Jobs, Wages and Housing : Affordable Housing Benefit Fee Study

New development solves housing problems for some workers by creating new jobs that pay sustaining wages. At the same time, it creates additional demand for affordable housing because some of the workers who will be employed will not earn enough money to afford market-rate rental housing. In 2010, the City's Housing Department and Community Redevelopment Agency provided over 53,000 units of affordable housing and there were over 530,000 households that needed affordable housing, leaving over 475,000 low-income households without housing they could afford. In the absence of additional resources to build affordable housing, this gap is projected to grow to 493,000 households by 2020.The nexus between property development and demand for affordable housing is the deficit between the mean rent for an apartment in the City and the amount of earned income that workers who fill jobs created by these developments can pay for rent without becoming rent burdened. Workers are considered rent-burdened when they pay more than 30 percent of their household's earned income for rent. The nexus provides the basis for identifying development categories and determining the housing benefit fee level for each category.Businesses in the City of Los Angeles occupy an average of 746 square feet of improved building space per job, with this amount varying from 233 square feet for gas service stations to 1,871 square feet for utilities. When the income deficit is projected over the life of buildings, we get the earned income deficit per square foot of new development. The average deficit for commercial development is $69 per square foot, although it varies widely among different types of development