affordable
housing programs1
1
Basolo (1999)
State-Local Housing Policy
• California state law requires a housing element
that includes planning for a regional fair share of
housing at all income levels
In 2002, one-third of the cities were
out of compliance1
• Numerous attempts in the California legislature to
strengthen regional fair share housing provisions
have failed
1
Lewis (2003)
Housing Policy
• California State Law requires local jurisdictions to adopt a
density bonus (granting developers additional units above
that allowed by existing zoning, if they include a certain
percentage of affordable housing in their developments)
Again, not all local jurisdictions have
complied with this law
• Many jurisdictions in California, including cities in Southern
California, such as Los Angeles, Anaheim, and San Diego
have adopted inclusionary housing policy
Continued fight with builders. Biggest
opportunities are in areas with larger
tracts of open land, which appear less
likely to adopt IH policy
Housing Policy
• California State Law requires local redevelopment
agencies to set-aside 20% of their tax increment funds
for low- and moderate-income housing
Some jurisdictions are sitting on this
stockpile of funds, instead of producing
housing
Housing Policy
• California legislators keep returning to the ballot
box to approve funds for affordable housing
development
2002: Prop 46 = $2.1 billion for housing
Bond issues cause expansion/contraction of
administering agency with loss of experience
among staff – unable to plan long term1
Developers and local jurisdictions compete
for funding, causing geographically uneven
benefits
2006 (Nov.) Bond on ballot includes $2.8
billion for housing
1Basolo
(2006)
Conclusions
• (Southern) California has a “housing crisis”
• Housing prices have increased at a much steeper rate
than household incomes
• The housing crisis disproportionately affects minorities
and lower- and middle-income households
• Market forces, and existing public efforts, are not
resulting in substantial gains in adequate, affordable
housing
Future Policies
• A permanent source of state housing funds
• Land use planning with mandatory fair-share
housing development
• Regional negotiation among jurisdictions to meet
fair share requirements (link to tax-sharing)
• Incentives to link housing, jobs, and transportation
within the region
• Employer-based cooperative solutions