Local builders upset over Gov. Brown's budget plans
Michael Lizarraga, 49, of Glendora, weighs in on Gov. Jerry Brown's budget proposal to eliminate redevelopment agencies.
Twenty percent of funds for redevelopment agencies are set aside to create affordable housing.
Lizarraga is president and CEO of TELACU, a community development corporation that builds affordable senior housing.
TELACU operates about 4,000 affordable housing units, mostly in Los Angeles and San Bernardino counties.
Q: What does Gov. Brown's proposal mean for low income housing?
A: The impact will be devastating.
In any real estate development, you have costs of the development and then you have the sources of funds to build and develop the project. That is ultimately based on the rents you can get from any project that supports the debt structure and provides a cash flow to make the project feasible for the developer.
The whole idea is to have a reduced rent, so that means there's a certain amount of cash flow that can't come to the project - so the conventional sources of financing don't cover that.
There's a gap that needs to be plugged and that's what the 20 percent set-aside funds (from redevelopment agencies) are often used for.
(Lack of affordable housing) is already a crisis and now it's going to be a crisis without a very significant resource, and it's not going to work. People are not going to be able to have the housing they already need and there's not enough of.
Q: How is that going to affect communities?
A: I see the standard of living decreasing.
When senior citizens move into our facilities, we sort of anecdotally keep track of what their living situation was before. Often we hear about someone who lived in a converted garage. They tell us this apartment is the first decent thing they've ever lived in.
There is a social problem that's created when we have senior citizens that have been productive members of society their entire lives and then can't find a decent, affordable place to live. I wonder what that says about a society that does that to people.
That's already part of our housing crisis right now, but a direct result will be not being able to create more housing for people like that.
Q: What does it mean for companies like TELACU and the work force?
A: It will certainly impact our business like any other developer in that we will have to work harder to find another resource to take the place of that which will be eliminated.
TELACU will survive, but (affordable housing for seniors) is a major focus of what we provide in our communities and we will not want to see this lost.
It's going to wipe a lot of the fantastic non-profit developers that are dedicated to creating housing in our community. It won't impact just the developers but all the trades that are associated as well.
Q: What does it mean for seniors and their opportunities to get low income housing in the future?
A: I think we'll start to see impacts immediately.
The impact will occur right away, but the effects will be far reaching. There's a shortage of (affordable housing for seniors) now, how bad is that shortage going to be 10 years from now if we pull the plug right away?
It'll make the problem we have now bigger and 10 years from now the impacts will be far reaching for people that are my age today.
Date: January 22, 2011
Source: San Gabriel Valley Tribune
- Bethania Palma Markus