- The Washington Times - Thursday, January 23, 2003

LOS ANGELES, Jan. 23 (UPI) — A portion of the money raised through a $2 billion bond measure for low-income housing was released ahead of schedule Thursday as a means of keeping California's housing sector stoked.

Gov. Gray Davis' announcement at a housing project in Los Angeles was a follow-up to plans announced in his State of the State speech earlier this month to accelerate the release of funds from Proposition 46, which was approved by the voters last November.

"We're doing everything in our power to get the economy moving and create more affordable housing," Davis in the ceremony at Cesar Chavez Gardens.

Prop 46 was originally aimed at increasing the stock of affordable housing in a state where even the humblest dwellings can command six-figure price tags and rents continue to rise due to a nagging shortage of available units. The measure has, however, given Davis some new ammunition in California's slugfest with a $34.6 billion budget deficit.

The real estate market in California remains vibrant as population growth outpaces housing construction. Home prices in Los Angeles County climbed 17.4 percent last year to a median of $263,000.

The robust times delight realtors, but also mean jobs for construction workers and new sources of property taxes for local governments, and Davis has seized on Prop 46 as a means of not only housing the poor but of stimulating the economy as well.

"By the end of June, $270 million of the funds will have been distributed and 70,000 jobs will have been created," Davis said Thursday. "The entire $2.1 billion Prop 46 bond issue will produce 276,000 new jobs. The funds will provide over 134,000 affordable housing units."

Prop 46 formed a trust fund that non-profit agencies, local governments and private developers were eligible to dip into to pay for homeless shelters and for housing for seniors, low-income families, farm workers and the disabled.

The California Building Industry Association has predicted that 170,000 homes will be built in the state this year, a 3.7-percent increase over last year, although the group said more construction was needed before there the high-priced housing market could satisfy demand and bring prices down.

"Given the need for additional housing for California's growing population, and especially given the economic benefits of new home construction, the forecast for continued growth in housing starts is good news for our industry and for the state as a whole," said CBIA CEO Robert Rivinius. "State policymakers need to do more to encourage housing production and to remove the obstacles that make new homes far more expensive than they have to be."

Supporting the housing industry is also a priority for the Bush administration, which last summer announced ambitious plans to help increase home ownership in the United States by 5.5 million minority households.

"We studied the potential economic benefit of adding 5.5 million first-time minority homebuyers by 2010 and found that it added a staggering $256 billion to the housing market," Housing Secretary Mel Martinez told the National Builders Association convention in Las Vegas Wednesday. "An increase in minority homeownership creates more jobs, increases consumer spending and the economic security of neighborhoods, and most importantly, is a capital engine for working families."

Martinez said HUD's 2004 budget proposal sought $2.2 billion in funds to help states and local governments assist with the financing of land acquisition, new construction, rehabilitation and down payments. The administration also wants to help overhaul land use rules that restrict construction of low-income housing and apartment complexes.

"In spite of overwhelming need, very little new construction of single-family homes occurs today in lower-income neighborhoods," Martinez said. "The most common cause is that the cost of developing such housing in an economically distressed area would exceed the property's market value."


Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide