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

Percent in Poverty Source: SOCDS, Accessed at

Households Living with Conditions (Owners), 1990 & 2000 Source: HUD Special Tabulations of Census 1990, 2000

Households Living with Conditions (Renters), 1990 & 2000 Source: HUD Special Tabulations of Census 1990, 2000

Median Household Income & Median Housing Value, Percentage Change, (in constant $s) Source: SOCDS, Accessed at

Production Lag in the 1990s Source: California Department of Finance and U.S. Census Bureau. State of California 2003

Production Lag in the 1990s Orange County Source: Counting California

Source: U.S. Census Bureau, 1990 Census, STF 1 Percent Whites, Not Hispanic 1990 & 2000 N Source: U.S. Census Bureau, Census 2000, SF 1

N Percent in Poverty, 1999 Source: U.S. Census Bureau, Census 2000, SF1

Median Household Income, 1999, by Race/Ethnicity Source: U.S. Census Bureau, Census 2000, SF3

N Percent of Housing Units Lacking Complete Plumbing, 2000 N Source: U.S. Census Bureau, Census 2000 SF 3

N Homeownership Rate, 2000 Source: U.S. Census Bureau, Census 2000, SF1

Housing Markets are segmented into submarkets of quality (cost): 2000 IncomeMortgage Loan 1 $150,000 or >$498,000 or > $ Housing Sub-Markets 17.4% 20.7% 9.6% Need subsidy; rent ($625) 2 < $25,000 $25,000 - $49,999Rent ($625 - $1,250); ~$165,000 $50,000 - $74, % $165,000-$250, % $75,000 - $99,999$250,000-$333,000 High Low Sources: U.S. Census Bureau Census 2000, STF 1 and 3. 1 Assumes 30-year fixed loan at 8.29% (at 30% of income) 2 $625/mo. (at 30% of $25,000 income); FMR 2000=$891 Example: County of Orange MHI 1999 = $58,820 Median Sales Price 1999 = $280, % $100,000 - $149,999 US HUD. Fair Market Rents History. California Association of Realtors from Counting California website HSH Associates, Financial Publishers $333,000-$498,000

Purchasing/Renting a Home in Orange County, 2005 Median sales price of existing home in 2005: $593,000 1 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 Fair Market Rent in 2005: $1,392 2 Income needed (annual): $55,680 $26.77/hr. Housing Wage (40-hr wk): Estimated MHI 2004 = $64,416 Sources: American Community Survey, Orange County Report 2006 at

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

Not to scale Location of Voucher Holders, 2002 (OC and Santa Ana) Voucher Holder Source: Basolo, 2005

 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 Major Findings Voucher Study Source: Basolo & Nguyen, 2006; Basolo, 2006

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 programs 1 1 Basolo (1999)

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 compliance 1 Numerous attempts in the California legislature to strengthen regional fair share housing provisions have failed 1 Lewis (2003)

Housing Policy Many jurisdictions in California, including cities in Southern California, such as Los Angeles, Anaheim, and San Diego have adopted inclusionary 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 Continued fight with builders. Biggest opportunities are in areas with larger tracts of open land, which appear less likely to adopt IH policy

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

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 term 1 Developers and local jurisdictions compete for funding, causing geographically uneven benefits 2006 (Nov.) Bond on ballot includes $2.8 billion for housing 1 Basolo (2006)

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

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