Here is a 'hot off the presses' report on California housing affordablility from the State Department of Housing and Community Development. While I need to study the report further - there are some stark figures. The sub-prime crisis is (rightfully so) getting a lot of press right now. I've been watching the trends in East Palo Alto. There are currently about 130 houses on the market in EPA - in about 2.5 square miles. A significant number of them are bank owned (about 1/3). As we've investigated some properties, there are individuals who are purchasing them with cash. This tells me that investors are jumping on the opportunities. The outcome, I fear, will be played out with affordability issues in the coming years. I think, and this is soley my opinion, that we are seeing a temporary dip in housing prices that will pave the way for accelerated gentrification of East Palo Alto. The report states:
"Over four out of ten of all California households are renters, and renters face the greatest affordability challenges. In 1997, nearly a quarter of the renter households in the State’s metropolitan areas (1 million out of 4.2 million households) spent more than half of their income on rent. HUD (Census 2000) data indicates that 35 percent of California households and 40 percent of renters spend more than 30 percent of their income on housing.17 In 2002, almost half a million of California’s working families were “officially” poor with incomes below the federal poverty level (FPL). Many more families (nearly 1.4 million) with incomes above the FPL, up to twice the FPL, still fell short of earning an income level to provide an adequate standard of living."Similarly, in EPA rents are rising at alarming rates, further putting the squeeze on locals in desperate need of affordable housing. In December the Palo Alto Daily News began reporting on the covert manner Pagemill Properties began buying up EPA rental units and raising rents. Our city council recently passed some rent control mearures, but the legal battle is ensuing. The article states:
"Roughly 200 residents packed the city council chambers Wednesday night to protest the increases, set to take effect Feb. 1, before the rent stabilization board debate whose members oversee rent control in the city. Many said they are on fixed incomes and were outraged over paying more for apartments that are plagued by cockroaches, busted door frames and leaky ceilings.What is our response? While we're considering how to respond, I believe NCUD needs to continue to work on multiple fronts including getting people into the mainstream banking system, improving credit scores, education and advocy and - on a longer term strategy helping residents increase their earning potentail. I have much more thinking and reasearch to do.
Of the estimated 1,600 rental units on the city's west side that Pagemill Properties has purchased in the past 18 months, increases went out to every eligible tenant. The firm's development director, Jim Thompson, didn't know the exact number, but Community Legal Services of East Palo Alto estimates it was several hundred. Attorneys for the agency also said the hikes are illegal.
"It's based on erroneous calculations that are being used to make illegal rent increases," attorney Jeanne Merino said."
Q. What do you think? How can we increase affordable housing and the general quality of life for our lower income residents?