Recently sworn in California Gov. Gavin Newsom has made tackling the state’s housing crunch, a central goal of his administration.
In his first budget, released last month, he proposed committing $1.25 billion to increase the amount of affordable housing in the state: $500 million for expanding the state’s Mixed-Income Loan Program; $500 million as grants to cities that meet preset goals for housing construction; and $250 million to help local governments with technical issues like rezoning and permitting.
That’s a paltry amount, however, to address the systemic issue. Much like the city and county of Los Angeles’ commitments to housing the region’s homeless population, the issue of affordable housing will take more than just tax dollars and politicians’ words to remediate.
One notable item from Newsom’s affordable housing push was his callout of Silicon Valley companies during a roundtable in San Jose last month, exhorting the tech industry titans to step in and provide low-interest loans to developers building housing for Californians with lower incomes.
It’s a challenge the Los Angeles community of business should heed as well, if not out of a sense of community then out of self-preservation.
A Quinnipiac poll released this month found that 45 percent of Los Angeles County residents said they can’t afford to live in California (61 percent of young Californians said the same). Seventy-six percent of L.A. County residents said the state has a housing crisis.
And employers are seeing the impacts of the high cost of housing, particularly when it comes to employee recruitment and retention.
According to a study released in April 2017 by the Los Angeles Business Council Institute, of the 14 major L.A. employers surveyed, 60 percent said the city’s high cost of living has made employee retention a challenge. Nearly three-quarters of respondents also indicated they believed L.A.’s housing costs had hurt their ability to keep employees.
Ten of the employers also said housing costs had prevented them from hiring new employees.
While directives (and funding) from the state government are important in addressing this crisis, so is local involvement, both from government and business.
Some companies are taking action. In its 2018 study, the Los Angeles Business Council Institute pointed to Santa Monica-based Snap Inc. as an example. It said the company “has leased real estate in Venice Beach to house employees who would otherwise likely struggle to afford housing in the area.”
More of our local companies should join in searching for solutions. If we don’t address the affordability crisis now, workers will continue to leave the state, eventually forcing businesses to relocate to attract staff.
California’s successes have long been a model for the rest of the nation. Now is the time to become an example of what’s possible when a community comes together to solve a crisis that, if left to fester, could put a damper on our booming economy.
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