Dear Gov. Newsom:
The Miracle Mile Residential Association, representing thousands of families in the core of Los Angeles, opposes California Senate Bill 9 and Senate Bill 10.
Over the past decade, the Miracle Mile neighborhood has been a living laboratory for the trickle-down Reaganomics embraced by these bills. The Purple Line subway extension runs down the spine of our neighborhood, and with it, Transit Oriented Development has given developers virtual carte blanche to build, build, build. And they have: Luxury apartment towers, luxury apartment towers, luxury apartment towers. The result of all this construction of market rate housing has been the catastrophic loss of rent stabilized housing and an astronomical increase in both rents and, paradoxically, vacancies.
These are not affordable housing bills. Neither has a single provision that mandates affordable housing. These are lot-splitting bills that allow well-financed developers and Wall Street investors (who already own 67% of all rental properties in Los Angeles County according to a recent report from Strategic Actions for a Just Economy) to purchase single-family parcels and build any form of housing they wish, so long as it is profitable and can fatten their wallets. Individual homeowners are in no position to lot split because lot splitting is not permitted by State law unless a property is owned free and clear, with no mortgage. Eighty percent of all homeowners in California have a mortgage. So, these bills propound a terrible lie: Only well-financed Wall Street firms and cash-in-hand buyers will benefit.
Both bills falsely assert that the invisible hand of the marketplace will somehow create affordable housing. There no evidence for this assertion. In fact, market forces have stripped our city thousands of rent stabilized apartments, a trend reflected in the City of Los Angeles’s own statistics showing that 27,000 rent stabilized apartments have been lost in the last several years. At the same time, rents have skyrocketed: Newly constructed apartments rent anywhere from $4,000 to $6,000 for a one or two bedroom unit. These prices are between 50% and 100% higher than the rents in stabilized units. These bills will only accelerate this trend since they require zero affordability set-sides. What will be built is what has been going up over the last decade, luxury, market-rate housing. Yet, because these new buildings represent monetary investments and not home ownership, they often sit empty; again, City statistics reveal vacancy rates of between 15% and 40% in these newly constructed apartment buildings.
By setting loose even greater market forces, these bills will deepen the affordability crisis. They will also strip away local control, eviscerate all environmental rules, increase global warming through the decimation of the urban canopy, and because they require no infrastructure improvements, lead to even further breakdowns in our already ancient and over-stressed water, sewage, and electrical services.
The answer to the affordability crisis is not more market-rate housing. The answer is to use the state’s ample surplus, and to reinstate redevelopment agencies, and start building 100% affordable housing. Since California stopped the flow of $1.2 billion annually to redevelopment agencies, no affordable housing has been built. It is estimated that in ten years, the state has failed to build nearly 100,000 such units. Handing every single-family lot in the state over to Wall Street developers will not cure this self-inflicted wound. Reinstating direct state funding for 100 percent affordable housing will.
Veto SB 9 and SB 10, should these bills arrive on your desk. Tell the legislature to directly fund affordable housing. Tell the legislature to stop blaming homeowners – of every race, creed, and color – who’ve worked all their lives to afford their homes. Tell the legislature that the housing crisis was caused by Wall Street, not Main Street, and it will not go away just because more market-rate homes are built by deep-pocket investors. Tell the legislature that these bills will strip what little wealth most Californians have, and create an even greater gulf between the haves and the have-nots. Tell the legislature, NO!
Greg Goldin
President, Miracle Mile Residential Association
Miracle Mile Residential Association 