For many Long Beach residents, buying a home in the city by the sea may seem to be no more than a pipe dream, but city officials are hoping that a fresh approach to affordable housing could be the key to help its residents.
At its Feb. 6 meeting, the city council voted in favor of Vice Mayor Rex Richardson’s recommendation to ask the city manager’s office to explore creative ways to help residents afford a home. At that meeting, the vice mayor emphasized the need to include low- to moderate-income families.
“Here at the city level,” Richardson said, “Long Beach can design policy solutions to expand pathways to homeownership for our most underserved communities. Given that down payments are the most significant barrier to buying [homes], our City needs to do better and do more to pull together resources in order to help families make that leap into homeownership.”
In a report to the council, Richardson outlined several major hurdles facing residents in the area. He particularly noted that residents of color and those with low to moderate incomes have been consistently excluded from easily obtaining loans. The vice mayor’s report cited figures from the Greenlining Institute.
“Although African-Americans make up almost 14 percent of Long Beach’s population, they received just 7 percent of home purchase loans,” Richardson wrote in his staff report. “Latinos make up 41 percent of the population but received only 22 percent of loans, and Asians make almost 13 percent of the population but received 10 percent of loans.”
Richardson also noted another issue: seven out of the 10 mortgage lenders in the city are not banks, and these non-bank lenders are not subject to laws like the Community Reinvestment Act. The vice mayor said in his report that this particular law “requires banks to meet the credit and borrowing needs of the communities where they operate.”
Richardson outlined several areas for the city manager’s office to study. He asked to explore the possibility of creating a counseling center for home buyers, to partner with private-sector institutions to “retool Long Beach’s soft second mortgage programs,” to evaluate “the feasibility of alternative forms of homeownership supply such as community land trusts and other cooperative homeownership models,” and to establish a dialogue with the top seven non-bank lenders to “develop a path to a community benefits participation plan.”
Richardson explained in his report how that dialogue with non-bank lenders would help residents afford a down payment on their home. While mortgage lenders can offer loans ranging between $10,000 to $25,000, the City could help “package together multiple down payment assistance programs” by partnering with private institutions.
At last Tuesday’s meeting, Richardson’s recommendation enjoyed several supporters from the public.
One resident appeared before the council and said she participated in a roundtable discussion on the issue that Richardson’s office hosted in December.
“I think we all agree,” she said, “that a city of homeowners is a lot more preferable than a city of renters. There’s more investment. There’s more pride. There’s more involvement, and as people are getting jobs here, they want to live here.”
Another housing advocate and resident from north Long Beach asked that the City also pay attention to provisions to protect renters.
Second District Councilmember Jeannine Pearce supported Richardson’s request, emphasizing the need for the City to align itself with good partners in order to package and brand mortgage-lending programs. Pearce described how potential home buyers might feel suspicious of some mortgage-assistance programs.
“So,” Pearce concluded, “I would just hope […] that we would find a way for us to put some city dollars to educating our base.”
Sixth District Councilmember Dee Andrews also voiced his support to the potential study.
“I just want to thank you for bringing this item forward,” Andrews told Richardson at Tuesday’s council meeting, “because homeownership is very critical in creating generational wealth and transforming […] communities. And this study is a great first step in promoting homeownership for working families.”
According to a staff report from Richardson’s office, there will be no significant fiscal impact for the city manager’s office to study the issue and report back to the council, however, city officials haven’t yet adopted a policy. If and when a new program is announced, its associated costs will likely be announced at that time.