Why pursue planning policies that aggravate the homelessness crisis?


To the surprise of hardly anyone, California’s homeless crisis is getting worse, despite — or more likely because of — the programs rolled out by elected officials and the politicians who work for them. Why is it so difficult for them to understand that the planning approaches they advocate — deregulation of zoning laws and privatization of affordable housing — are the main causes of homelessness?

While I doubt elected officials and planners can understand what is happening directly outside their offices, I have immense respect for CityWatchLA readers who send me information about the housing crisis. , why it is getting worse and how it might be resolved.

One of their ideas is that the housing crisis in Los Angeles is reoccurring and being rediscovered over and over again. In fact, the Los Angeles Time won an award in 1969 for his articles on the housing problems of that time. The newspaper’s coverage of these housing crises dates back to World War II and links them to rampant corruption in City Hall. Also, a recent UCLA study of the frequent housing crises in Los Angeles dates them back to the late 19th century, before the better-known Hooverville slums of the Great Depression.

A 2022 study by California Legislative Analyst, which another reader referred me to, explains what is new in the current crisis:

“Statewide data demonstrates that there is a severe underproduction of affordable housing (very low-income and low-income categories). At the same time, housing production for above-average incomes is the only income category that exceeded production targets. This is due to a range of factors including market demand and lack of subsidies and incentives available for the production of very modest and modest housing.

I will defer to other studies of the roots of the housing crises that regularly plagued Los Angeles from the 1890s through the 1990s, but a new feature has emerged. A Bay Area reader sent me a link to an article from 48 Hills, an online publication, similar to CityWatchLA. According to Calvin Welch, one of the leading advocates of affordable housing in San Francisco:

“The real estate/developer axis has gone from an axis dominated by various local actors to an axis dominated by national and international actors. Development, especially residential development, has been financialized and integrated into the international flow of capital. More than a third of real estate transactions are now all in cash, with the buyers often being hedge funds. They buy real estate, not “houses”, and they want full control over development policy so they can demolish existing houses and build expensive “housing”. They seek to move from local control to centralized state control so that it is easier to manipulate. This can only be done by diminishing the political power of the current residents.

Calvin Welch identified significant changes in the housing crisis that also apply to the Los Angeles area. Housing is increasingly a speculative investment, in which the exchange (i.e. market) value of real estate investments replaces its use value. In short, the houses people lived in became for-profit housing. As a result, the following housing trends have become much more pronounced in Northern and Southern California:

  • Institutional cash buyers of homes and apartments drove up the cost of housing faster than incomes. As a result, an increasing number of residents have been deprived of their homes and forced into homelessness.
  • Because never-occupied residential units are more valuable than previously rented or owned ones, business buyers often sit on their newly purchased vacant units. They treat them as an appreciating asset, like precious metals. They keep them until they can resell them for a substantial profit, not a source of monthly income through rents and mortgage payments.
  • To gain control of local real estate, corporate investors continue old practices, such as political kickbacks to politicians, better known as philanthropic campaigns and donations. They are also pursuing new practices, particularly the creation of AstroTurf organizations, like the YIMBYs, which push for the deregulation of zoning and environmental laws. These groups are pawning their positions as “progressives,” hoping that they won’t be exposed as deliberately misleading faux-gressives.

This trickery can be seen in California through new bills, like Senate Bills 9 and 10, pushed through the Senate and State Assembly by business Democrats. At the municipal level, it appears in the form of rewritten ordinances on the housing elements of the general plan and the density bonus, both of which generate windfall profits for property owners and investors.

To answer the question of why the pols pursue policies that worsen the current housing crisis, there is a historical lesson. Real estate corruption is ingrained in the DNA of local governments, like the one in Los Angeles. Officials treat their donors like voters and then justify programs that benefit them with never-substantiated but frequently repeated assertions that their housing programs serve the greater good.


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