"To qualify as a 100% affordable housing project under the city of Los Angeles’ streamlined treatment, a studio can go for roughly $1,800.

Compare that to a traditional publicly subsidized project which could charge as little at $650 for the same unit." ​
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- Cal Matters, Los Angeles' One Weird Trick to Build Affordable Housing at No Public Cost

June 22, 2024
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no GUARANTEE subsidies = not affordable

​We thought "affordable" housing meant government-subsidized public housing or housing that was paid for with Section 8 vouchers. Rent for ED1 "affordable" housing isn't subsidized and the voucher program is voluntary. 
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The federal government (HUD) gives money to states for affordable housing in a few ways, two of which are: creating public housing facilities and vouchers. Many people think the higher prices for 100% affordable houses (it can be $1766 for a 167 square foot studio) are okay because...

“Unhoused people will just use vouchers for ED1 units.”

• In 2022, less than 50% of vouchers given were used before they expired -ABC News 7
• Many landlords won’t take them. They legally can’t turn someone away because of the voucher, but landlords often just say it’s for other reasons. (Someone on Section 8 recently shared with us that while they were looking for home to use their voucher, a landlord on the phone blatantly said "We don't take vouchers." It was in reading this bullet point that they learned it is illegal for a landlord to say that. No one had ever told them this before.)
• It’s voluntary for landlords to participate in the Section 8 voucher program.
• MAYOR in 2023: ‘We have a couple of thousand vouchers that people could use, but we need landlords to be willing to take those vouchers.’ -Mayor Karen Bass
• ABC News 7 in response to the Mayor's quote: “And it’s not just a couple thousand. According to the latest federal data, Los Angeles had roughly 9,000 Section 8 vouchers that went unused last year.”
  • HUD 2022 Data, ABC News- Number of HUD-funded HACLA Vacancies by Program Type: 8.8K Housing Choice Vouchers (Section 8) vs 255 Public Housing
• ABC News 7: “Section 8 can be more of a Catch 22. To get a Section 8 voucher, you literally have to win a lottery just to move forward in the program. The last time the city opened up a Section 8 voucher list, more than 200,000 people applied. Now, if you’re one of the lucky thirty-or-so-thousand (30,000) picked, you get moved to a waiting list. And after potentially years of waiting, you can end up with a section 8 voucher to finally get you into a home. But, here in Los Angeles, a study found that less than half of those who got vouchers were able to find a lease before the vouchers expired.”
• Vouchers are only for units that are at Fair Market rents or lower. 

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WHAT IS AFFORDABLE?

• ​What is Affordable? According to state and federal guidelines, generally, rent must be less than 30% of income to be "affordable". 
• The words "100%" are redefined. ED1 housing is supposed to be "100% Affordable" housing, which sounds like it means all units are affordable. But in 2019, the Governor signed an Assembly Bill 1763, written by Chiu, which redefined the word "100%" to mean 80% of an "100% affordable" building needs to be Low Income and 20% of an "100% affordable" building can be Moderate Income. Moderate Income is higher than Low Income. Also, in this definition, there is no requirement for Very Low Income or Extremely Low Income units. So it is misleading to say "100% affordable" when it's really 80% Low Income housing. One might think that it's "80% affordable," but...
• The word "affordable" is also redefined. ​To simplify it: the average annual income for a single person in Los Angeles is around $98,000. It's high because wealthier neighborhoods like Bel Air, Brentwood, and Pacific Palisades are included in the average. The average income for Council District 13 is $36,000. Our city council person, Hugo Soto-Martinez, shared in a June 24th newsletter that the average laborer in the LA Metro area earns $17,000 yearly. Since the average income for the whole city is $98,000, a person is "low income" if they make 80% of the average annual income. This means a person who makes around $70,000 is "Low Income" (see chart below). 
• So when it is said that ED1 buildings are "100% affordable," it means 80% of the units are for people who make up to $70,650 (as a single person).
• Because of the Assembly Bill (above), the other 20% of the units are "Moderate Income" households, which make around $80,000 per year (as a single person).​​ 
• 94% of units being built under ED1 are "Low Income" or "Moderate Income" according to data from ATC Research from June 18, 2024, meaning for people who earn about $70,000 or $80,000 or less annually. 
• There may also be units that are "Very Low Income" ($48,000) or "Extremely Low Income" ($28,000), but ED1 doesn't require landlords to include them.
• ATC Research shows that in ED1 buildings, 4.8% of units are "Very Low Income" and 1.7% are "Extremely Low." 
• ​Again, the average income for Council District 13 is $36,000. Also, eight of the fifteen council districts in LA have area median incomes that are less than $70,000 according to the 2020 LA Census.
• Affordable for the Unhoused? The first sentence of ED1 says it's to "aid in swiftly sheltering people who are unhoused."¹ The state of emergency that is giving the mayor extra power to make ED1 is based on the unhoused. The public support for the mayor calling a state of emergency revolves around the unhoused. But most unhoused people don't earn the annual incomes labeled "Low- $70,650," "Very Low- $48,000" or "Extremely Low- $28,000." According to a University of California San Francisco study of nearly 3,200 unhoused people in California, they were making between $11,000 and $16,000 when they became homeless. (AP News Breakdown) ED1 puts the unhoused in competition with people who make higher incomes and without a requirement for landlords to take vouchers, it seems like ED1 "100% affordable" housing will not "aid in swiftly sheltering people who are unhoused."​

Who is Low Income in LA?
​"If your household earns less than the amount shown for a household of your size, you qualify as Lower Income"
-Los Angeles Housing Department

LAHD

The following are the amounts of each type of unit being built under ED1.
Extremely Low: about $28,000 / year or less (not required)
Very Low: about $48,000 / year or less (not required)
Low: about $70,000 / year or less
​Moderate: about $80,000 / year or less

Image from ATC Research

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​Under ED1, 100% affordable is defined as a project with 5+ units where: all units are at 80% of Area Median Income (AMI) or lower (HUD rent levels); OR units are mixed-income, with up to 20% of units at 120% AMI (HCD rent levels), but a balance at 80% or lower. The 2023 AMI for LA County is $98,200.*

 (ATC Research)

FAIR MARKET RENT

This term may be useful when learning about ED1 and vouchers.
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CALIFORNIA

National Low Income Housing Coalition, California 2024, https://nlihc.org/oor/state/ca

• What is Fair Market Rent? The federal government gives Fair-Market Rent numbers for LA. "Fair market rents, or FMRs, are statistics developed by HUD to determine payments for housing assistance programs like the Section 8 housing choice voucher program... FMRs differ by local area, and are updated on an annual basis... The HUD Section 8 program [vouchers] pays rents for low-income households directly to private landlords. In most cases, the local housing authority, funded by HUD, will pay about 70% of a tenant’s rent, while the tenant will pay the other 30%. Fair Market Rents generally determine the maximum rent that a Section 8 landlord will be allowed to charge its residents. However, it is only a ballpark estimate, as landlords are given some flexibility to charge more or less based on the number of bedrooms and bathrooms in a unit, as well as based on a unit's overall square footage." (Janover HUD Loans)
  
  
• Our Council District 13 Councilmember's website shares that the federal Fair-Market price for a one-bedroom in Los Angeles is $1747. Please note that Market-Rate one-bedrooms are much higher. The average for a Market-Rate one-bedroom is $2700 per month.​

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Updates:  June 24th statistic, AP News Breakdown

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