Two academics have written and now twice rewritten a study, “Pasadena’s Tale of Two Cities,” describing Pasadena as “one of California’s most unequal cities … now characterized by a widening income gulf, low wages for many, and high rents.” While this description is partly true, I feel compelled to comment on its distortions by their further statement that:.
“This harsh reality is not simply the result of inevitable market forces. Decisions made in City Hall — particularly about jobs and housing — contribute to Pasadena’s widening income gap and the hardships encountered by a significant number of families.”
I am not an academic. I am a part-time elected official who has formerly served the city as planning director, planning commissioner and City Council member, as well as a long-time volunteer with an agency devoted to providing affordable housing, so I have some experience in these matters.
Pasadena’s “wide economic divide” is a fact. However, I would describe it as economic diversity, offering opportunity for mobility and social cohesion, not an embarrassment. Another academic who did a study of our minimum wage policy explains:
“As is the case for many affluent cities, a local low-wage labor force provides services that mainly cater to the more affluent residents.”
Indeed, “Pasadena’s Tale of Two Cities” documents that low-wage earners are concentrated in food services, hotels and health care, job sectors that are growing in Pasadena, which was never a high-wage manufacturing center.
Continuing, “Pasadena’s Tale of Two Cities” notes that during the period 2013-2017:
“The percentage of low-income households remains the same, while the percentage of households with incomes over $200,000 increased. This trend results in a hollowed out middle class.”
In fact, their study shows that the percentage of households with incomes over $200,000 increased by only 1.5 percent and the percentage of those earning between $25,000 and $200,000 decreased from 69.8 percent to 68 percent. So it is inaccurate to say that the middle class is “hollowed out.” Besides, why are gains in income that move middle-class households up the income ladder characterized as a bad thing for them, or for the city?
But the most outlandish conclusions of this study are related to housing.
Housing prices, both homes and rentals, are certainly increasing at a rapid rate. This is a regional phenomenon.
“Pasadena’s Tale of Two Cities” posits that “The housing developments approved by the city have exacerbated the situation” because they are market rate/expensive. How? Their postulate is that “As the city adds more high-end housing, landlords in the existing rental units raise rents to get closer to the rents in the pricy new apartments.” Really? There is less support for this trickle-up theory than there is for the counter theory that adding more supply will exert downward pressure on rents (“filtering”), which the authors dismiss.
Worse, this study discounts Pasadena’s 17-year-old Inclusionary Housing Ordinance, which requires that 15 percent of new units be allocated to low- or moderate-income households. This ordinance has in fact produced 577 new affordable units. They describe a “huge Loophole” which allows developers to pay a small in-lieu fee rather than providing the units on site. This “small fee” is actually hundreds of thousands of dollars per project and it has yielded up to $5 million in a single year, which has been invested in producing other affordable units throughout the city.
Pasadena is an affluent city with a diverse population. This diversity is a strength and demonstrates that a non-homogeneous community can succeed. We must overcome very real problems that confront many mid-sized American cities, including rising rents, homelessness, violence and under-resourced public schools. However, the representation that Pasadena is Dickensian community with an uncaring government is intellectually dishonest and simply not true.
Terry Tornek is mayor of Pasadena.