Last Gasp
Measure H is meant to increase affordable housing and real estate ownership amongst the middle-class. But the gulf between haves and have-nots is widening.
Los Angeles City Beat - October 26, 2006
By Mindy Farabee

To understand the problem, “you have to start with some history,” says City Council President Eric Garcetti. “Los Angeles has traditionally been a libertarian town; we had a government constructed to be out of people’s lives. When our public transit system fell apart that was okay, because everyone had a car. When we began running out of public park space, that was okay because everyone had a backyard. It’s changing, but the social contract here really centers around social services, not social justice. This city was really defined by … business more than government.”

Lately, though, Los Angeles seems to be defined by a set of unfortunate statistics. For instance, in June, the Brookings Institute issued a report naming it the country’s most economically segregated city. In September, the California Budget Project announced that since 1979 the average L.A. County resident’s earnings have declined 6 percent overall, and lag 12 percent behind Californians in general, while at the same time our county has manufactured the state’s largest percentage of millionaires – more than doubling the ranks of its super-wealthy just between 1998 and 2003.

The problem, of course, is not unique to Los Angeles. America’s middle class has been eroding since the late 1970s, when a plan for de-industrialization coupled with big business’s increasingly hostile attitude toward labor both snowballed with federal policies favoring job outsourcing and offshore corporate headquarters.

But in Los Angeles, the numbers are particularly startling. Only 12 percent of households here can afford a median-priced home, meaning “if homeownership is the measure of being middle class, as it long has been, then Los Angeles is turning into Mexico City,” says Tom Hogen-Esch, an assistant political science professor at Cal State Northridge. An ironic predicament for a city founded on a literal interpretation of the American Dream.

“The middle class is getting pushed and pulled out of Los Angeles,” Garcetti says, citing unaffordable housing and underperforming schools on the one hand and a shifty job market on the other. “For me, the core issues of the middle class are jobs, housing, and education. City government has a strong role to play in the first two and is emerging as a player in the third.”

Let’s assume for the moment enough ink has been spilled debating the fate of LAUSD. How much responsibility does your councilmember have to find you a job and a place to live? “Progressive cities can do something to take the edge off of globalization,” says Hogen-Esch.

A philosophy of enlightened self-interest seems to dictate that they should. For instance, our collective future as a city is currently hampered by the housing crunch. Mary Leslie, president of the Los Angeles Business Council, a nonprofit advocacy organization lobbying for issues that affect the region’s business community, says L.A.’s current un-affordability has put a “brain drain” on the region. “It’s making Los Angeles less competitive than other places to do business,” Leslie says. “We have companies saying they have to subsidize existing workers to get them to stay or offer incentives to help with homeownership in order to get new workers to come.” According to Leslie, UCLA, a major local employer, has said that the housing situation affects its ability to attract the best faculty. “Deals fall apart over the issue,” she says.

“With regard to housing policy, the government completely abdicated its role in the 1990s,” Garcetti says. “We fell 50,000 units behind what our general plan called for. It’s ironic that in the rest of the country homeownership has never been higher, while in L.A. it’s never been lower.”

His fix involves getting you to vote for Proposition H, a $1 billion housing bond that he put on the November ballot. The measure is designed to fund permanent emergency shelters for the indigent and those precariously poised on the edge of homelessness, such as the elderly, as well as low-income housing for working families. It’s popular with developers, because three quarters of the funds raised would go to them, in the form of grants and loans to construct affordable units, which in turn makes it popular with housing advocates. But a quarter of the bond would be set aside to assist first-time homebuyers, and Garcetti says that in order to ensure solidly middle-class families would benefit, the measure earmarks that $250 million for households earning up to 150 percent of the area’s median income. For these and other reasons, the L.A. Business Council enthusiastically supports it.

But the measure also prioritizes smart growth policies such as transit-oriented developments (TOD), which channel residential density into more commercial districts accessible by public transportation. When it comes to finding a space for the middle class, it’s not all about strict affordability, according to Beth Steckler, a Proposition H proponent and a policy director at Livable Places, a nonprofit development company. Many urban planners advocate TODs as a way to revitalize neighborhood business districts, use increased foot traffic to decrease crime, and relieve traffic congestion and improve air quality through greater use of public transit. Public safety, breathable air, and commuting options beyond the soul-deadening 10 freeway are by no means values restricted to the middle class, but they are more able to reject such a life. Many Angelenos “with some ability to choose are choosing to leave,” says Steckler.

On the other side of the debate, taxpayer associations are coming out against the bond measure, displeased it will result in a property tax increase, somewhere in the neighborhood of $15 per $100,000 of assessed value, as well as $1 billion in debt, a slightly unnerving number. The city’s administrative officer, however, puts it within an acceptable debt-to-revenue ratio.

Libertarians and fiscal conservatives may hate big government, but Americans haven’t always taken issue with the idea their tax dollars might subsidize someone else’s leg up. In his recent book Over Here: How the G.I. Bill Transformed the American Dream, Pulitzer Prize-winning journalist Edward Humes argues that the U.S.’s huge expansion of homeownership during the post-war period was largely driven by returning soldiers taking advantage of federally guaranteed mortgages under the G.I. Bill – it was not, in other words, an accidental benevolence of the marketplace.

Turns out few things about the middle class were actually accidents of the free market. “Labor unions in this country can largely be attributed for the growth and expansion of the middle class,” says Kent Wong, director of the UCLA Institute for Labor Research and Education. “Many poverty-wage jobs became middle class after unionization.”

Since then, however, the ability of successive conservative administrations to redefine the “free market” as antithetical to organized labor has led to some cognitive dissonance as American workers attempt to find their place in a destabilizing economy, says Smith College sociology professor Rick Fantasia, who has written extensively on labor and class issues. “People live in families, they live in communities, but in the realm of the economy, they’re not supposed to act collectively,” he says. “It’s the ability to make the ‘worker’ disappear in people’s minds and replace it with the ‘consumer.’ The individual replaces the collective, and that’s accompanied by a mendacity that sees no class. One kind of permits the other.” Even the term “middle class” is politically charged, Fantasia argues, because it changed the connotations carried by its predecessor “working class,” commonly used until 30 to 40 years ago.

From the spartan environment of their downtown headquarters, you’d never know that the Los Angeles Alliance for a New Economy (LAANE) was becoming a leader in challenging Republicans’ war on collectivity. Threading through a bullpen packed tightly with desks, dividers, and shelving stacked with economic data and books on politics, labor policies, and social justice, it’s hard to fathom that this wonky office is a driving force in the economic overhauling of Los Angeles.

“The fundamental meat and potatoes of a thriving economy is good paying jobs with health care benefits and stability,” says Madeline Janis, LAANE’s executive director. “There is no way to get there without unions.” Labor unions may have been declared a nostalgic artifact in the globalized era, but overall, according to the California Budget Project’s study, the state’s unionized employees are making $1.43 to every dollar made by a non-unionized employee.

Thus, one of LAANE’s answers to a globalized marketplace has been to identify low- to moderate-income area jobs that can’t be shipped overseas – retail employees, security officers, restaurant staff – and then work to elevate them to middle-class salaries, as with their current campaigns to unionize the city’s security officers and expand local chapters of UNITE HERE into hotels along the Century Boulevard Corridor. “No law says hotel, service sector, and construction jobs have to be low wage, just like no law said auto workers had to be low wage,” Janis says.

And L.A.’s future, experts insist, is rich in potential jobs. “Because of our geographic location and cultural diversity and ties, economically speaking, L.A. is pretty well positioned to compete,” says Hogen-Esch.

Some 40 percent of the trade entering the U.S. comes through L.A.’s ports, and according to Garcetti, those facilities could triple their capacity in the coming years. The city’s shown a willingness to weigh in on the matter. At last month’s civil disobedience demonstration protesting worker exploitation along the Century Corridor, Councilmembers José Huizar and Ed Reyes were among the arrestees, while local hiring agreements, such as those tied to redevelopment in the Hollywood area and the historic concessions LAANE helped win for communities surrounding downtown redevelopment, are funneling jobs into distressed areas.

In recent years, one of local labor’s highest-profile victories was to actually re-unionize an industry with its Justice for Janitors campaign. Revisiting past labor successes has proved to be a smart strategy. “I think if you look at the history of our labor movement it’s often been coupled with a strong social movement,” Wong says. “One of the things we’re witnessing in L.A. is a new generation of labor leaders very much concerned with building unions as part of a broader social justice movement.”

The right Reverend Altagracia Perez, a New York native who came to Los Angeles via Chicago, sees in L.A. a unique opportunity for coalition building. “I don’t think I would have had the leadership opportunities I’ve had here elsewhere,” she says. Only three years into her tenure as priest of Holy Faith Episcopal Church in Inglewood, she entered the union fray right in the midst of the last grocery workers strike. It didn’t take long for her star to rise. “I know, I have friends in high places.” Perez breaks out in a raspy fit of giggles, but it’s sort of true. Villaraigosa appointed her to the Housing Authority of Los Angeles, and Garcetti put her on the Neighborhood Review Commission. As a major force behind the Coalition for a Better Inglewood which successfully kept out big-box retailers, Wal-Mart has probably put her on a hit list.

“The reason everyone can buy in is because of the focus on the worker,” Perez says. That’s how pagans, Jews, Muslims, and Christians of all stripes have come together to support local labor organizations such as CLUE, Clergy and Laity United for Economic Justice. This kind of coalition, in which environmentalists and union members, clerics and policy wonks all come together, ensures that a broad commitment to social justice is preserved, rather than a narrow special interest served. “We [religious leaders] have to have a say in what we participate in,” she clarifies. “We don’t do rent-a-collar.”

“We’re built different here; in other places there’s a sense that you’re fragmented or you’re part of the machine,” she says. According to Perez, that translates into a willingness to build even unlikely coalitions, as in when downtown residents stormed city hall to lobby for the Staples development once the developers signed a community benefits agreement. “We can have win/win situations. We can be a model of responsible development for the country,” she says. “I truly believe we can run a strong economy not on the backs of the working poor. That’s called greed. It’s a sin.”

And as far as the role elected officials can play, it seems pretty straightforward to Perez.

“I think the government is there to serve people,” she says.