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LINC in the News
Mayor Garcetti’s $8.7 billion Los Angeles budget includes big commitment
to fight homelessness

Los Angeles Daily News, April 20, 2016
By Dakota Smith

Amid growing alarm about the state of homelenessness in Los Angeles and encampments stretching from Sun Valley to San Pedro, Mayor Eric Garcetti unveiled a sweeping plan Wednesday to develop or sell city-owned property to raise money for homeless housing.

The real estate proposal, a major component of the mayor’s $8.7 billion budget for fiscal year 2016-2017, comes months after Garcetti pledged to spend at least $100 million to fight homelessness annually.

Eight city properties would be developed into affordable housing or sold to raise money for housing under Garcetti’s plan. The property list includes an unused fire station in Westchester and a hillside parcel near Hansen Dam. Half of the sites are located on the city’s Westside and one is in the San Fernando Valley.

While City Hall routinely sells surplus goods, the mayor’s real estate proposal marks a new approach to aiding the 25,000 homeless living in the Los Angeles region. At least $47 million would be raised for affordable housing with the plan, Garcetti’s office said.

At a press conference, the mayor suggested the city might even get more money from the real estate.

“This is real,” Garcetti said. “We’ve talked to council members. They’re supportive in their own districts. And we know this will move forward this year.”

Amid a 12 percent rise in homelessness since 2013, City Hall leaders have stepped up their commitment to offering housing and services. Garcetti and several Los Angeles City Council members pledged at least $100 million towards homelessness at a press conference last fall, but provided few details on where the money would come from.

Garcetti’s 2016-2017 spending plan marks one of the first major detailed proposals since that press conference. The budget allocates $50 million towards the Los Angeles Homeless Services Authority, which provides homeless services, and another $18 million towards homelessness through various department funds.

Garcetti also wants to raise $20 million by imposing a “linkage fee” on developments, a proposal opposed by the construction industry. Cities such as Boston and San Francisco also charge developers such fees, considered a charge for building new projects.

Tim Piasky, CEO of the local chapter of the Building Industry Association, said in an interview Wednesday that the linkage fee would raise the price of housing as builders pass on fees to consumers.

“It’s just another layer of costs,” Piasky said.

The City Council’s Budget and Finance Committee is expected to begin reviewing Garcetti’s budget and making changes in the coming months. Both the linkage fee and the real estate plan require City Council approval.

The real estate plan is likely to be the most scrutinized. The sites could be sold at market rate or leased to affordable housing developers. City Hall also frequently leases city properties to nonprofits for $1 a year, and a similar deal could be reached with housing developers for the sites.

Several developers praised Garcetti’s plan on Wednesday but said his proposal only makes sense if the city land is free or leased at a deep discount.

It costs about $400,000 to build a unit for a homeless person, a price that includes the cost of land, affordable housing developers say.

Jeremy Sidell, chief development officer and communications director at Los Angeles-based PATH Partners, an affordable housing developer and services provider, said finding affordable land in Los Angeles is a major problem.

“Any innovative way to address homelessness here in Los Angeles, where there’s a lack of affordable housing, is a step in a right direction,” Sidell said.

“This is a big deal, as affordable developers finding land is one of the hardest pieces of our jobs,” said Monica Mejia, deputy director of housing development at LINC Housing, a nonprofit affordable housing developer in Southern California.

The mayor’s 2016-2017 budget also funds 100 new positions in the Los Angeles Fire Department, which hasn’t seen money for new hires in several years.

To address a recent crime spike in Los Angeles, police officers will be moved off desk jobs to increase patrols. Garcetti told reporters.

Violent crime alone was up 20 percent last year, while the number of property crimes was up 10.7 percent, according to police statistics. The upticks followed a decade of declining crime in Los Angeles.

Copyright © LA Daily News
Reprinted with permission.