LOS ANGELES — Southern California is famed for sun, eccentricity, the entertainment industry — and expensive housing. Affordability has gone the way of cheap movie tickets in this palm-filled land of ballooning residential prices.

But rays of housing hope have begun to shine in and around downtown Los Angeles. Surprisingly, moderately priced work-force housing is establishing a solid foothold here.

Cropping up are new projects that target middle-income buyers who have been priced out of the area's hot housing market.

"The shortage of work-force housing is a severe problem across the nation, especially in areas with high housing costs, such as California, Manhattan, Washington, D.C., Boston and Chicago," said Donald Carter, president of Urban Design Associates, an architecture and community planning firm in Pittsburgh.

"Many mid- to low-income workers can't afford to live in the towns where they are employed, so they have to drive two hours or more," Carter said.

While Los Angeles has been active in encouraging construction of work-force housing by private developers, Chicago has taken a different approach on middle-class housing, offering programs to help teachers and police with mortgage-related costs, and planning to extend the assistance to firefighters. The city also is encouraging employers to help their workers with housing costs.

L.A., seeking to redevelop blighted areas near its downtown, is offering various paths for developers to build work-force housing that can be sold profitably for something that approximates affordable.

What's affordable in L.A.? Puerta del Sol Condominiums in Lincoln Heights, a blue-collar neighborhood about two miles from downtown, is a development of 165 for-sale units on a 2.9-acre former industrial site.

Prices for the units with 600 to 1,500 square feet range from the mid-$200,000s to the high $300,000s.

"This used to be a gang hangout. For years it was a forgotten neighborhood without the construction of any new housing," said R. Alex Saunders, vice president of Los Angeles-based Phoenix Realty Group, which financed Puerta del Sol.

If these condos were built at trendier locations, the prices would be about double. "They would cost from the high $400,000s to $800,000 in Pasadena and from the mid-$500,000s to more than $1 million in Santa Monica," Saunders said.

He noted that housing priced from $200,000 to $400,000 is considered entry-level in California. But because work-force housing is in short supply, many potential first-time buyers have been forced to rent or buy far from their jobs and commute long distances.

Phoenix Realty provides capital and expertise to urban developers with projects targeted at middle-income buyers in neighborhoods that need revitalization. Phoenix finances projects through its Genesis Workforce Housing Fund.

"That's our niche," said J. Michael Fried, Phoenix Realty's founder and CEO, who added that the company plans to finance such housing in other parts of the country.

"We're currently working on an East Coast transaction, and hope to roll out to other major urban areas each year. That includes a Chicago initiative," Fried said.

Fried said his company has the potential to finance more than $1 billion in work-force housing.

In Southern California, these housing units start at about $215,000, but most are in the $370,000 to $490,000 range and buyers have incomes from $55,000 to $115,000 in the Los Angeles and San Diego areas, Fried said.

The Puerta del Sol development "has turned around the neighborhood," said Percival Vaz, president of the project's developer, AMCAL Multi-Housing Inc., based in Agoura Hills, Calif. "We've had a lot of local buyers."

Puerta del Sol is a mixed-use project that also includes 221 affordable rental units, a child-care center and 10,000 square feet of retail. Vaz said all for-sale condos will be completed by June.