Tag: Proposition HHH

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Los Angeles’s Prop HHH Funding for homeless facilities meets NIMBYs

The NYT has learned that “For Homeless Advocates, a Discouraging Lesson in Los Angeles: Money is Not Enough.” The story describes how an LA nonprofit is struggling to build a 49-unit housing development for the homeless in Boyle Heights neighborhood, and the main funding source is a Proposition HHH grant—a program we first wrote about back in August.

As we wrote then, Prop HHH authorizes $1.2 billion for homeless facilities. Although the NYT reporter doesn’t seem to know it, Prop HHH funding is not limited to housing; it can be used for any facility—including medical clinics or supportive services—that can be construed to “benefit persons experiencing homelessness, chronic homelessness, or at risk of homelessness.” The key phrase is “at risk of homelessness,” since, given LA’s astronomical rents and relatively low incomes, Prop HHH grants could be used for almost anything. Remember that, adjusted for the cost of living, California has the highest poverty rate in the country. Overall, the proposed Lorena Plaza illustrates how how challenging it is for nonprofits to get facility grants—and then actually get the facility built.

LA and California as a whole are progressive Democratic Party strongholds that superficially care about affordable housing. While most politicians and voters support expanded human services initiatives like Prop HHH (which is great news for grant writers), the Democratic LA City Councilman Jose Huizar, who represents Boyle Heights, killed Lorena Plaza.

In other words, the City that giveth with one hand taketh away with the other. Councilman Huizar would probably support a homeless housing development in the distant, white and affluent Pacific Palisades neighborhood, but he’s not so much interested in one in his low-income and Latino district. We’re seeing a specific instance of the long-standing NIMBY (Not in My Back Yard) phenomenon.

Even though the City is trying to give away huge Prop HHH grants and Boyle Heights residents likely voted overwhelmingly for Prop HHH, they voted in the abstract for “more funding,” which feels different than looking at concrete plans to build a facility down the street from their home, business, school, church, whatever. As anyone who’s worked in affordable housing development, and especially housing for potentially less than angelic residents, knows that, no matter the income level or ethnicity of the neighborhood, residents with metaphoric pitchforks and torches will oppose a project like Lorena Plaza. In Lorena Plaza, 50% of the units are or were to be for homeless folks with severe mental illness. All politics is local and apparently Councilman Huizar opted for re-election over a place for the most vulnerable people in our society to sleep at night.

At Jake’s recommendation, I’m currently reading Seth Stephens-Davidowitz’s excellent Everybody Lies: Big Data, New Data, and What the Internet Can Tell Us About Who We Really Are. The author uses Google searches and other big data sources to illustrate that much common wisdom is wrong. It turns out that people often lie about things in the abstract (e.g., “I support housing for the homeless” to a pollster), while at the same time googling “how to stop a housing project,” when one is proposed down the street.

All this doesn’t mean that some version of Plaza Lorena won’t get built or that the City won’t eventually award the $1.2 billion in Prop HHH grants. It just means that nonprofits have to be prepared for the struggle. Legal struggles also increase costs, and, in the aggregate, those legal costs help explain why California has the highest poverty rate and affordable housing crisis in the nation. Legal and political struggles also mean at that much of Prop HHH funding will actually be used for non-housing projects, like primary care clinics, which are much easier to “sell” to NIMBYs who have been legally empowered to block any change, anywhere.

Whether an LA nonprofit is proposing a project like Lorena Plaza or a clinic, it’s important for the nonprofit seeking a Prop HHH or any other facility grant to understand that the proposed site can usually be easily changed after the grant award. The funder doesn’t want the grant to be returned. The leverage shifts from the funder to the grantee after funding.

We advise our clients seeking facility grants to pick a site that can be made to seem easy to build for purposes of the proposal but also to be ready to swap the original site for a new site if something goes wrong with the original site, including an attack of the NIMBY Zombies. We see this site-swap frequently in facility grants from HUD, HRSA, etc. YouthBuild projects, for example, often feature site switching. In grant writing, it’s always critical to remember the difference between the proposal world and the real world. In the proposal world everything with the site will work out perfectly and smoothly. In the real world… well, as you can see from the Plaza Lorena example, things rarely works out smoothly.

And, in other LA housing news, “Up to 600,000 expected to apply when L.A. reopens Section 8 housing list this month after 13 years.” Section 8 is a fine program, but it cannot overcome parochial zoning that restricts the supply of housing. Until LA overcomes zoning that limits livable space by mandating height limits, lot setbacks, and parking minimums, it won’t and can’t achieve anything like affordable housing goals.

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L.A. digs a hole more slowly than economics fills it back in: The Proposition HHH Facilities Program RFP

As newsletter subscribers know, last week the City of Los Angeles released the “Proposition HHH Facilities Program FY 2017-18 Request for Proposals for the FY 2018-19 Bond Issuance.” That program is an excellent opportunity for nonprofit and public agencies looking for capital funding. There was $85 million available in 2016, and this year there may be more. Even better, grants to $3.5M are up for grabs.

Prop HHH funding is a great opportunity for nonprofits involved in homeless services, since it provides capital funding for facilities, which don’t have to including housing units. As we’ve written before, facility grants are usually much harder to get than grants for the services provided at the facility. Also, the RFP states:

The Prop HHH Facilities Program is intended to fund the acquisition and/or improvement of real property for facilities (hereinafter referred to as “project(s)”) that provide services or goods to, or otherwise benefit, persons experiencing homelessness, chronic homelessness, or at risk of homelessness (hereinafter referred to as “homeless”).

The key phrase is “at risk of homelessness,” which makes almost any LA human services provider potentially eligible for a Prop HHH grant, not just traditional homeless services providers. This is because clients of most L.A. human providers are well below 200% of the Federal Poverty Guidelines (FPG). Given the very high rents in LA, this means they likely pay well over the federal/state/local standard of housing affordability of 30% on gross income for housing costs (e.g., rent, utilities, etc.).

From a grant writing point of view, this means they’re pretty much all all at risk of homelessness. Whether obvious or not, many of these clients are, have been, or will be episodically homeless (e.g., living in cars, motels, family members, shelters, etc.).

From a larger perspective, though, Prop HHH is also like digging a tiny hole in the housing affordability problem, while the rest of L.A.’s rules and regulations act as a dump truck filling that hole back in. You may ask what that means. One good explanation comes from Reddit, of all places, as this architect explains why virtually all new housing units in L.A. are “luxury” units. As he says, “EVERYTHING built in LA is defined by parking, whether we like it or not.” Moreover:

In making our assessments as to required space for parking, the typical calculation is that each full parking stall will require 375sf of space (after considering not just the space itself but also the required drive aisle, egress, out of the structure, etc. So that 800sf apartment is actually 1175 sf to build. [. . .]

So not only is 32% of your apartment just for your car and otherwise useless, but its also by far the most expensive part of that apartment to build.

It’s not possible to build enough housing for middle-income people in L.A., let alone low-income or homeless people, because of parking and outdoor space requirements. The City of L.A. is doing useful work for a handful of nonprofits with Prop HHH, but unless the City changes its parking requirements, there isn’t much real change that’s going to happen. The high cost of free parking is real. In the proposal world, though, none of these problems and trade-offs exist. In the real world, however, a couple hundred million dollars to build a couple hundred units (or even a thousand units) isn’t going to do much for homelessness in a city of four million and a metropolitan statistical area (MSA) of twelve million. In 1970, L.A. was zoned for ten million people. Today, with our vastly inferior technology, it’s zoned for four million and change. Until the city fixes zoning, it’s not going to fix homelessness.

Basically, it’s impossible to build enough housing for people in L.A. because it costs so much to also build housing for cars.* As grant writers, however, we love to see new programs like Prop HHH that’ll provide “walkin’ around money” for LA nonprofits.

Unsurprisingly, too, research demonstrates that building more housing overall results in fewer homeless persons. We have the technologies needed to dramatically reduce homelessness, but as a society we’ve decided not to allow them to be used.

* Seattle is a little better off, but it still has many perverse zoning issues, which I wrote about comprehensively in “Do millennials have a future in Seattle? Do millennials have a future in any superstar cities?” The short version of that highly detailed article is that many cities severely restrict housing supplies; in the face of rising demand, this raises the cost of housing.