Los Angeles Business Journal

Hitting ’Em Where They Live

OP-ED: L.A.’s lack of affordable housing hinders businesses in drawing from skilled pool of employees. By Raphael Bostic, Robin Hughes and Tony Salazar Monday, May 20, 2013

Los Angeles must not continue down a similar path.

More livable, more profitable

Chief executives must look at the situation and realize the impact affordable housing has on their ability to offer a living wage. They must ignore viewing this crisis and judging its solutions through the typical filter of big-government liberalism versus small-government conservatism. They must consider that making Los Angeles affordable not only makes our city more livable, it makes our businesses more profitable.

As we elect a new mayor, businesses will have a vested interest in how the new mayor – whether the winner is Wendy Greuel or Eric Garcetti – handles affordable housing. Business leaders should partner with the new mayor and council members, as well as affordable housing advocates, to champion programs that support a livable and profitable Los Angeles.

Business must establish a voice on housing. In recent years, the business community has been very vocal on bread-and-butter issues, such as taxes and workers’ compensation. But it has been largely missing in action when it comes to housing issues. This is a mistake.

It has not always been this way. Indeed, Southern California business was one of the first champions of inclusionary zoning – a requirement that a fixed percentage of all newly produced units offer restricted rents that are affordable to working-class families. In the 1970s, many were concerned that a lack of affordable housing was making it increasingly difficult to attract and retain talented workers. In response, with support from business, Irvine and Orange County passed two of the earliest inclusionary zoning ordinances to promote more of a jobs-housing balance and relieve some anti-competitive pressure.

No one is naïve. Los Angeles will never be as affordable as, say, Des Moines, Iowa. After all, Los Angeles is an expensive place to live, in part, because the amenities and climate make it such a desirable place to live.

However, there are limits beyond which a lack of housing affordability is a sign of trouble more than a sign of appeal, especially for business and the general economy. Current trends in rents, which have been growing at 5 percent to 10 percent annually in Los Angeles, make clear that each year we are pricing more and more qualified workers out of the market. We can no longer chalk this up to the cost of living in paradise. It’s bad business.

Raphael Bostic, director of the USC Bedrosian Center on Governance, is a former assistant secretary of the Department of Housing and Urban Development. Robin Hughes, executive director of Abode Communities, and Tony Salazar, principal at McCormick Baron Salazar, are board members of Housing for a Stronger Los Angeles.

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