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PLANNING WATCH - If you think homelessness in LA will decline, think again. It is already high, and it will rise for these three reasons:
Reason 1: The policies of the Trump administration will increase economic inequality and poverty in the United States, and these are the main drivers of the housing crisis. While it is difficult to precisely predict the long-term impact of Trump’s Federal government cutbacks, layoffs, executive orders, tariffs, and deportations, in combination they will spike homelessness.
The cost of living – including for housing -- will rise when tariffs on food, metals, energy, and cars from Mexico and Canada kick in. Deporting low-wage workers, who primarily work in construction, agriculture, and restaurants, will also cause inflation. Since the increase in housing prices already exceeds family incomes for most of the US population, greater economic inequality will result in even more homelessness. While this trend has gradually unfolded in the United State over the past 50 years, I expect it to expand over the next four years because of high interest rates and the rising gap between incomes and housing costs. These factors will price more people out of housing.
Reason 2: The scramble for short-term housing after the wildfires in the Pacific Palisades and Altadena will also raise housing costs. Furthermore, the rebuilding of the homes, public infrastructure, and businesses destroyed by the Pacific Palisades fire will place a strain on resources and labor, also forcing prices up.
So far, the response to the wildfires is chaotic. According to the LA Times, Mayor Karen Bass states that she is in charge but considering the vast number of overlapping and competing groups. there is confusion over who precisely oversees the recovery process. The LA Times has identified these players:
- Los Angeles Mayor Karen Bass tapped Steve Soboroff to lead the recovery efforts, then narrowed his responsibility to rebuilding the Pacific Palisades’ commercial center.
- Hagerty Consulting, an Illinois-based company, is in charge of “full project management.”
- Hagerty Consulting reports to former municipal employee Jim Featherstone, who has been rehired into a temporary management position at the City’s Emergency Management Department.
- AECOM, a Dallas-based engineering company, may be in charge of handling billing submitted to the Federal Emergency Management Department.
- The Los Angeles City Council has created an ad hoc wildfire recovery committee, chaired by Councilmember Traci Park.
- Mayor Bass’s previous electoral opponent, shopping-center magnate, Rick Caruso, is creating a foundation comprised of private sector business executives. Their focus is also tracking recovery operations.
- California Governor Gavin Newsom is assembling another group of business executives to monitor the LA area’s reconstruction.
- Miguel Santana, head of the California Community Foundation, has teamed up with businessman Evan Spiegel to track recovery efforts.
- LA Times publisher, Dr. Patrick Soon-Song, is convening his own advisory group to scrutinize recovery efforts.
Reason 3: The LA City Council’s recently adopted the Citywide Housing Incentive Program (CHIPs) ordinance. It, too, will boost homelessness despite claims that its multiple zoning incentives will result in new affordable housing. The 197 page zoning ordinance offers multiple paths for private investors to theoretically build lower-priced dense housing on lots originally zoned for single-family homes.
Unfortunately, this ordinance contains a poison pill. It increases the market value of parcels, even when developers do not build on them. The beneficiaries of these zone changes are property owners since the new ordinance raises the market value of their parcels.
Talk is cheap: Homelessness will increase for the reasons above, despite Presidential promises to bring down housing prices.
(Dick Platkin ([email protected]) is a retired LA city planner, who reports on local planning issues. He is a board member of United Neighborhoods for Los Angeles (UN4LA). Previous columns are available at the CityWatchLA archives.)
