Pat Brown Institute of Public AffairsCalifornia State University, Los Angeles5151 State University DriveLos Angeles, CA 90...
EditorAli ModarresCover DesignRichard “Rüsty” NavarretteGraphic DesignJulie ClouseLos Angeles 2011: State of the City is p...
LOS ANGELES 2011:  State of the City   A Publication of the Pat Brown Institute           Daniel Flaming and Patrick Burns...
STATE OF THE CITYTABLE OF CONTENTSIntroduction	                                                                        vJA...
STATE OF THE CITYINTRODUCTION    November 2011    Dear Readers:         It gives us great pleasure to welcome you to our 2...
STATE OF THE CITYSTATE OF THE ECONOMYDANIEL FLAMING President of Economic RoundtablePATRICK BURNS Senior ResearcherHIGHLIG...
LOS ANGELES 2011Figure 3.  High LA Underemployment for Workers with B.A. Degree                                           ...
STATE OF THE CITY     The highest rates of underemployment (unemployed plus discour-         Figure 5.  High Underemployme...
LOS ANGELES 2011Figure 8.  Industry Connections of Latino Workers in 2009                                                 ...
STATE OF THE CITY     Lack of labor force inclusion for black workers is a critical problem.   Figure 11.  Labor Force Sta...
LOS ANGELES 2011Figure 14.  Los Angeles compared with U.S. Labor Market, August 2011                                      ...
STATE OF THE CITYFigure 16.  Los Angeles County Industry Employment Profile in 2007Sources:  Employment Development Depart...
LOS ANGELES 2011Figure 17.  Industry Job Change 2007-2010                                                               WH...
STATE OF THE CITYINDUSTRY RESTRUCTURING FROM                                                                              ...
LOS ANGELES 2011Figure 20.  Los Angeles County Public Assistance Caseload                                                 ...
STATE OF THE CITYFigure 22.  Los Angeles County Employment Change in the 1990                                            A...
LOS ANGELES 2011       The resources of local government are not large enough to control               powerful. Local gov...
STATE OF THE CITYPUBLIC TOOLS FOR STRENGTHENING                                                  	 8. 	Infrastructure impr...
LOS ANGELES 2011     The resources available for improving labor market outcomes are               The Economic Roundtable...
STATE OF THE CITYployment and underemployment breakouts by educational attainmentinclude persons 25 years of age and older...
LOS ANGELES 2011THE STATE OF RENTAL HOUSINGIN THE CITY OF LOS ANGELESDANIEL FLEMING President of Economic RoundtablePATRIC...
STATE OF THE CITY     When households pay more than they can afford for the shelter            Figure 4.  Gross Rent in th...
LOS ANGELES 2011Figure 6.  Share of Renter Households that are Rent Burdened                                              ...
STATE OF THE CITYVACANCY RATES                                                                  Figure 8.  Vacancy Rate fo...
LOS ANGELES 2011WALKABLE NEIGHBORHOODSWITH AFFORDABLE HOUSING AND PUBLIC TRANSITDANIEL FLEMING President of Economic Round...
STATE OF THE CITYof this movement of workers is attributable to short-distance commutes                                   ...
Los angeles.2011 annual state of the city report.pat brown institute of public affairs
Los angeles.2011 annual state of the city report.pat brown institute of public affairs
Los angeles.2011 annual state of the city report.pat brown institute of public affairs
Los angeles.2011 annual state of the city report.pat brown institute of public affairs
Los angeles.2011 annual state of the city report.pat brown institute of public affairs
Los angeles.2011 annual state of the city report.pat brown institute of public affairs
Los angeles.2011 annual state of the city report.pat brown institute of public affairs
Los angeles.2011 annual state of the city report.pat brown institute of public affairs
Los angeles.2011 annual state of the city report.pat brown institute of public affairs
Los angeles.2011 annual state of the city report.pat brown institute of public affairs
Los angeles.2011 annual state of the city report.pat brown institute of public affairs
Los angeles.2011 annual state of the city report.pat brown institute of public affairs
Los angeles.2011 annual state of the city report.pat brown institute of public affairs
Los angeles.2011 annual state of the city report.pat brown institute of public affairs
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  1. 1. Pat Brown Institute of Public AffairsCalifornia State University, Los Angeles5151 State University DriveLos Angeles, CA 90032-8261T (323) 343.3770F (323) 343.3774www.patbrowninstitute.org
  2. 2. EditorAli ModarresCover DesignRichard “Rüsty” NavarretteGraphic DesignJulie ClouseLos Angeles 2011: State of the City is published by the Edmund G. “Pat” Brown Institute of Public Affairs,California State University, Los Angeles, 5151 State University Drive, Los Angeles, CA 90032-8261.Digital copies are available at www.patbrowninstitute.orgPublication date: November 2011© 2011 The Edmund G. “Pat” Brown Institute of Public Affairs
  3. 3. LOS ANGELES 2011: State of the City A Publication of the Pat Brown Institute Daniel Flaming and Patrick Burns Economic Roundtable The Edmund G. “Pat” Brown Institute of Public Affairs 2011
  4. 4. STATE OF THE CITYTABLE OF CONTENTSIntroduction vJAIME REGALADOALI MODARRESState of the Economy 1DANIEL FLAMINGPATRICK BURNSThe State of Rental Housing in the City of Los Angeles 16DANIEL FLAMINGPATRICK BURNSWalkable Neighborhoods with Affordable Housing and Public Transit 20DANIEL FLAMINGPATRICK BURNSBiographies 30
  5. 5. STATE OF THE CITYINTRODUCTION November 2011 Dear Readers: It gives us great pleasure to welcome you to our 2011 edition of Los Angeles: State of the City Report. As the title implies, the publication is an annual enterprise of the Pat Brown Institute of Public Affairs. Los Angeles is the nation’s second most heavily populated city. It has a formidable economy, albeit a trou- bled one, that provides a financial base for the nation’s largest state economy, also heavily troubled. The city is arguably one of the most culturally diverse in the nation and, indeed, the world. This remarkable place can be described in many ways, and each perspective opens an exciting new window to the rich social, political, eco- nomic, and cultural dynamics of the area. Today’s hard times call for strong spirits and frank analysis of where we are and where we are going. For Los Angeles to maintain its image of prosperity as the last stop on the highway to American Dreams, it must face socioeconomic realities and challenges. For that reason, this year’s State of the City Report focuses on two important issues: employment and housing. Parting with our previous style of having multiple authors develop independent reports, this year we have partnered with colleagues at the Economic Roundtable to produce the entirety of the report. The State of the City Report is divided into three sections: state of the economy, state of rental housing, and importance of bal- ancing transit-oriented development with affordable housing. The in-depth analyses contained herein paint a bleak picture of our employment opportunities, allowing us to see the diversity of people facing hardship in the job market. This situation is compounded by significant problems in the housing market that are making the re- gion unaffordable to many. We believe that this report, in its entirety, functions as a wake-up call to our regional decision makers, offering them an array of policy options that are equitable in nature and progressive in spirit. We are proud and delighted to present you with this annual report. We hope that you find this and future reports informative and useful. Sincerely, Jaime A. Regalado, PhD Ali Modarres, PhD Executive Director Chair Pat Brown Institute Department of Geosciences and Environment ci v
  6. 6. STATE OF THE CITYSTATE OF THE ECONOMYDANIEL FLAMING President of Economic RoundtablePATRICK BURNS Senior ResearcherHIGHLIGHTS Figure 1.  LA’s Underemployment Rate above 23% since July 2009 1. A quarter of LA’s labor force lacks sustaining work because it is un- employed or underemployed. Over a third of LA’s households are impacted by underemployment. 2. Unemployment and underemployment rates for Los Angeles’ resi- dent labor force are 40% and 41% higher, respectively, than U.S. rates. 3. Underemployment among college-educated workers in Los Ange- les County is 80% higher than the national rate. 4. African American workers have the highest underemployment rate of any ethnic group. Rates of disconnection from work have risen in 2011. Less than half of young African American men under the age of 25 who are not in school are employed. 5. Workers under 25 years of age have the highest underemployment rate—36.1%. Long-term economic stability depends on strong job connections for young workers. Sources:  Unemployment rate for Los Angeles County from BLS monthly date underemployment rate for each month is a 3-month average of the current and 2 prior months. 6. LA’s economy does not have enough jobs to provide employ- ment for all of its residents who must support themselves and their families through work. Since 1990, Los Angeles’ population has grown 19%, but the number of jobs in its formal economy has Figure 2.  U.S. Underemployment above 15% since February 2009 declined 9%. 7. Slow, steady annual job growth is likely, with jobs in the formal economy returning to the prerecession level in 2018, and total em- ployment (including informal and self-employed workers) return- ing to that level in 2016. 8. LA has opportunities to nudge its economy toward sustainable long-term growth. The most important tools are local government’s authority over land use, education, and the labor market. Success- ful use of these tools depends on understanding LA’s strengths and working in harmony with market forces to build on those strengths. Sources:  Unemployment rate from BLS monthly date, underemployment rate for each month is a 3-month average of the current and 2 prior months. 1
  7. 7. LOS ANGELES 2011Figure 3.  High LA Underemployment for Workers with B.A. Degree OVERALL LABOR FORCE TRENDS A quarter of LA’s labor force lacks sustaining employment because it is unemployed or underemployed. The inability of workers to earn a living creates income insecurity and reduces the standard of living for everyone in their households. Given that 59% of LA’s population is in the labor force and that worker households have an average of 3.6 people, damaging consequences from LA’s lack of jobs are likely to directly af- fect over a third of Los Angeles’ population.1 The underemployment rate for LA’s resident labor force has been above 23% for over 2 years, as shown in Figure 1.2 Underemployment is about 80% higher than official unemployment rates, also shown in Fig- ure 1. Underemployed workers include the officially unemployed who are actively looking for a job, and also involuntarily part-time workers who want full-time work but have to settle for part-time hours, and mar-Sources:  CPS records for noninstitutional, civilian population, age 25 and over. For adequate sample size, data ginally attached workers who want and are available for work but arefor each month is a 3-month average of the current and 2 prior months. not actively looking for a job. The unemployment and under-employment rates for Los Angeles’ resident labor force are 40% and 41% higher, respectively, than the U.S.Figure 4.  Industry Connections of Workers with B.A. Degree, 2009 rates shown in Figure 2. UNDEREMPLOYMENT FOR WORKER GROUPS College Educated One of the most disquieting findings is the high level of under- employment in college-educated workers in Los Angeles County com- pared with California and the United States (Figure 3). The underem- ployment rate in LA was 70% higher than the national rate, and the unemployment rate was 80% higher. This trend has been evident over the past 2 years. This hollowing out of knowledge-based employment raises seri- ous questions about which industries will emerge from the recession with robust competitive strength. The industry connections and em- ployment status in 2009 of workers with a B.A. degree or higher areSources:  2009 American Community Survey PUMS for Los Angeles County shown in Figure 4. This labor force profile reflects industry contraction and attrition of jobs for higher-educated workers during the first 2 years of the recession. Overall, in 2009, 6% of college-educated workers were unem- ployed, and another 6% were discouraged workers. Rates of disconnec- tion from work for these and other groups of workers rose still higher in 2010.3 The greatest absolute number of unemployed and discouraged workers was among those formerly employed in Professional Services (27,000), followed by Education (23,000), as shown in Figure 4. 2
  8. 8. STATE OF THE CITY The highest rates of underemployment (unemployed plus discour- Figure 5.  High Underemployment for Workers with No H.S. Diplomaaged workers) were in Temporary Employment Agencies and otherindustries that provide business support services (18.2%), followed byEntertainment (17.5%), Motion Pictures and Sound Recording (17.3%),and Retail Trade (16.5). Industry sectors in which the 2009 rate of underemployed workersin Los Angeles County was at least 20% higher than in the United Statesas a whole include: • Professional Services 21% • Utilities 23% • Hotels and Restaurants 24% • Information Excluding Motion Pictures 24% • Transportation and Warehousing 37% Sources:  CPS records for noninstitutional, civilian population, age 25 and over. For adequate sample size, dataNo High School Diploma for each month is a 3-month average of the current and 2 prior months. Underemployment rates for LA workers without a high school di- Figure 6.  Industry Connections of Workers with No H.S. Diplomaploma are 121% higher than those for workers with a B.A. degree (Fig-ure 5). Labor market conditions are bleak for these workers throughoutthe U.S. In LA, California, and the nation as a whole, under-employmentrates for the least-educated group of workers were above 25% by thebeginning of 2009 and have remained above that plateau ever since. Overall, in 2009, 10% of workers without a high school diplomawere unemployed and another 11% were discouraged workers. Thegreatest absolute number of unemployed and discouraged workerswas among those formerly employed in Construction (25,000), followedby the business support sector that includes Temporary EmploymentAgencies, Janitorial Services, and Security Guards (21,000), as shown inFigure 6. The highest rates of underemployment were in Social Assis-tance (29.7%), Retail Trade (21.4%), the business support sector of Tem-porary Employment Agencies, Janitorial Services, and Security Guards Sources:  2009 American Community Survey PUMS for Los Angeles County(20.6%), and Construction (20.5%). Figure 7.  High Latino Underemployment, some progress in 2011Latinos The share of adults without a high school diploma is more than 4times greater among Latinos than among non-Latinos throughout theUnited States (2009 American Community Survey). Latinos account for 32% of all U.S. adults without a high school di-ploma, 67% of California adults, and 76% of LA adults. Consequently, un-deremployment trends for Latinos shown in Figure 7 have some resem-blance to those in Figure 4 for the overall population without a diploma. Underemployment among Latino workers is still high, above 25%in LA and California, and above 20% nationally, but rates have dropped.In LA, the current rate is almost a fifth lower than in early 2010. Sources:  CPS records for noninstitutional, civilian population, age 16 and over. For adequate sample size, data for each month is a 3-month average of the current and 2 prior months. 3
  9. 9. LOS ANGELES 2011Figure 8.  Industry Connections of Latino Workers in 2009 Overall, in 2009, 11% of Latino workers were unemployed and an- other 7% were discouraged workers. The greatest absolute number of unemployed and discouraged workers was among those formerly em- ployed in Construction (45,000), followed by the business support sec- tor that includes Temporary Employment Agencies, Janitorial Services, and Security Guards (34,000), Repair and Personal Services (30,000), and Hotels and Restaurants (30,000), as shown in Figure 8. The highest rates of underemployment were in Construction (19.9%), Retail Trade (19.5%), and Social Assistance (19.0%). African Americans African American workers have the highest underemployment rate of any ethnic group. Furthermore, rates of disconnection from work have risen in 2011, as shown in Figure 9.Sources:  2009 American Community Survey PUMS for Los Angeles County Overall, in 2009, 15% of African American workers were unem- ployed and another 9% were discouraged workers. The greatest ab-Figure 9.  African Americans have highest Underemployment Rate solute number of unemployed and discouraged workers was among those formerly employed in Retail Trade (16,000), followed by the busi- ness support sector that includes Temporary Employment Agencies, Janitorial Services, and Security Guards (11,000), as shown in Figure 10. The highest rates of underemployment were in Hotels and Restaurants (42.8%), the business support sector that includes Temporary Employ- ment Agencies, Janitorial Services, and Security Guards (37.4%), Enter- tainment (35.8%), Construction (35.7%), and Retail Trade (33.4%). Employment rates among African American workers in Los Ange- les rise with level of education and age and are higher for women, as shown in Figure 11, using annual average data for 2009. Less than half of young African American men under the age of 25 were employed in 2009, and employment rates have dropped in sub-Sources:  CPS records for noninstitutional, civilian population, age 16 and over. For adequate sample size, data sequent years.for each month is a 3-month average of the current and 2 prior months. The scarcity of jobs for African American workers is not explained by lack of education. Among persons 25 years of age or older, only 12%Figure 10.  Industry Connections of African American Workers in 2009 of blacks did not have a high school diploma, 24% were high school graduates, 41% had some college education, and 22% had a B.A. degree. This is roughly similar to the overall educational profile of adults in Los Angeles County.4Sources:  2009 American Community Survey PUMS for Los Angeles County 4
  10. 10. STATE OF THE CITY Lack of labor force inclusion for black workers is a critical problem. Figure 11.  Labor Force Status of African American Workers in 2009Sustaining employment is essential for economic survival. Extendedseparation from work marginalizes workers and makes re-employmentincreasingly difficult. This problem affects all under-employed workersbut is endemic for African American workers. There is an urgent need foractions that bring more black workers into the labor force.Under 25 Years of Age Workers under 25 years of age have the highest underemploy-ment rate of any labor force group—36.1% in LA, 35.8% in California,and 30.6% in the United States (Figure 12). Many of the youngest workers who are ready to join the laborforce have been shut out. Long-term economic growth and stabilitydepends on the success of young workers in finding footing in the Sources:  American Community Survey 2009 Public Use Microdata Sample for Los Angeles County; Universe: alllabor market. The emerging demographic profile of increasing num- African Americans with work historiesbers of retired workers and decreasing numbers of working age adults Figure 12.  Nationwide High Underemployment for Workers <25 Yearsmakes it particularly important for young workers to build strong laborforce connections. There is evidence that youth unemployment can leave a “wagescar” in the form of a large and significant wage penalty that can con-tinue into middle age.5 Workers 16–24 years of age who do succeed in finding jobs arehighly concentrated in Retail Trade and Food Services, which also leftmany of these workers underemployed in 2009, as shown in Figure 13. Overall, in 2009, 21% of workers 16–24 years of age were unem-ployed and another 6% were discouraged workers. The greatest ab-solute number of unemployed and discouraged workers was amongthose formerly employed in Retail Trade (34,000), followed by Hotelsand Restaurants (20,000). The highest rates of underemployment werein Construction (32.6%) and Transportation (28.1%). Sources:  CPS records for noninstitutional, civilian population, under age 25. For adequate sample size, data for each month is a 3-month average of the current and 2 prior months. Figure 13.  Industry Connections of Worders 16-24 Years of Age, 2009 Source: 2009 American Community Survey PUMS for Los Angeles County 5
  11. 11. LOS ANGELES 2011Figure 14.  Los Angeles compared with U.S. Labor Market, August 2011 Comparisons With U.S. Rates Unemployment and under employment rates for labor force groups in LA are compared with U.S. rates in Figure 14. In rank order, the three groups of LA workers whose underemployment rates most exceed national rates are as follows: workers with BA degrees (70%), workers 45-54 years of age (67%), and workers with some college edu- cation (59%). LACK OF JOBS Los Angeles County’s economy does not have enough jobs to pro- vide employment for all of its residents who must support themselves and their families through work. Job growth in LA’s wage and salary economy has not kept pace with population growth (Figure 15). The collapse of aerospace following the end of the cold war inSources:  Unemployment rate for total labor force from BLS data for August 2011, rates for subgroups and allunderemployment rates are 3-month averages for June–August 2011. 1989 was a watershed for Los Angeles County. Roughly $70 billion in an- nual defense procurements left the local economy, 1.1 million residents migrated out of the county, and the economic progress of working poorFigure 15.  Los Angeles County Jobs and Population 1970-2011 immigrants became the central challenge shaping the region’s future. Since 1990, Los Angeles’ population has grown 19%, and the number of jobs in its formal economy has declined 9%. Much of the residual labor force finds employment in the informal economy, where wages are low and paid under the table without benefits or labor law protection. This has meant that even in years with low-official unemployment rates, such as in 2007 before the recession began, a significant number of households have been on the losing end of competition for an inad- equate number of sustaining jobs.Sources:  U.S. Census Bureau, California Employment Development Department.2011 employment data for Los Angeles County is for June 2011. 6
  12. 12. STATE OF THE CITYFigure 16.  Los Angeles County Industry Employment Profile in 2007Sources:  Employment Development Department, Labor Market Information Division, March 2009 benchmark.WHERE JOBS HAVE BEEN SUPERSECTOR PERCENTAGE OF TOTAL EMPLOYMENT For the most part, Los Angeles is a place where workers provide • Construction 4services for people or manipulate data and information. Less than one • Durable manufacturing 6fifth of jobs are in construction, manufacturing, transportation, or utili- • Nondurable manufacturing 5ties. Shifting now to data provided by employers that show jobs located • Transportation, warehousing & utilities 4in Los Angeles (in contrast to previous data provided by workers that • Wholesale trade 6show where workers live), the industrial profile for 2007 (at the height • Retail trade 10of the last business cycle before the 2008 recession began) is shown in • Information 5Figure 16. Job distribution by industry supersector was as follows: • Financial activities 6 • Professional and business services 14 • Leisure and hospitality 10 • Repair & personal services 2 • Education & health services 12 • Government 14 7
  13. 13. LOS ANGELES 2011Figure 17.  Industry Job Change 2007-2010 WHERE JOBS HAVE BEEN LOST The greatest amount of job destruction following the onset of the recession occurred in Construction (-53,000), followed by the Busi- ness Support Services cluster (-45,000), then Durable Manufacturing (-44,000), and Retail Trade (-41,000). This job change from 2007 to 2010 is shown in Figure 17. Three industries have grown since the beginning of the recession: Social Assistance, Private Education, and Health Care. This reflects grow- ing needs for health and social services, as well as investments of work- ers in their own human capital through their own education and train- ing during a time of scarce employment. The rate of job loss varied among industries. One indication of industry resilience and competitiveness is the location quotient (LQ),Sources:  American Community Survey 2009 Public Use Microdata Sample for Los Angeles County shown in Figure 18. This shows the share of Los Angeles County’s labor force employed in an industry in 2010 compared with the share of the U.S. labor force employed in the same industry.6 An LQ of 1.0 indicates that the region is at parity with the nation in attracting and retaining thatFigure 18.  Strengths of LA’s Industry base compared with the U.S. in 2010 industry. An LQ of less than 1.0 indicates below-average competitiveLos Angeles County Industry Location Quotients strength, and an LQ greater than 1.0 indicates above-average strength. Based on location quotients, LA’s greatest competitive industry by far is Motion Picture Production and Sound Recording, with a share of the local labor force that is 11.3 times greater than this industry’s share of the U.S. labor force. The goods manufacturing and movement sector shows competi- tive strength. This includes Nondurable Manufacturing (29% greater share of the labor force than in the U.S.), Wholesale Trade (28% greater), Transportation and Warehousing (9% greater), and Durable Manufactur- ing (1% greater). The leisure and hospitality sector, except for hotels, shows compet- itive strength. This includes Arts, Sports, Entertainment, and Recreation (23% greater than the U.S.) and Restaurants (2% greater). The locationSources:  Employment Development Department, Labor Market Information Division, March 2009 Benchmark. quotient for Hotels shows that 24% less of the labor force is employed in this industry in Los Angeles than in the United States as a whole. Given Los Angeles’ identity as a tourist destination and the highly developed entertainment sector, there may be as-yet-unrealized possibilities for growth in the hotel industry. Los Angeles has competitive strength in Professional, Scientific, and Technical Services (14% greater than the U.S.) and Information, ex- cluding Movies (4% greater), but it has below- average labor force con- centrations in Financial Services (6% less), Health Care (12% less), and Social Assistance (21% less). 8
  14. 14. STATE OF THE CITYINDUSTRY RESTRUCTURING FROM Four industries with above-average location quotients, sustainingTHE 2008 RECESSION wages, and the capacity to export goods and services to a global mar- Each recession tests the industrial strengths of the economy, alter- ket, but that have significant job losses since the recession started areing the number and type of jobs available in the labor market and quite as follows:possibly the wages offered for those jobs. LA’s economic trajectory for • Durable Manufacturing 17% job losswage and salary jobs in the formal economy from 2007 to 2010 (the peak • Nondurable Manufacturing 16% job lossof the last business cycle to the most recent data) is shown in Figure 19. • Information Excluding Motion Pictures 13% job lossOnly three industries grew during this period, and only two of those pay • Professional, Technical, and Scientific Services 10% job lossa sustaining wage, which for this report is pegged at average industryearnings of at least $44,000 a year, that is at least double the poverty Because these industries are important for the public balancethreshold for a family of four. The two industries that have grown since sheet and for sustaining employment of the region’s labor force, theythe onset of the recession and that pay sustaining wages are Private merit mindful attention.Education and Health Care. The average wage paid in the third growingindustry, Social Assistance, is only 64% of a sustaining wage. Government agencies, hotels, and restaurants have experiencedonly 3% job loss since the recession began. Other sectors have experi-enced job losses ranging from 6% in Motion Pictures and Sound Record-ing to 34% in Construction.Figure 19.  Los Angeles County’s Job and Industry Trajectory 2007-2010Number of Jobs Represented by Size of CircleSources:  California EDD LMID for employment, US BEA for wages; formal wage and salary employment shown in graph 9
  15. 15. LOS ANGELES 2011Figure 20.  Los Angeles County Public Assistance Caseload INCREASED DEPENDENCE ON PUBLIC ASSISTANCE From December 2007 to December 2010, the public assistance caseload grew 13%. This is directly attributable to growing unemploy- ment that followed the onset of the recession at the beginning of 2008. This is shown in Figure 20. The cash aid program for families, CalWORKs, grew 27%. The cash aid program for destitute adults, General Relief, grew 75%. Although a comparatively small program with 107,000 recipients at the end of 2010, costs are paid by the county’s general fund, making this growth a significant burden for the county’s budget. The Medi-Cal Only program, providing public health insurance for low-income adults and children who do not receive cash aid, grew 5%. The Food Stamp program, which subsidizes food purchases for low-income individuals and families, most of whom are also enrolled inSources:  Los Angeles County Department of Public Social Services one of the previously mentioned three programs, grew 53%. DECREASE IN TAXABLE SALESFigure 21.  Los Angeles County Taxable Sales in 2010 Dollars AND SALES TAX REVENUE Consumer spending decreases in recessions for at least two rea- sons. First, aggregate income for making consumer purchases declines as workers become unemployed or under-employed and have less in- come. Second, many households reduce expenditures because of un- certainty about the security of their job or other sources of income, thus spending less of the income they do have. These spending reductions compound the original causes of a recession by further decreasing the output of goods and services that is required to satisfy market demand, with corresponding elimination of the jobs that would otherwise be needed to produce those goods and services. Taxable sales in Los Angeles County, measured in constant dollars, were 19% lower in 2010 than in 2007, the year before the onset of the recession. Going back a year, from the pre-recession peak in 2006 to theSources:  California State Board of Equalization, Research and Statistics Section. Taxable sales in 2010 areestimated based on second quarter data. trough in 2009, sales declined 22%. This results in corresponding reduc- tions in sales tax revenue for city, county, and state governments. 10
  16. 16. STATE OF THE CITYFigure 22.  Los Angeles County Employment Change in the 1990 ACTIONS TO SUPPORT ECONOMIC RECOVERY and 2008 Recessions AND JOB GROWTH The following are ten actions Los Angeles can take to support eco- nomic recovery and promote long-term job growth: 1. Understand industry strengths and monitoring trends in key in- dustries. 2. Make land use decisions that support growth of key industries. 3. Foster attentive, informed interaction with key industries. 4. Preserve a stable and competitive environment for key industries. 5. Intervene in measured ways to avert decline in key industries. 6. Use government purchasing power to support growth in key in- dustries. 7. Prioritize infrastructure improvements to help key industries. 8. Use strategic assets such as the ports to leverage local value-added activity and jobs.Sources:  Bureau of Labor Statistics for household survey data from the Current Population Survey and 9. Take measured, efficient steps to make business capital available toCalifornia Employment Development Department for data reported by employers in Unemployment targeted industries in targeted communities.Insurance payroll reports. 10. Help residents get good jobs through training and employment initiatives.RECOVERING FROM THE RECESSION Job losses from the 2008 recession are almost as severe as losses How much impact can Los Angeles have on its economy? Willfrom the 1990 recession, as shown in Figure 22. Three years after the local government be picking losers and winners? The short answersonset of the 1990 recession, total employment (which includes the in- are that at best Los Angeles will give gentle nudges to its economy. Ifformal economy) had declined 8.2% and wage and salary employment these nudges are judiciously targeted and consistent, they can havein the formal economy had declined 10.4%. a modest long-term effect in helping steer the economy in the right Three years after the onset of the 2008 recession, in 2010, total em- direction. Los Angeles is not in a position to pick industry winners andployment had declined 7.9% and wage and salary employment in the losers. Its challenge is to achieve a discernable and constructive im-formal economy had declined 8.7%. pact on the economy. In the 1990 recession, the labor market scrapped along sideways atthe bottom of the employment trough during the fourth year after theonset of the recession. This also appears to be happening in 2011, thefourth year after the onset of the 2008 recession. There was slow but steady annual job growth during the recoveryphase of the 1990 recession, with recovered jobs in the formal economyreaching a plateau 10 years after the onset of the recession that wasbelow, and still remains below, the 1990 level. If this pattern holds true inthe recovery from the 2008 recession, it will be 2018 before the numberof jobs in the formal economy returns to the 2008 level. Total employment returned to the pre-recession level 8 years afterthe onset of the 1990 recession and peaked 11 years after the onset. Ifthis pattern holds true in the recovery from the 2008 recession, it will be2016 before the total number of jobs returns to the 2008 level. 11
  17. 17. LOS ANGELES 2011 The resources of local government are not large enough to control powerful. Local government’s authority over land use, education, andor even have a near-term influence on LA’s economy (Figure 23). Los the labor market can have a powerful long-term influence in shapingAngeles County has roughly the largest components of the economy, such as the following: • $1 trillion in assessed property • Land value ($1 trillion in assessed property) • $890 billion in annual industry output • Worker productivity ($450 billion in value added) • $450 billion in local value created annually • Worker compensation ($250,000 billion in wages and benefits) • $270 billion in annual compensation to workers • $220 billion in annual business income Given this view of the public sector’s modest capabilities to influ- ence the economy and yet the urgent need to improve LA’s economic In contrast, all local governments in Los Angeles County spend trajectory, what are the next steps? What tools are at LA’s disposal to im-roughly $1.3 billion annually for activities typically associated with eco- prove its economy? What types of risks create hazards for public invest-nomic development – job training, economic development, and rede- ments in workers and the economy? How can those risks be weighedvelopment. These direct outlays for economic development and revi- against potential benefits that might result from public investments?talization are less than .1% of LA’s economic output. They are too small What are the guidelines for identifying reasonable public strategies thatto be discernable in the overall economy. The most important tools of are appropriate for different industries?local government for shaping the economy are indirect but potentially INDUSTRY RISK All industries are not equal. Five key questions can be asked to as- sess the level of risk for public funds if they are invested to support jobFigure 23.  Tools for Changing Los Angeles County’s Economy growth in a particular industry. Data are available to answer all of these questions, both at a regional level and at a community level. The follow- ing questions might be asked: 1. Cost of Job Creation—How much does it cost to create a job in the industry? 2. Wages—What is the average wage level in the industry? 3. Industry Concentration—Does the industry show evidence of be- ing attracted to the target community based on an above-average concentration of jobs in the community? 4. Recent Employment Change—Has the industry grown or declined in the past 2 years? 5. Long-term Employment Change—What overall trend of growth or decline has the industry shown over the past 20 years? Any job training or economic development program involves risks to both funders and workers. The risk to funders is that improvements in employment outcomes will not be commensurate with the funds that are expended. The risk to workers is that they will invest their time, ef- fort, and hopes in trying to become self-sufficient but remain in poverty. Given what is at stake, prudent risks are well worth taking, but everyone benefits if these risks are understood and minimized.Sources:  IMPLAN input-output model for Los Angeles County; public budget data, 2009 12
  18. 18. STATE OF THE CITYPUBLIC TOOLS FOR STRENGTHENING 8. Infrastructure improvements—use public sector financing ofTHE LABOR MARKET roads, parking, drainage, utility improvements, or other infrastruc- Public tools for increasing employment and worker earnings fall ture to make a location more attractive to businesses in targetedinto four categories: industries. • Worker training focuses directly on helping individuals become 9. Public sector loans, grants, or investments—provide financial capi- competitive in the labor market and obtaining fair compensa- tal to businesses in targeted industries. tion for their skills. 10. Public sector purchasing power—use goods or services procured • Business expansion among existing employers is often the most by public agencies as a tool for negotiating agreements to hire tar- feasible and effective strategy for job creation. geted workers. • Business creation is important in communities where there is a scarcity of employers providing sustaining jobs. Business Creation • Business attraction is a tool for enabling existing businesses to 11. Micro-enterprise loans or grants—support individuals in undertak- expand or relocate on under-utilized sites that offer locational ing entrepreneurial initiatives. advantages for them. 12. Worker-owned cooperatives—support the income-generating efforts of a group of workers who are committed, energized, and Fifteen public tools within these four categories are listed next, be- prepared to invest extra effort when needed.ginning with the most cautious forms of public engagement and pro- 13. New business start-ups—use any of the tools described here togressing to the most aggressive. support growth of businesses in targeted industries.Worker Training Business Attraction 1. Upgrade training to support mobility to other industries—for 14. Businesses recruitment—advertise the locational advantages of a workers with bleak job prospects in their current industry. site or community to prospective employers. 2. Occupation-based training—generic skill training for stable or 15. Relocation incentives—use any of the tools described here as in- growing occupations that pay sustaining wages. centives to encourage businesses to locate at a targeted site or 3. Upgrade training to support advancement within an industry— community. equip workers who have low-paid but stable employment to ad- vance to better-paid jobs within their industry. MATCHING RISK LEVELS WITH PUBLIC STRATEGIES 4. Employer-based customized recruitment and training—classroom There is a hierarchy of risks in job creation and economic develop- or on-the-job training designed to meet the needs of a specific em- ment, and industry data can be used to identify, rank, and manage these ployer. risks. Higher levels of risk suggest a need for more cautious public sec- tor engagement. Every industry should receive effective public services,Business Expansion but social venture capital for training workers or creating jobs should be 5. Targeting public services to improve the business environment— invested judiciously. improve the quality or availability of existing public services, for ex- Industries with the Fewest Risks and the Greatest Benefits are the ample public safety or transportation, to make a community more most promising targets for all forms of economic development assis- efficient and attractive for businesses. tance, including job creation investments and job training. Approxi- 6. Assistance with regulatory issues—provide timely, coherent, and mately 15% of LA’s labor force is employed in industries that meet these reliable resolutions for regulatory issues, thereby improving the sta- criteria. This means that broad and effective job creation efforts neces- bility and efficiency of the business environment. sarily entail engaging industries that have uncertain pay-offs for eco- 7. Publicly owned land—provide fully entitled, developer-ready sites nomic development investments, and providing business support for for businesses in targeted industries, thereby reducing develop- those industries that balance risks and benefits. ment time and cost. 13
  19. 19. LOS ANGELES 2011 The resources available for improving labor market outcomes are The Economic Roundtable uses monthly Current Population Surveyvery small in comparison with market forces. The strategies recom- (CPS) records to compute local, state, and national unemployment andmended in this article are based on understanding LA’s strengths and underemployment rates the same way as the Bureau of Labor Statisticsworking in harmony with market forces to build on those strengths. It (BLS), with results that are identical to monthly BLS national seasonallyis not realistic to expect that public resources will reverse or fundamen- unadjusted unemployment rates (http://www.bls.gov/webapps/leg-tally alter LA’s economic trajectory. It is realistic, however, to expect that acy/cpsatab1.htm) and underemployment rates (http://www.bls.gov/thoughtful program strategies can provide slight but consistent nudges webapps/legacy/cpsatab15.htm). There is a time lag of roughly 6 weekstoward retaining and expanding industries that strengthen the econo- in releasing CPS data.my and provide sustaining employment for residents. Unemployment rates for states, the District of Columbia, Los Angeles An economic strategy is not a panacea, but without it, Los Angeles County, and New York City are computed by the BLS using CPS records,will face increased risks of economic stagnation and growing poverty. with small adjustments made using time series data in a “signal-plus-A successful strategy will require a continuing flow of reliable local eco- noise” model (http://www.bls.gov/lau/laumthd.htm) to smooth outnomic information, a broad-based public decision-making processes, a data anomalies. In a typical month, this model-based adjustment resultscoherent long-term vision, and perseverance. in unemployment rates for Los Angeles County and California that are 0.3% percentage points higher or lower than the rate obtained usingENDNOTES CPS records alone. The Economic Roundtable uses the official BLS sea- 1. The 2009 American Community Survey Public Use Microdata Sam- sonally unadjusted monthly unemployment rate for Los Angeles Coun-ple shows a total population of 9,847,607 in Los Angeles County, with ty and California in its reports on labor force conditions. The national5,704,108 or 58% of these individuals being currently employed, having unemployment statistics produced by the Economic Roundtable usingworked in the past 5 years, or being currently unemployed and look- CPS records are identical to BLS national unemployment statistics.ing for a job. There was a slight variation in the number of persons per Underemployment data are not produced for California or Los Ange-household based on labor force status: civilian employed, at work, 3.6 les County by either the BLS or the California Employment Developmentpersons per household; unemployed, 3.9 persons per household; not Department. The Economic Roundtable produces these data using CPSin labor force (discouraged workers), 3.5 persons. The overall weighted records of persons in the civilian noninstitutional population 16 yearsaverage is 3.6 persons per household. of age and over who are employed, unemployed, and marginally at- 2. The resident labor force is made up of people who live in Los An- tached to the labor force. Underemployed workers include three typesgeles, with some working in Los Angeles and some commuting to work of persons: (1) unemployed workers, (2) involuntarily part-time workersin other areas. Data about this labor force are captured through house- who want full-time work, but have to settle for part-time hours, and (3)hold surveys, including data from the Current Population Survey and marginally attached workers who want and are available for work, butthe American Community Survey used in this report. These data include are not actively looking for a job.workers employed in the formal wage and salary economy where labor The size of the CPS sample varies slightly from month to month, butlaws are observed and payroll taxes are paid, as well as workers in the typically includes 68,640 records for the United States, 5,730 for Califor-informal economy who carry out lawful and productive work activities nia, and 1,570 for Los Angeles County. Each record is weighted so thatbut are paid under the table. A second type of labor force data used the sample can be expanded to represent the entire population. Whenlater in this report comes from employer payroll tax reports. These data the sample for Los Angeles County is divided into groups based on, fordiffer from data about the resident labor force in at least three respects: example, level of education, and then divided again into subgroups(1) it is about workers who are employed in Los Angeles but may live in based on labor force status, the record count becomes small. A 3-monthanother area, (2) it includes only workers in the formal wage and salary moving average of the current month and 2 prior months is used to in-economy, and (3) industry classifications are more precise because they crease sample size and reduce month-to-month fluctuations that resultare determined by government agencies and confirmed by employers, from small samples. This 3-month average is not needed to stabilize U.S.rather than derived by coding workers’ survey descriptions of their work results; however, to make the data comparable, 3-month averages areand employers. Data provided by workers are useful for understanding used at all levels of aggregation—county, state, and nation.labor market conditions for groups within the labor force. On the other Unemployment and underemployment figures for subpopulationshand, data provided by employers provide more accurate information are derived from the Economic Roundtable’s analysis of Current Popula-about conditions in specific industries. tion Survey (CPS) records and use a 3-month moving average. Unem- 14
  20. 20. STATE OF THE CITYployment and underemployment breakouts by educational attainmentinclude persons 25 years of age and older. Other breakouts include per-sons 16 years of age and older. 3. These data are from the 2009 American Community Survey (ACS),which uses a sampling frame and question structure that is similar to,but not identical with, the Current Population Survey (CPS). The CPS asksmore questions about employment status than the ACS, and it produc-es more carefully delineated information than the ACS. However, ACSemployment data correlate closely with annual average CPS data. Thelarger sample of respondents in the ACS makes it possible to break outthe population into finer-grain groups than is possible with the CPS. Forpurposes of this report, respondents to the ACS who are 16–64 years ofage and have worked in the past 5 years, but are not currently employedor officially unemployed (that is, actively looking for a job) and also notenrolled in school, are defined as discouraged workers. 4. The 2009 American Community Survey Public Use MicrodataSample shows that among all Los Angeles County residents 25 yearsof age or older, 24% do not have a high school diploma, 21% are highschool graduates, 26% have some college education, and 29% haveB.A. degrees. 5. Gregg, P., & Tominey, E., (2004). The Wage Scar from Youth Un-employment. CMPO Working Paper Series No. 04/097. The Universityof Bristol. 6. Location quotients are calculated by dividing the percentage ofLos Angeles County’s labor force that is employed in an industry by thepercentage of the United States labor force employed in the same in-dustry. If the value is greater than one, it indicates that a larger share ofLos Angeles’ labor force is employed in that industry. 15
  21. 21. LOS ANGELES 2011THE STATE OF RENTAL HOUSINGIN THE CITY OF LOS ANGELESDANIEL FLEMING President of Economic RoundtablePATRICK BURNS Senior ResearcherFigure 1.  Owner- and Renter-Occupied Housing Units in 2010 OVERVIEW Los Angeles residents rent their homes at about double the national rate; 62% are renters, a rate that is comparable to other cities such as Chicago and New York that make up the urban center of major metropolitan areas. Rental housing is most concentrated in the oldest areas of the city. In Central Los Angeles, 82% of units are rented, whereas in the North San Fernando Valley, 40% are rented (Figure 1). The rental housing market is a key benchmark of well-being in Los Angeles because renters typically have lower family incomes than own- ers (median incomes of $33,600 vs. $81,600 in 2010) and typically pay a larger share of their income for housing costs (median of 36% for renters vs. 30% for owners in 2010). Inadequate housing takes different forms, all of which are detri- mental to the well-being of families and individuals.Sources:  2010 American Community Survey, Public Use Microdata Sample The most prevalent problem is housing that costs more than households can afford to pay. The causes include a housing inventoryFigure 2.  City of Los Angeles Housing and Population 1970-2010 that has grown slightly less than the population and renter incomes that have increased much less than the cost of housing. Figure 3.  Median Renter Household Income City of Los Angeles, Rent Adjusted to 2010 DollarsSources:  U.S. Census Bureau, American Community Survey Sources:  U.S. Census Bureau, American Community Survey 16
  22. 22. STATE OF THE CITY When households pay more than they can afford for the shelter Figure 4.  Gross Rent in the City of Los Angeles, 2010 Dollarsthey occupy, they must skimp on other necessities, including healthcare, transportation, food, and clothing. Their hold on housing is tenu-ous. Difficulty paying rent may result in eviction or in moving to a small-er, less expensive unit that is not large enough to accommodate thehousehold, creating overcrowding. Over the past 40 years, the population of the City of Los Angeleshas grown 35%, the total housing inventory has grown 32%, slightlylagging the population, and the inventory of rental housing has grown39%, exceeding overall population growth (Figure 3). The city’s rental housing inventory has grown 8% since 2007,largely because owner-occupied property that has been foreclosedand unsold since the start of the 2008 recession has been converted torental use until the for-sale housing market recovers. In the near term, Sources:  U.S. Census Bureau, American Community Surveythis increase in the size of the rental inventory is good news for renters.It increases housing choices and diminishes rent increases. The bad news is that the incomes of renter households have beendeclining since 1990. The median income of renter households over Figure 5.  Median Rent as a Percentage of Median Incomethe past decade, adjusted to 2010 dollars, is shown in Figure 3. There is Renter Households in Los Angeles City, 2000-2010year-to-year fluctuation in the median income of renters, but the overalltrend is downward; about a fifth of a percent a year since 2000. Rents continue to rise despite the limited budgets of renter house-holds. In large part, this is because it is expensive to buy land and buildhousing in Los Angeles. The average gross rent (rent plus utilities), adjusted to constantdollars, increased 28% from 2000 to 2010, and the median gross rentincreased 26%, as shown in Figure 4. When incomes are overlaid on rent levels, we see that over the pastdecade, median rent as a share of median income of renter householdshas increased from 29% to 36%, as shown in Figure 5. Over the past decade, rent as a share of income has shifted frombeing barely affordable to predominantly unaffordable for renters. Thebenchmark for affordability is 30% of income. Sources:  U.S. Census Bureau, American Community Survey 17
  23. 23. LOS ANGELES 2011Figure 6.  Share of Renter Households that are Rent Burdened RENT BURDENCity of Los Angeles, 2000-2010 The majority of renters living in the City of Los Angeles are rent burdened, paying over 30% of their income for rent, and roughly a third are severely rent burdened, paying half or more of their income for rent. This dynamic between the price renters pay for their housing and their household income has worsened following the recession that began in 2008 (Figure 6). The third of renter households paying over half of their income for rent are forced to make radical economies in other areas of their lives. This may include foregoing needed medical treatment and eating low- er-cost food with low nutritional value. Sixty-one percent of renter households are either rent burdened or severely rent burdened. This is in large measure the result of long-term income stagnation for a large share of these households, compounded by increased unemployment and underemployment since the onset of the 2008 recession. Long-term economic growth that increases productivity and wag- es in the Los Angeles region is needed to reverse this trend. There is also an urgent need to build more affordable housing and to preserve the existing inventory of affordable housing.Sources:  Census 2000 Summary File 3 Detailed Tables; 2005, 2006, 2007, 2008, 2009 and 2010 American Com-munity Survey 1-Year Estimates Detailed Tables OVERCROWDING In 2010, 20% of renter-occupied units in the City of Los AngelesFigure 7.  Overcrowded Rental Units were overcrowded (Figure 7). Overcrowded housing is an ongoing con-City of Los Angeles, 2000-2010 cern in Los Angeles, where a fifth of renter households currently live in overcrowded conditions with more than one occupant per room and a tenth live in severely overcrowded conditions with more than 1.5 oc- cupants per room.1 The good news is that a dramatic decline in overcrowding has oc- curred during the past decade. There has been a 56% decrease in severe overcrowding. This is in large measure a result of smaller, older rental units being replaced by newer bigger units. The construction of a sub- stantial number of new units during this decade has also helped.Sources:  U.S. Census Bureau, American Community Survey 18
  24. 24. STATE OF THE CITYVACANCY RATES Figure 8.  Vacancy Rate for Rental Housing City of Los Angeles From April 1999 through March 2009, the rental vacancy rate in theCity of Los Angeles was under 5%, indicating a tight housing market forrenters (Figure 8). From March 2009 through September 2010, the vacancy rate roseabove 5%, indicating that renters had more viable opportunities forfinding housing. From October 2010 through August 2011 (the most recent data),vacancy rates have again dropped below 5%, ending at 4.5% in Au-gust 2011. Over the past decade, 84% of the time the vacancy rate has beenbelow 5%, indicating a scarcity of available housing for renters overmost of the decade.RECOMMENDATIONS New funding and development strategies are needed to provideaffordable housing units for Los Angeles renters who cannot afford mar- Sources:  Department of Water and Power, U.S. Census Bureau, and American Community Surveysket rate housing. High land and development costs, coupled with lowvacancy rates, place upward pressure on housing costs, leaving a large ENDNOTEshare of residents overburdened by rent and living in overcrowded con- 1. Housing is overcrowded when there is more than one occupantditions. Given the difficulty of financing affordable units and a bleak eco- per room. It is severely overcrowded when there is more than 1.5 oc-nomic climate, public initiatives must drive the production of needed cupants per room. An example of calculating overcrowding is a one-affordable units. The following recommendations are put forward for bedroom unit, which has three rooms: a bedroom, a living room, andincreasing the production of affordable housing: a kitchen. If four people live in this unit, it is considered overcrowded 1. Streamline entitlement processes to reduce carrying costs for af- (4 people / 3 rooms = 1.33 per room). If five people live in this unit, fordable housing projects. it is considered severely overcrowded (5 people / 3 rooms = 1.66 2. Identify “nontraditional” land that has the capacity to be developed people per room). into housing. 3. Focus development interest by providing information about par- cels that the City is most interested in seeing developed. 4. Streamline the condemnation and eminent domain processes for blighted properties to provide incentives for current landowners to either sell their property or clean and redevelop the property in a timely fashion. 5. Use public funds to purchase affordable units with covenants on the brink of expiration and to incentivize owners of these units to continue providing their units at affordable rent levels. 6. Develop an affordable housing land bank. 7. Promote mixed-income and mixed-use projects in which internal cash flows create subsidies. 8. Establish development fees for residential, commercial, and indus- trial construction projects that increase the demand for affordable housing. 19
  25. 25. LOS ANGELES 2011WALKABLE NEIGHBORHOODSWITH AFFORDABLE HOUSING AND PUBLIC TRANSITDANIEL FLEMING President of Economic RoundtablePATRICK BURNS Senior ResearcherBALANCING THE COST OF HOUSING only rent burdened), as shown in Figure 1. A disproportionate share ofAGAINST TIME SPENT COMMUTING worker households with incomes below the median for the Los Angeles Workers and their families must carefully balance costs for trans- region (the Area Median Income or AMI)1 are inadequately housed, fac-portation, housing, healthcare, education, childcare, and other critical ing extremely high rates of overcrowding and rent burden. This is notneeds with income from the jobs that sustain their lives. For some, this a surprise given that worker households with low incomes also havemeans longer and more time-consuming commutes to access jobs or fewer workers to share the burden of paying for rent, and have moresecure desirable housing arrangements. For others, this means paying household members to support and house. Ninety-five percent of ex-higher costs for housing or renting overcrowded or unrepaired apart- tremely low-income (0%–30% of AMI) worker households and 89% ofments to be closer to employment opportunities. This balance is par- very low-income (31%–50% of AMI) worker households are either over-ticularly difficult for low-income households to achieve, as lower levels crowded or rent burdened. These rates are 52% and 43% higher, respec-of income limit their ability to obtain adequate and affordable housing tively, than overall rates for worker households in the City.and to access jobs. One consequence of these adverse housing conditions is that In the City of Los Angeles, 62% of all worker households that rent many workers do not live in the same city where they work. At a giventheir homes are either overcrowded or rent burdened (13% are over- point in time, roughly half of workers employed in the City of Los Ange-crowded and rent burdened, 12% are only overcrowded and 37% are les are estimated to live outside of City boundaries (Table 1). While someFigure 1.  Overcrowding and Rent Burden Rates for Renter Households in the City of Los Angeles based on IncomeSources:  U.S. Census Bureau, 2005–2007 American Community Survey 20
  26. 26. STATE OF THE CITYof this movement of workers is attributable to short-distance commutes REDUCING COMMUTES THROUGHacross adjacent municipal boundaries, reducing the number of workers TRANSIT-ORIENTED DISTRICTSwho commute long distances is better for them and the environment. Transit-Oriented Districts (TODs) integrate “land use, transporta-Stable, decent, and affordable housing located near workers’ jobs is likely tion and urban design, and prioritize walkable neighborhoods withto reduce the frequency of worker turnover and result in significant cost well-integrated connections to the regional transit network.”2 They aresavings for employers. Increasing affordable housing options across the compact developments of housing and employment in half-mile zonesCity will provide employers with access to workers who live in healthier, surrounding subway and light-rail stations, a comfortable walking dis-safer, and more permanent housing that is closer to work sites and will tance for accessing the City’s public transit.3increase retention rates for trained, productive workers.Table 1.  Work-Residence Dynamics in the City of Los AngelesLabor Shed: Commute Shed:Where workers live who are employed in the City of LA Where workers are employed who live in the City of LA Count % Count %Worker Employed in City of LA 1,384,032 100% Workers Living in City of LA 1,273,398 100%Living in: Working in: City of LA 636,693 46% City of LA 636,693 50% Other Cities in LA County 491,647 36% Other Cities in LA County 444,569 35% Other Counties Outside LA County 255,692 18% Other Counties Outside LA County 192,136 15%Sources:  U.S. Census Bureau, LED OnTheMap Origin-Destination Database, Beginning of Quarter Employment, 2nd Quarter 2008.Figure 2.  Metro Transit Lines and Stations in the City of Los AngelesSources:  U.S. Census Bureau, LED OnTheMap Origin-Destination Database, Beginning of Quarter Employment, 2nd Quarter 2008. 21

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