Exposed: Eric’s Fake Facts

LA WATCHDOG

LA WATCHDOG--Mayor Eric Garcetti and the Herb Wesson led City Council are opposed to Measure S, the Neighborhood Integrity Initiative, that is on the March 7 ballot.  Instead, they support the status quo where real estate developers make billions, the politicians receive millions, and we get the shaft. 

In a slick mailer paid for by real estate developers and the County Federation of Labor, Garcetti said, “Measure S will cause major job losses, will cost taxpayers millions, and will make our housing and homelessness even worse.” 

But the “facts” (see below) supporting Garcetti’s comments are based on the flawed Economic Policy Analysis by Beacon Economics, a local consulting firm that has close financial ties to opponents of Measure S, the Los Angeles Chamber of Commerce and Los Angeles City Hall.  

This not so independent analysis has not been peer reviewed.  Nor has it been the subject of an open and transparent discussion by the City Council, the City Administrative Officer, or the Chief Legislative Analyst as the business-as-usual Council Members are not willing to subject this report to rigorous scrutiny.  

The fatal flaw in this analysis is that it compares the impact of Measure S with the market prior to the approval by the voters on November 7 of Initiative Ordinance JJJ, the Affordable Housing and Labor Standards Related to City Planning Initiative.    

This overly complex ordinance that is over 10,000 words of confusing legal mumbo jumbo is a real deal and job killer.  

According to a previous Beacon analysis prepared to support the Los Angeles Chamber of Commerce’s opposition to JJJ, this measure’s “potential to drastically reduce residential construction would further accelerate increases in home prices and rents in Los Angeles.” 

[Note: The Los Angeles Times also opposed JJJ as it “could make LA’s housing crisis even worse.”] 

JJJ would require a developer of a residential project of 10 or more units who seeks a zoning change to essentially enter into a “project labor agreement” that requires construction workers be paid the “prevailing wage,” a rate that is significantly higher than market rates.  This will drive up project costs by 46% according to Beacon. 

At the same time, developers will have to set aside up to 25% of a project’s units for low and moderate income tenants, thereby lowering the projected rental income. 

The combination of Higher costs and lower rents is good reason not to build in LA, a reality that must be considered when analyzing the relative impact of Measure S. 

Garcetti is also claiming that Measure S will stymie the development of affordable housing and permanent supportive housing.  But this claim does not take into consideration that developers can build “as of right” without having to get zoning changes from City Hall.  And with 785,000 parcels of property in the City, there are ample opportunities for the development of market rate, affordable, and permanent supportive housing under the Measure S 24-month moratorium.  

Garcetti and the City Council claim they are beginning to reform the planning process.  They are developing ordinances to update the city’s General Plan and its 35 Community Plans and to have the City (not the real estate developers) oversee the Environmental Impact Statements and Traffic Studies.  They have introduced motions to limit campaign contributions from real estate developers. 

But if the voters reject Measure S, will we ever get an objective analysis of the impact of JJJ, the union inspired initiative that will make the building of multifamily buildings uneconomic?  Will the City continue to update on an accelerated basis the City’s General Plan and its 35 Community Plans in an open and transparent manner as required by Measure S?  Will the City provide the Planning Department with the necessary resources, especially after July 1, 2018 when the new labor contracts kick in and result in a tsunami of red ink?  Will the Garcetti and the City Council cut off the hand that feeds them and limit campaign contributions from real estate developers?  

The answer is obviously NO since we cannot trust Garcetti and the Council Members when it comes to their ultimate aphrodisiac, campaign cash. 

Vote Yes on S and end the status quo of a corrupt pay-to-play culture where real estate developers make billions, politicians receive millions, and we get the shaft.  

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Fake Facts 

  • Costs taxpayers over $70 million each year.
  • Destroys 12,000 jobs each year.
  • Cost $640 million in lost wages each year.
  • Results in losses of $1.9 billion to our City every year it is in effect
  • What is the impact of JJJ and how does that compare to Measure S?  

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(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and is the Budget and DWP representative for the Greater Wilshire Neighborhood Council.  He is a Neighborhood Council Budget Advocate.  Jack is affiliated with Recycler Classifieds -- www.recycler.com.  He can be reached at:  lajack@gmail.com.)

-cw

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