OpEd: SB 79 Would Help With Housing Costs

Every morning, over 180,000 workers in the Inland Empire endure long commutes because they can’t afford housing near their jobs in L.A. County.

This is more than a personal hardship. When workers can’t afford to live near their jobs, businesses lose talent to other regions. And eventually, businesses themselves move. 

Over 100 corporate headquarters have relocated out of Los Angeles since 2018, many of them to Texas. L.A. leaders can continue to watch our economy bleed talent and businesses – or support more housing near transit and jobs.

Housing costs account for 77.6% of the median income in L.A. County, compared to 39.6% in Austin. These costs have become the biggest threat to staying competitive, as they drive away the skilled workers who power innovation and growth. This explains why L.A. County considers a family of four earning $111,000 annually as “low income” – a classification that is regarded as middle class elsewhere. Because workers cannot afford housing near their workplaces, they often relocate to distant areas, resulting in super-commutes that hinder productivity and increase turnover costs. We see this in the data: Austin’s talent pool grows by 4.1% yearly, while ours shrinks by 0.2%.

Companies respond with costly Band-Aids that worsen our competitive position. USC research found that 75% of employers cite housing costs affecting retention, so companies must continuously raise wages beyond profitable margins. These expensive fixes increase operating costs without solving the underlying problem.

The state legislature is seeking to address this crisis with new legislation – Senate Bill 79 by Sen. Scott Wiener – that will legalize more homes within half a mile of L.A. Metro stations, giving more workers the option to use public transit, saving time and money while increasing the labor pool for local businesses.

It’s a money saver

In addition to the direct benefits, businesses also thrive when their employees’ housing is more affordable, and closer to work; this results in lower turnover and absenteeism when workers have shorter, easier commutes, reducing job stress and offering a greater sense of attachment to their workplace. One company saved $50 million over 20 years in capital and operating costs because it had a reduced need for parking facilities, once it relocated its office near transit.

Because households will save money, they will also have more purchasing power to spend on local businesses. Households near transit can save approximately $13,000 annually on transportation costs. That’s thousands of dollars that can be spent supporting local economic activity, from eating out and furniture purchases to entertainment tickets and more.

Transit is expanding

Major transit expansions are already funded and arriving soon. The D Line is expected to reach Century City by 2025-2026 and Westwood by 2027, serving areas where employers struggle most with their employees’ housing costs. One leading talent agency, CAA, relocated its office in Century City for better access to the Metro station, and Fox Corp. invested $1.5 billion in its expansion in Century City. Yet without SB 79, these transit investments will have little benefit – jobs are available near transit, but homes are not, which means Angelenos don’t have access to that crucial connection from home to work.

This is more than just housing policy; it is an economic development strategy. This legislation tackles the core problem driving business relocations by enabling construction near transit and jobs where market demand exists. SB 79 provides the policy to rebuild a competitive L.A. and stop losing our edge to Texas.  

This is a critical issue for the entire state. The partners and voters that make up the New California Coalition that I run designated rapid housing production as one of the “core four” issues that the legislature and governor need to address to keep California the best place to live and work in the world.

State legislators must pass SB 79 or risk economic decline as other metropolitan areas permanently capture the next generation of businesses and workers. The choice is ours – but only for now.

Tracy Hernandez is the chief executive of the New California Coalition, an advocacy network of California organizations and businesses pushing for “common sense” solutions to homelessness, environmental issues and the economy.