What’s got housing so expensive? Red tape and construction costs, alleges L.A. Controller

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Funds from Los Angeles’ much-vaunted Proposition HHH bond program have been poorly used, officials alleged Wednesday, after L.A. Controller Ron Galperin released a report claiming bureaucratic red tape has prevented construction of desperately-needed housing for Angelenos.

“Providing housing and shelter is a proven way to solve homelessness, but three years after voters approved a $1.2 billion bond for that very purpose, not even a fraction of the housing required exists,” Galperin said.

Homelessness in Los Angeles has ballooned to 36,000 people, but only 5,873 supportive units and 1,767 low-income units have been funded through HHH, according to Galperin. Many of those projects cost more than $600,000 per unit, and as of October 2019, no HHH-funded units are open, despite voters approving the measure nearly three years ago.

The Controller’s office has created a resource map showing the cost and status of each of the City’s 114 HHH projects. The resource map has identified 19 housing developments under construction, 60 in pre-development and 35 more under review and pending approval.

Lengthy approvals aren’t the only issue, though. Building cost estimates have skyrocketed, from $350,000 for a small studio or one-bedroom unit in 2019 to a median cost of $531,000 per unit today. More than 1,000 HHH units are projected to exceed $600,000, with one project topping $700,000 per unit.

“Tens of thousands of people are sleeping on our streets, in our parks and on our sidewalks each night,” Galperin said. “A course correction is needed so that the City can maximize HHH dollars and create more units quickly and cost-effectively.”

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