PROGRESS REPORT
MARCH 2010
HOUSING TRUST IS CO-HOSTING
CONGRESSIONAL BRIEFINGS FEATURING
CONGRESSMEN ED ROYCE & JOHN CAMPBELL
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he Housing Trust is co-hosting two Congressional briefings featuring Congressman Ed Royce (CA-40) March 31 and Congressman John Campbell (CA-48) April 1. The briefings are being held in cooperation with the Pacific West Association of Realtors® and the Orange County Association of Realtors®. Professor Kerry Vandell, director of the UCI Paul Merage School of Business, Center for Real Estate, will give his economic update at both briefings with a focus on real estate. To RSVP for either briefing, contact Dan Carlsson at 949.559.9382 or dcarlsson@cox.net.
The Congressman Royce briefing, co-hosted by the Pacific West Association of Realtors®, will be held March 31, 8:30 a.m. registration, 9 – 11 a.m. program at the PWR offices, 1601 East Orangewood Avenue, Anaheim 92805
The Congressman Campbell briefing, co-hosted by the Orange County Association of Realtors®, will be held April 1, 3:30 p.m. registration, 4 – 6 p.m. program at the OCAR offices, 25552 La Paz Road, Laguna Hills 92653
ORANGE COUNTY HOUSING SUMMIT IV
FOCUSES ON “NEW IDEAS & NEW DIRECTIONS:
LOOKING TOWARDS THE FUTURE”
More than 250 people attended last year’s Housing Summit.
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et for May 20, 2010, the fourth annual Orange County Housing Summit will feature a diversity of experts who will bring insight and clarity to the county’s and state’s housing status and offer their views on our housing future. “New Ideas & New Directions: Looking Towards the Future” is hosted by the Orange County Housing Trust and will be held at the University of California, Irvine Student Center from 8:30 am to 2:30 p.m. with registration starting at 8 a.m. The registration form can be accessed at
http://ochousingtrust.org/pdf/OCHT2010Housing-Summit-Registration-Form-2.pdf
for the Summit is at the end of this Progress Report; registration prior to April 24 pays a reduced rate.
The Housing Trust is proud to announce this year’s Summit co-hosts, which include Neighborhood Housing Services of Orange County, Urban Land Institute Orange County District Council, Orange County Division of League of California Cities, Building Industry Association of Orange County, UCI Paul Merage School of Business-Center for Real Estate, Orange County Business Council, Orange County Association of REALTORS®, Pacific West Association of REALTORS®, and the Orange County Chapter of Lambda Alpha International.
Although the current economic and housing market conditions are alleviating some of the price pressure on housing throughout Southern California, the lack of new construction combined with the rapid sale of existing residential inventory including REO is creating a situation that could severely impact the housing market and the availability of affordable workforce housing in the future. According to Dr. Christopher Thornberg, a well known economist and one of our speakers:
California has been suffering from a lack of affordable housing for almost two decades, since the collapse in construction after the late eighties bubble. Regulations, nimbyism, and development fees have all played some role in this lack. This along with a wave of immigration into our state has left the state with an enormous overcrowding problem–the worst in the nation as a percent of overall housing.
Why does it matter? Besides the direct human costs, over-crowded housing has been linked to public health and safety issues, not to mention the poor academic performance of children raised in such an environment, leading to higher public education costs. Such issues also lead to more sprawl, as families are forced to move to outlying areas in order to find a decent living space. It also raises rental rates to higher levels, putting stress on all renters in the region. Clearly one of the keys to California’s future success is to find a solution to this ongoing problem.
To address these and other critical housing issues, the Summit Planning Committee has invited a number of experts to explore the relationship between housing, transportation, business, and the economy in Orange County and to share their thoughts on how stakeholders can come together in the region to make a positive impact in our housing market. Along with Dr. Thornberg, speakers include:
Cathy Creswell – Deputy Director of Housing Policy Development at California
Department of Housing and Community Development
Kerry Vandell – Director, UCI Paul Merage School of Business Center
for Real Estate
Ehud Mouchly – USC School of Policy, Planning & Development
Will Kempton – OCTA Executive Director
Cindy Quon – Caltrans Director District 12, Orange County
Jeff Davi – California Department of Real Estate Commissioner
Ted Chandler – COO, AFL-CIO Housing Investment Trust
Ann Sewell – President of Community Foundation Land Trust,
California Community Foundation
Chris Texter – Principal, KTGY architects
We are also seeking sponsors for the Summit. By being a sponsor, your company or organization will be recognized by the 300 anticipated attendees and in the event promotions as being a concerned participant in Orange County’s housing industry. For information on how to be a sponsor, contact Dan Carlsson at 949.559.9382 or dcarlsson@cox.net. The OC Housing Summit is the largest event of its kind in Orange County. Your support will be greatly appreciated by the Housing Trust and the Summit co-hosts. We look forward to developing partnerships with you and the other sponsors as we work together to strengthen Orange County and its workforce housing sector.
HOUSING TRUST BOARD OF GOVERNORS
ADDS THREE NEW MEMBERS
Three new members have joined the Housing Trust Board of Governors with the addition of former State Sen. Joe Dunn; Will Kempton, Chief Executive Officer of the Orange County Transportation Authority (OCTA); and Cindy Quon, District Director of the California Department of Transportation (Caltrans) District 12.
“We are very pleased that Sen. Dunn has accepted our invitation to join the Housing Trust Board of Governors,” said Peter Villegas, board chairman. “His experience in and knowledge of state government and his keen interest in housing will be valuable assets for the Housing Trust as we move ahead with implementing our workforce housing programs.”
State Sen. Dunn is a nationally respected litigator who represented Orange County in the California Senate from 1998 to 2006. He gained notoriety in Sacramento for his leadership role on the committee investigating Enron’s tactics during the state’s energy crisis in 2000. Dunn also spearheaded several other legislative investigations that examined deportations of Mexican Americans in the 1930s and uncovered a domestic spying scandal involving the California National Guard and the Bush Administration.
Dunn was president of the California Medical Assn. from 2006-2009. He is a co-founder of and managing partner with The Senator’s Law Firm, Santa Ana, and most recently was appointed chair of the Board of Directors of VoiceofOC.org, a new on-line, Orange County focused news service.
Will Kempton’s career in transportation began with Caltrans in 1973. He held management positions in finance and in the director’s office prior to being appointed as assistant director in charge of Legislative and Congressional affairs. Kempton also served as executive director of the Santa Clara County Traffic Authority for seven years. From 1992 to 2002, he transitioned to the private sector as a partner at Smith, Kempton & Watts, a transportation consulting and advocacy firm that focused on major infrastructure programs. In January 2003, Kempton joined the City of Folsom as assistant city manager, Community Services. He was responsible for overseeing the operations of the city’s Community Development, Neighborhood Services, Parks and Recreation, Utilities, and Public Works departments.
In November 2004, Kempton was appointed by Governor Schwarzenegger to lead Caltrans. He was responsible for managing the day-to-day operations of California’s state transportation system, including more than 50,000 lane miles of state highways stretching from Mexico to Oregon and from the Pacific Ocean to Nevada and Arizona. At Caltrans, he oversaw an annual operating budget of more than $13.8 billion, 22,000 employees, and $10 billion worth of transportation improvements under construction. In this and other key transportation positions, he developed broad understanding of transportation programs and policies, especially in the area of transportation finance and legislative points of view, and has cultivated extensive contacts throughout the transportation community at all levels of government. These contacts include local, regional and state administrators, as well as many key members of the state Legislature and the United States Congress.
Cindy Quon was appointed to District 12 Director for Caltrans in August 2001, where she manages a staff of 980 and an operating budget of $132 million. Quon also serves as an ex-officio board member on the Orange County Transportation Authority (OCTA) board, the Transportation Corridor Agency (TCA) board, the METRANS Advisory board, and the Orange County Women In Transportation Seminar (WTS) Advisory board.
She began her engineering career with Caltrans in the Junior Civil Engineer rotation program, and was promoted consistently throughout her career to become the Deputy District Director for Program and Project Management for Caltrans in District 7, being responsible for the timely delivery of capital transportation improvements in Los Angeles and Ventura counties. Prior to her appointment as District 12 Director, Quon was the Department Manager of Project Development for OCTA, and in this capacity she planned, managed and directed a full range of transit and transportation capital improvement programs. Quon was born in Hong Kong and earned a Bachelor of Science degree and a Master’s of Science degree in Civil Engineering, specializing in structure, from California State University, Los Angeles.
“We are very pleased that Will and Cindy have agreed to join our Board of Governors and we look forward to their involvement in the Trust and its programs,” said Patricia Neal, Housing Trust president. “Transportation has always had an impact on residential construction, but we believe that with the implementation of SB-375 that impact will be even more pronounced for all forms of housing. With their extensive experience and expertise, Will and Cindy will help us better understand the regulation’s affect on future homebuilding as it relates to transportation.”
Other members of the Board of Governors are:
Mark Hoover, Vice President, First American Title Insurance Company
Sally Lang, Vice President, Wells Fargo Bank
Sharon Ellis, Executive Director, Habitat for Humanity
Chuck Hayward, President, Irvine Campus Housing Authority
Joe DeCarlo, Managing Principal, JD Property Management
Peter Denniston, President, Denniston Realty
Kristine Thalman, CEO, Building Industry Association of Orange County
Mary Jane Cambria, President, Orange County Association of Realtors
Roger Grable – Partner, Manatt, Phelps & Phillips Law Firm
Katrina Foley, Councilmember, City of Costa Mesa
Doug Chappell, Business Manager, IBEW Local No. 441
Doug Bystry, CEO, Clearinghouse CDFI
Phillip Schaefer, Director, Pacific West Association of Realtors
Joe Carreras, Lead Policy Analyst, Program Manager & Researcher, Southern California Association of Governments (SCAG)
Eric Nicholl, Director of Economic Development, City of Brea
Prof. Kerry Vandell, Director, Center for Real Estate, Paul Merage School of Business, UCI
Tefere Gebre, Executive Director, Orange County Labor Federation, AFL-CIO
Helen O’Sullivan, AOF/Pacific Affordable Housing Corp.
Glenn Hayes – Executive Director, Neighborhood Housing Services Orange County
Ken Mutter – Chief Operations Officer, Neighborhood Housing Services Orange County
LACK OF AFFORDABLE WORKFORCE HOUSING CONTINUES
TO BE MAJOR ISSUE THAT ORANGE COUNTY MUST SOLVE
By Tefere Gebre, Executive Director
Orange County Labor Federation, AFL-CIO
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ecent reports that focus on the cost of living in Orange County including the cost of housing, paint a fairly bleak picture if you are one of the county’s “working families.” According to a comprehensive study titled “The Orange Crush: The Squeezing of Orange County’s Middle Class” by John R. Hipp at the UCI Department of Criminology, Law and Society and the Department of Sociology, “most housing is no longer affordable to low- and middle-income families. The cost of housing in Orange County remains among the highest in the nation.” Because of the high cost of housing, the report points out that many of the new jobs being created in the county are low-pay, low-skill jobs that are not adequate to cover the cost of living and certainly not the cost of housing.
Nationally, the housing picture isn’t really any better. A study by the Center for Housing Policy written by Keith Waltrip, underscores that rather than improving, housing affordability actually worsened slightly between 2005 and 2008. The share of U.S. households spending more than half of their monthly income for housing (including utilities) increased from 14 percent in 2005 to 15 percent in 2008. The same pattern held for the working households that are the principal subject of his report; the share of working households spending more than half their income on housing increased from 20 to 21 percent over the three-year period. The regions where the cost of housing is highest based on percent of household income used for housing include Riverside-San Bernardino-Ontario (36%) and Los Angeles-Long Beach-Santa Ana (35%) – statistically, Santa Ana encompasses all of Orange County.
COUNTY LOSES YOUNGER PEOPLE
The lack of affordable workforce housing has many ramifications for Orange County; one of the most troubling problems is the fact that the county continues to lose a major portion of its younger population to areas and states (e.g. Texas) where home prices are more affordable. The Orange County Business Council reports that the county could lose up to 20 percent of its young adults in the next 20 years, due mainly to the lack of entry-level housing. Little has changed in the past several years. The county’s high cost of homeownership and rental housing requires many low-wage workers who don’t move to less expensive states to either live in crowded housing conditions or commute from locations outside the county such as eastern Riverside and San Bernardino counties.
Although housing prices have declined, so has median household income. Consequently, many households earning the area median income (AMI) for Orange County are still not able to afford a median-priced, single-family home in the county or the rent on a nice apartment in a good area. In fact, Orange County continues to be among the nation’s most expensive rental markets. According to the Hipp report, the wage needed to pay for a two-bedroom apartment in the county is about $31.00 an hour, about four times what a waiter or waitress makes ($8.01/hour) and twice what a customer services representative earns ($15.06). Unfortunately, the largest number of job opportunities in the county is in the lower paying categories.
Rental housing is usually the housing source that can provide low-and moderate-income workers with affordable places to live. However, lack of affordable rental housing can cause unduly high occupancy levels, resulting in overcrowding and household stress. “This imbalance has a potential to create overcrowded housing conditions, as families couple together to split rental costs, and several health risks as the propensity for homelessness is increased with such a gap between the cost of living and the jobs provided,” Hipp states. Ultimately, a shortage of quality, affordable housing can lead to potentially debilitating social and economic effects throughout the county such as increased homelessness, domestic disruption, health issues and child neglect.
HOUSING PRICES STILL TOO HIGH
While housing prices in Orange County have in fact decreased rather substantially with the economic downturn, they are still much too high for many blue collar workers and young professionals to afford. In fact, a housing affordability index indicates that affordability has gotten worse in our region compared to other major metro areas in the nation, especially for homeowners earning up to 120% of area median income. “Since 1970, the median home value in Orange County has remained at the top 1% of U.S. counties,” Hipp points out. The current median price of a home in the county is $425,000, a 15% increase from a year ago.
The belief that foreclosures and REOs would create a pool of affordable housing which could be purchased by working families has not panned out as some expected. Many of these distressed properties have been purchased by investors with cash in hopes of handsome returns as the housing market improves, which it seems as if it is starting to do. The homes are either rented or fixed up and sold at a tidy profit.
KEY POLICY RECOMMENDATION
One of the key policy recommendations made by the Hipp report is to address the cost of the county’s housing, which it says is “exorbitant, ranking among the highest in the nation.” It states that “Developers must focus on providing workforce housing close to downtown business centers so that (workers) won’t have to seek housing in the distant regions. Local governments should provide incentives for developers to provide such housing.”
Taken together, these reports emphasize the need for affordable workforce housing in Orange County and throughout Southern California . . . not just a few units here and there, but thousands of units to accommodate our working families today and tomorrow. As our economy recovers, which now seems to be happening, the recovery will be stifled if the workers necessary to fill a growing number of jobs – whether blue collar or white collar – cannot afford to live here. They simply will not come, and that’s not a union issue or management issue, that’s a fundamental economic issue that we must all address and solve together. Our future depends on it.
(Tefere Gebre is a member of the Orange County Housing Trust Board of Governors. He can be contacted at tefere@oclabor.org)
ORANGE COUNTY ASSOCIATION OF REALTORS® INTERVIEWS PAT NEAL ABOUT ORANGE COUNTY HOUSING TRUST
The following Q&A with Pat Neal, a long-time Realtor® and President of the Orange County Housing Trust, ran in the December 2009 issue of The Orange County Realtor® Magazine.
How long have you been in the real estate business?
I obtained my license in 1973. I have been in the real estate business since then, with the exception of my four plus years as Deputy Secretary of the California Department of Transportation, Housing and Business under Governor Gray Davis and the close to 2 years that I spent with Fannie Mae.
What is your favorite part of being a REALTOR®?
I would have to say that my favorite part is working with first-time homebuyers.
Is there a quote that you apply in your life and your business?
Yes, it is an Irish Blessing which says:
May the road rise with you, May the wind be always at your back, May the sun shine warm upon your face, And rains fall soft upon your fields, And until we meet again, May God keep you in the hollow of His hand.
What motivated you to get involved in real estate policy and advocacy?
Funny you should ask. Following a complaint to my local board, the Executive Officer told me that if really wanted to make a difference I should get elected to the Board of Directors. I did, and I think they really wished I had gone quietly into the night.
What is currently happening in the real estate market in Orange County?
There is still a lack of affordable housing for first time homebuyers and the workforce. The workers who keep the community going are commuting long distances or doubling and tripling up to find affordable housing. REALTORS® working with relocation companies know how difficult it is to convince professionals to accept jobs in our county. Hospitals have seen it with recruiting doctors and nurses. The lack of affordable housing in all price ranges is the most serious threat to the real estate industry in Orange County.
What is the Orange County Housing Trust?
The Orange County Housing Trust is a non-profit with a mission to provide a solution for the Southern California region to meet the growing demand for affordable housing. The Trust achieves this by offering homeownership and development lending, education by virtue of an Annual Housing Summit, and the forging of partnerships and collaborations with organizations affected by a lack of workforce housing. The Orange County Association of REALTORS® is one of our partner organizations and has sponsored and attended our Housing Summit every year.
What motivated you to accept the position of President?
I love a challenge! This has to be one of the greatest challenges that I have ever tackled. On that same note, the position has offered me the opportunity to be very creative and to put all of my real estate and policy experience to use.
What is your vision for the Orange County Housing Trust and housing in Orange County?
Over the last six months I have worked hard to develop a governing structure, with high energy movers and doers in Orange County. That is done! The future of the Orange County Housing Trust is blazingly bright. We are on a roll; the Board of Governors is an eclectic cross section of leaders in a number of fields. The energy level when we meet beats any Power Bars. My vision for the OCHT is to make it a template for what a successful housing trust is, how a housing trust can address the serious problems that a shortage of affordable workforce housing can create in communities.
ARBOR AT WOODBURY REPRESENTS
WORKFORCE HOUSING AT ITS BEST
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rand openings of new housing projects are few and far between these days, so the grand opening held recently for Jamboree Housing Corp.’s new Arbor at Woodbury residential project in Irvine deserves kudos for at least two major reasons . . . it’s a great example of quality workforce housing and it was built substantially under budget. Because the 90-unit apartment project came in for less than budgeted, Irvine-based Jamboree Housing gave back to the City of Irvine the city’s $575,000 investment in the project. “It’s very rare to complete a project this early,” said Laura Archuleta, Jamboree Housing president. “This is only the second time in my career that I’ve had the privilege of returning funds to our partners so quickly.” Along with the City of Irvine, Arbor investors include the Irvine Company, Union Bank, and US Bank.
Designed by KTGY architecture and planning, also based in Irvine, the Arbor at Woodbury represents state-of-the-art workforce housing. The community provides quality housing to families earning between 30% and 60% of the area median income with rents currently ranging from $523 to $1,450 a month based on family size and income level. It is also sustainable with such features as ENERGY STAR appliances, dual-flush toilets, low-flow showers and energy-efficient lighting. All the Arbor apartments include central heating and air, Internet and cable access, granite counter tops, master bedroom walk-in closets, and outdoor balconies or decks. Arbor residents also have access to the community center that includes management offices, a full kitchen, computer-learning center, and tutoring/arts and crafts room. Other amenities include a laundry center with ENERGY STAR washers and dryers, a tot lot, salt-water pool and barbecues.
Anyone who thinks affordable housing is bad for the neighborhood needs to visit this project, which is located at 300 Regal Avenue in Irvine’s Woodbury community. It will change your mind. For more information about Jamboree Housing, which is now one of the largest active builders of affordable workforce housing in California, go to www.jamboreehousing.com.
SAD NEWS TO REPORT . . .
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e have sad news to report. Pat Neal’s daughter, Eileen Marguerite Wagner-Bailey, passed away unexpectedly on February 17, 2010 in Sacramento. Eileen was born March 6, 1958 in Inglewood. A long-time supporter of youth soccer, she graduated from Los Alamitos High School and later earned a B.A. and M.A. in English from California State University Sacramento. Eileen is also survived by her husband Mark Bailey, her son William D. Layne (Sacramento), siblings Michael Wagner (San Francisco), Patricia Vardiman (Brea), and Robert Wagner (Sacramento) and many nieces and nephews. Donations can be made in Eileen’s name to the Cassy Rowe Benefit Soccer Tournament, 1212 Zinfandel Drive Roseville, CA 95747.
U.S. REPRESENTATIVE ED ROYCE (R), 40TH DISTRICT
