The unintended consequences
By James Preston Allen, Publisher
I ran into Thom and Jerry at the bank recently — not the cartoon characters, both a local realtor and a businessman. Both wanted to know what was happening with the Rancho San Pedro public housing development, the homeless crisis and as they say, “What can we do about how bad it’s gotten?” Both blame “government” for how long it’s taking to build anything and both have the same scapegoat for failing to solve the homeless crisis. I understand their angst. Here’s what I told them.
The current move to gentrify San Pedro (or any other part of Los Angeles) is a double-edged sword. Yes, it creates some jobs in the building trades, but most of these workers aren’t going to be able to afford living in the places they build. The rather slow rush into neighborhoods in the Harbor Area has spawned a speculation bubble that’s been raising all real estate prices, which only now seem to have hit a ceiling. The average worker can’t afford to buy a modest condo in this market and rising rents have forced out many tenants. Some move to even cheaper areas and some move into their cars — like the guy who lives in his across the street from me or the people living near the post office on Beacon Street.
Bobby Nizich, the lawyer with an office above the Beacon Street post office, calls them “Urban Campers,” while Doug Epperhart, Coastal San Pedro Neighborhood Council president, has adopted the term “unsheltered neighbors.” Both are accurate. Gentrification is not a cure for homelessness, as it’s kind of a curse for those who can’t afford even a modest room down at the Hotel Royal that is now asking $1,300 a month for what use to go for $600.
To an extent, Thom and Jerry are right to blame City Hall. The City of Los Angeles can’t get out of it’s own way fast enough to address the problem of too little housing or the homeless crisis. In fact, the response to the Malibu firestorm and the sheltering of those victims has been much faster than the response to the “crisis” of our chronically unsheltered neighbors. I mean seriously, if the homeless crisis were really a crisis, the mayor would have declared a state of emergency, Gov. Jerry Brown or any prior administration, would have brought in the National Guard with tents and sanitation facilities, and the County Supervisors would have set up 20 to 30 refugee type camps on public property all across Los Angeles County. That would be an emergency response — unlike what we’re seeing now.
A crisis would necessitate an all-hands-on-deck response like what we see with the wildfires, but what the city doesn’t get is that the whole gentrification cycle will not work unless we take care of the most needy first! This is because the speculation and development model is going to displace as many low-income people as it will create units for those who can afford them.
One of the pieces to this puzzle that is little noticed is that in places like Central San Pedro, the current stats show that some 84 percent of the residents are renters. Home ownership is way below what would be “average” but this is the trend. We are living in a town of people who aren’t invested in ownership and mostly feel as though they don’t have a “real” stake in the consequences or a voice in community affairs. You can see this by who shows up at the usual Economic Affairs meetings at the San Pedro Chamber of Commerce. There’s very little diversity.
What we have seen over the past 30 years is a flat line on wages in the non-union private sector, which lost 30,000 middle class jobs locally during the Reagan Administration. Those jobs were exported and never came back to our shores. The rise of global trade at our twin harbors has only benefited a few unionized workers while many others — like the port truckers and others without union contracts — have been left behind. The gig economy has only served to provide people with a second or third jobs to pay their rent. Forget getting qualified for a mortgage to buy a condo or house.
Let’s not forget home ownership is that critical step to acquiring that ever-elusive “American Dream” and upward social mobility. The demise of the middle class and the growing homeless crisis can be traced to the decline in homeownership, income stagnation and the social dislocation that comes with gentrification.
The cure for this mess has to be a focus on creating home ownership opportunities during the development cycle. There’s got to be a mix of affordable and low income housing along with market rate housing. This can be done with tax breaks, bridge loans and incentives for developers that look a lot like the plan for the Rancho San Pedro housing project, but that’s going to take at least a decade. The homeless crisis can’t wait.
If we as a community, a city and nation do not address the immediacy of the unsheltered problem now, all of the great ideas of redeveloping the L.A. waterfront will fall flat. Building ever-higher buildings in the urban core of places like San Pedro and pretending that development projects will somehow solve housing affordability and homelessness is close to delusional. Housing and homelessness have to be addressed simultaneously as one complex interdependent problem that we actually are capable of solving.
But for right now give me two acres of public land and 200 Red Cross tents and sanitation facilities and Mr. Nizich’s Urban Campers would be off the sidewalk, and Thom and Jerry could go back to telling me how much they like Donald Trump’s tax plan and trade tariffs.