Southern California is nearly 1 million homes short for low-income residents, report says

Even after a near doubling of housing funds, Southern California is still nearly 1 million homes short for low-income residents, new housing data shows.

State and federal dollars for homebuilding and affordable housing preservation rose to $6 billion in the fiscal year ending last September, up from $3.2 billion the year before, according to California Housing Partnership, an affordable housing advocacy group.

Nevertheless, the shortfall of homes affordable to low-income residents increased to almost 925,000 homes in 2022, up from 885,000 a year earlier.

SEE MORE: Why homebuyers won’t get a break in 2023

The reason, said housing partnership CEO Matt Schwartz, is homebuilding costs are up between 30-50% over the past five years.

“The cost to build is going through the roof,” Schwartz said. “The money that’s available has gone less far, and we haven’t made a dent.”

As a result, the affordable housing gap “really hasn’t budged” in the past few years. ”And that’s disappointing, given the amount of pandemic funding.”

The new housing needs reports show also that tenants need to earn two to three times the minimum wage to afford the average apartment rent.

RELATED: Most cities still falling behind affordable housing mandate

More than half of low-income renters in Southern California are paying more for housing than they can afford.

Fifty-two percent of low-income households in Los Angeles County are “cost-burdened,” meaning they spend more than 30% of their monthly income on rent. Economists say housing costs should be less than 30% of a household’s gross income to be affordable.

Cost-burden rates ranged from 55% to 58% in Ventura and Orange counties, and from 63-70% in San Diego, Riverside and San Bernardino counties.

At least one-fourth of the region’s middle-income residents are cost-burdened. And in Riverside County, half of middle-income households pay more than they can afford in rent.

And roughly half of the region’s “very low-income” residents are spending at least 50% of their monthly income on rent, leaving little cash available for other needs like food, utilities, medical care or transportation.

“Low-income renters continue to struggle with ever-increasing housing costs,” said the Southern California Association of NonProfit Housing, another affordable housing group. “Hundreds of thousands of Southern California residents are being left behind as the cost of living soars further out of reach, … exacerbating the regional homelessness crisis.”

The housing partnership reports show that while the region’s homeless population hovers around 90,000, the six counties have a combined total of only 59,000 homeless beds.

HOUSING TRENDS: Rent slowdown likely for Southern California apartments

The California Housing Partnership is a statewide nonprofit created by the state Legislature to foster affordable housing. It releases annual updates to its housing needs report every May.

In 2021, a housing partnership study said the state could meet all its affordable housing needs by spending $18 billion a year for 10 years.

It could come up with that money by setting aside 5% of the general fund for affordable housing production — similar to the Proposition 98 funding guarantee for public schools.

Schwartz said affordable housing needs to be treated like infrastructure, with long-term planning and funding. California doesn’t do that, he said.

State affordable housing levels have “never been enough to solve the problem,” Schwartz said. “It’s just enough to keep it from getting worse.”

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