Building for the future ... housing's impact on the economic viability of the city.

Los Angeles has many virtues that appeal to corporate America--abundant intellectual capital in its highly educated workforce, world-class universities and community colleges that consistently draw new talent to the region, a tremendous quality of life and a vibrant economy with great diversity. The entertainment industry, including the studios, post production editing, sound, television production, motion capture, video game production, and Internet content creation, is unique to Southern California and provides an economic stability that exists in no other major metropolitan area. Engineering, healthcare, biotech, defense contracting, software development, real estate, financial services, legal and accounting services, advertising and technology all drive the economic engine of our local economy.

So, where is the problem?

As major growth companies, such as Yahoo!, Symantec, Electronic Arts and Amgen, commit to adding thousands of jobs to the local economy, the reality of the affordable housing shortage becomes more immediate. High housing costs cause businesses to have to pay wage premiums to their workers in order to keep a stable workforce, thus reducing their profitability and raising prices to consumers. In a recent example, a large local medical laboratory company discovered that its employee turnover rate had exceeded 20 percent annually and concluded that it was largely due to the fact that the well-paid employee base was unable to afford housing other than rental property and was spending a disproportionate share of their take-home income on rent. As a result, employees would often follow other job opportunities that allowed them to move to lower priced areas. The company's solution was to relocate outside of Los Angeles to an area that accommodated more affordable housing for their employees--not an acceptable outcome for our local economy.

Affordable housing to support job growth in Los Angeles is essential. Without convenient options for affordable housing, workers face long and frustrating freeway commutes and add to the transportation challenges that already exist in our heavily populated region. As our nation begins to address its dependency on foreign oil and advocates for energy conservation, it becomes even more counter-productive to force our citizens to commute long distances from their homes to their jobs.

The solution is to create housing where the jobs are, whether through adding density, encouraging mixed-use development or converting obsolete buildings to residential use as has been successful in Downtown Los Angeles. Regardless of the method, the creation of affordable housing in areas where jobs are available will help business control costs, will reduce infrastructure demands on energy and transportation systems and will enhance the quality of life for those workers who can enjoy the benefits of living and working in smaller communities.

The key to success is to balance job growth, available housing stock, transportation, energy conservation, the quality of life and the general economic well-being of our city. We in the business community need to work closely with our Mayor and City Council to address these challenges as equal partners in building for the future.

Gerald A. Porter is Chairman, Los Angeles Business Council and Vice Chairman, CRESA Partners.