The Complex Dynamics of Inequality: Social Structure, Spatial Distribution, and Housing Policy

1
The Complex Dynamics of Inequality Social
Structure, Spatial Distribution, and Housing
Policy

• Victoria Basolo, Ph.D., AICP
• Planning, Policy Design
• University of California, Irvine
• May 12, 2006

2
Percent in Poverty
Source SOCDS, Accessed at http//socds.huduser.or
g/index.html
3
Households Living with Conditions (Owners), 1990
2000
Source HUD Special Tabulations of Census 1990,
2000
4
Households Living with Conditions (Renters), 1990
2000
Source HUD Special Tabulations of Census 1990,
2000
5
Median Household Income Median Housing Value,
Percentage Change, 1970-2000 (in constant s)
Source SOCDS, Accessed at http//socds.huduser.or
g/index.html
6
Production Lag in the 1990s
State of California
Source California Department of Finance and U.S.
Census Bureau.
7
Production Lag in the 1990s
Orange County
Source Counting California
8
Percent Whites, Not Hispanic 1990 2000
1990
2000
Source U.S. Census Bureau, 1990 Census, STF 1
9
Percent in Poverty, 1999
Source U.S. Census Bureau, Census 2000, SF1
10
Median Household Income, 1999, by Race/Ethnicity
Source U.S. Census Bureau, Census 2000, SF3
11
Percent of Housing Units Lacking Complete
Plumbing, 2000
Source U.S. Census Bureau, Census 2000 SF 3
12
Homeownership Rate, 2000
Source U.S. Census Bureau, Census 2000, SF1
13
Housing Markets are segmented into submarkets of
quality (cost) 2000
Example County of Orange MHI 1999
58,820 Median Sales Price 1999 280,900
Income
Mortgage Loan1
Housing Sub-Markets
150,000 or gt
498,000 or gt
9.6
High
13.9
100,000 - 149,999
333,000-498,000
14.0
75,000 - 99,999
250,000-333,000

20.7
50,000 - 74,999
165,000-250,000
25,000 - 49,999
Rent (625 - 1,250) 165,000
24.5
17.4
Need subsidy rent (625)2
lt 25,000
Low
Sources U.S. Census Bureau. 2002. Census
2000, STF 1 and 3.
1Assumes 30-year fixed loan at 8.29 (at 30 of
income) 2625/mo. (at 30 of
25,000 income) FMR 2000891
US HUD. Fair Market Rents History.

California Association of Realtors from Counting
California website HSH Associates, Financial
Publishers
14
Purchasing/Renting a Home in Orange County, 2005
Estimated MHI 2004 64,416
Median sales price of existing home in 2005
593,0001 Income needed (at 30 of income)
10,652/mo.
(127,824/yr.) Income needed (at 40 of
income) 7,989/mo.
(95,868/yr.)
1 At 6 with a 10 down payment
2 Two-bedroom unit
Sources American Community Survey, 2004.
Orange
County Report 2006 at http//orangecoastrealestate
.com/news_annual.htm
15
Subsidized Housing Housing
Choice Voucher Program

• Voucher program is the primary strategy to assist
  lower-income people with their housing needs
• Voucher household pays 30 of their income toward
  rent with public subsidy paying the remainder up
  to fair market rent
• Voucher program allows household to move with
  assistance

16
Location of Voucher Holders, 2002 (OC and Santa
Ana)
Voucher Holder
Not to scale
Source Basolo, 2005
17
Major Findings Voucher
Study

• Minority households with vouchers live in worse
  neighborhoods, compared to Non-Hispanic Whites
  with vouchers, even when mobility and rent are
  held constant
• Female-headed households with children using
  voucher assistance live in worse neighborhoods
  than other voucher households

Source Basolo Nguyen, 2006 Basolo, 2006
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Housing Policy

• Federal leadership on housing policy has been
  declining for 35 years, escalating in the last
  few years
• State policy in California has been trying to
  fill the void through legislation and ballot
  measures
• Local governments have a mixed record on
  implementing housing policy funded by state and
  federal governments and, existing research from
  the 1990s indicated that over 50 of the cities
  in a national sample spent no local dollars on
  affordable housing programs1

1 Basolo (1999)
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State-Local Housing Policy

• California state law requires a housing element
  that includes planning for a regional fair share
  of housing at all income levels

In 2002, one-third of the cities were out of
compliance1

• Numerous attempts in the California legislature
  to strengthen regional fair share housing
  provisions have failed

1 Lewis (2003)
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Housing Policy

• California State Law requires local jurisdictions
  to adopt a density bonus (granting developers
  additional units above that allowed by existing
  zoning, if they include a certain percentage of
  affordable housing in their developments)

Again, not all local jurisdictions have complied
with this law

• Many jurisdictions in California, including
  cities in Southern California, such as Los
  Angeles, Anaheim, and San Diego have adopted
  inclusionary housing policy

Continued fight with builders. Biggest
opportunities are in areas with larger tracts of
open land, which appear less likely to adopt IH
policy
21
Housing Policy

• California State Law requires local redevelopment
  agencies to set-aside 20 of their tax increment
  funds for low- and moderate-income housing

Some jurisdictions are sitting on this stockpile
of funds, instead of producing housing
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Housing Policy

• California legislators keep returning to the
  ballot box to approve funds for affordable
  housing development

2002 Prop 46 2.1 billion for housing Bond
issues cause expansion/contraction of
administering agency with loss of experience
among staff unable to plan long
term1 Developers and local jurisdictions compete
for funding, causing geographically uneven
benefits
2006 (Nov.) Bond on ballot includes 2.8 billion
for housing
1Basolo (2006)
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Conclusions

• (Southern) California has a housing crisis
• Housing prices have increased at a much steeper
  rate than household incomes
• The housing crisis disproportionately affects
  minorities and lower- and middle-income
  households
• Market forces, and existing public efforts, are
  not resulting in substantial gains in adequate,
  affordable housing

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Future Policies

• A permanent source of state housing funds
• Land use planning with mandatory fair-share
  housing development
• Regional negotiation among jurisdictions to meet
  fair share requirements (link to tax-sharing)
• Incentives to link housing, jobs, and
  transportation within the region
• Employer-based cooperative solutions