Still More City Hall Real Estate Schemes and Scams

LOS ANGELES

PLATKIN ON PLANNING-Question: Is the dizzy array of new zoning ordinances welling up at LA’s City Hall really intended to address LA’s twin crises of affordable housing and traffic congestion? 

Answer: No. Crocodile tears for traffic congestion, the homeless, the overpriced, the overcrowded, and the pushed out should hardly be taken at face value. They are just a convenient cover story to allow speculative real estate projects to dodge public notices, California Environmental Quality Act (CEQA) reviews, public hearings, open files, official City Council debates and votes, and appeals. 

While there are fact-resistant true believers who imagine that “building more housing” is a market panacea for every urban ailment, City Hall wreaks from the stink of these zoning schemes and scams. Their six most obvious omissions allow us to uncover their real agenda: short-term financial gain for investors at the expense of most Angelenos. 

First omission: None of the ordinances I describe below, including their expedited real estate projects, contain any monitoring or inspection requirements. There is absolutely no way to verify that – as claimed by their champions -- these projects boost transit ridership or that their new tenants give up their cars for busses and subways. Likewise, there is no way to determine if the frequently touted production of market housing – as claimed by their investors, builders, and supporters – makes other housing affordable. Considering the outrageous price increases for buying and renting housing throughout Los Angeles, this claim will remain empty until the General Plan Framework’s mandatory monitoring program is actually created and then applied to these new housing ordinances. 

Second omission: As previously shown by investigative reporter, John Schwada, the City of Los Angeles never makes any on-site inspections to determine if certifiable low-income residents are living in official affordable apartments. In fact, when Mr. Schwada made his own on-site inspections, the property managers he contacted knew nothing about the affordable units and low-income tenants that were supposedly in their buildings. Based on his research, there is every reason to believe that property owner and managers quickly switch required affordable units to market rates ones. 

Third omission: It is nearly impossible to figure out the rents of the affordable units promised by real estate developers. As anyone knows who has appealed an SB 1818 Density Bonus case, developers are secretive about the rent structure of their buildings, including the affordable units they add in exchange for such financial incentives as reduced parking and extra height. It is possible to navigate the website of the City Department of Housing and Community Investment to find three alternative rent and income tables, but good luck to anyone who tries to determine how the City applied these tables to a specific project, and if developers intend to follow these income requirements and rent tables for the next 30-55 years. 

Fourth omission: The SB 1818 density bonus ordinance, including its various spin-offs, does not require developers applying for affordable housing incentives to submit any financial bona fides.  They do not need to justify the financial incentives that the City of Los Angeles doles out to them.  While Tier Two incentives do require this financial information, City staffers reflexively accept the developers’ submissions and approve their requests.  

Fifth omission: None of these giveaways or the resulting oversized projects is contingent on expanded public services and infrastructure to serve the new building and their new tenants. In this rarified atmosphere, buildings and population can expand without using any additional water, electricity, telecommunications, street capacity, sidewalks, parks, schools, libraries, police, and fire, to name the most obvious categories. While this is truly bad planning that directly conflicts with General Plan Framework Policies 3.3.1 and 3.3.2, in a microcosm where increased density only applies to private real estate investments, and not to supportive public services and infrastructure, this crackpot reality thrives in Los Angeles. 

Sixth omission: The California Environmental Quality Act is our state’s primary tool to determine an ordinance's, program’s, or project’s environmental impacts, including their release of the Green House Gases responsible for climate change.  But the various ordinances described below, all intended to accelerate the construction of affordable and transit-adjacent housing, usually exempt projects from CEQA.  While transit is considered a climate change mitigation program, without CEQA, it is pure guess work to determine if any Transit Oriented real estate developments (TOD), reduce the generation of Green House Gases. 

THE SCHEMES AND SCAMS 

SB 1818/Density Bonus: This is the State of California’s landmark legislation that allowed the City of Los Angeles to adopt its own contested Density Bonus ordinance.  It allows the City Hall to waive many zoning restrictions, such as building heights, yards, density, and mass, to promote the construction of affordable housing.  City Planning grants these incentives automatically at Tier One, ignoring their discretionary authority to direct applicants to submit environmental and financial information.  While density bonus projects can be appealed, City decision makers reject these appeals.  Likewise, City Planning contends that Density Bonus projects do not need to conform to the City of LA’s adopted General Plan.  At Tier Two, the City offers developers additional incentives, but requires a public hearing and submission of financial and environmental documents.  These hearings, too, consistently result in project approvals, and the developers’ financial and environmental submissions always pass muster, even when the public challenges them. 

Transit Oriented Communities/Measure JJJ: The recently released Transit Oriented Communities Guidelines are an expansion of the voter-adopted initiative Measure JJJ, also called the Build Better LA initiative. Closely linked to Transit Priority Areas, it applies to locations that are as far as a half-mile from subway, light rail, and express bus lines. As a result of such a broad definition, it includes nearly all of Los Angeles west, south, and east of the downtown. Its provisions largely mimic the SB 1818 housing density ordinance. Like them, the TOC guidelines also offer two levels of incentives to encourage higher density housing within a half-mile of transit stops, unencumbered by CEQA reviews, rights of appeal, or on-site inspections to determine if the affordable units are occupied by low income people and if the new residents, in fact, commute by bus or subway. 

The only appreciable difference is that the SB 1818 Housing Density Ordinance is discretionary at Level One, while under Measure JJJ and its implementing TOC guidelines, Level One is an entirely handled by the Department of Building and Safety as a ministerial action. City Planning plays no role, and hence there are no public notices, hearings, votes, written determinations, or appeals. 

Since nearly all Measure JJJ units will be market housing, often quite far from transit stops, this measure will have little impact on increasing transit ridership or providing affordable housing. Furthermore, as reported by Jill Stewart, Measure JJJ contains so many loopholes, that developers can easily evade its affordable housing and prevailing wage requirements. 

Re:code LA:  Re:code LA, dissected in previous columns, is a five-year; $5 million program to revamp the zoning sections of the Los Angeles Municipal Code. Even though zoning is supposed to implement the General Plan, this enormous project precedes the recently started updates. Furthermore, re:code LA’s rationale of zoning code simplification is running afoul of its new residential zones, which are more complex than the existing zones.   

If its final zoning ordinances stick to the original re:code LA mission, there will be a greater range of permitted uses on most parcels.  This will reduce requests for zone changes and variances, two discretionary actions that trigger the California Environmental Quality Act, as well as public notices, hearings, and appealable written determinations. The resulting windfall for property owners will not, however, be taxed because of Proposition 13’s loopholes for commercial property 

Community Plan Updates: Los Angeles has 35 Community Plans and two District Plans. Together they comprise the mandatory Land Use element of the General Plan. While the Land Use element is a policy document, based on the template of the judicially rejected update of the Hollywood Community Plan, these updates will contain appended ordinances that change zones, plan designations, and height district for hundreds of thousands of parcels. Since most of these changes will increase density and expand permitted uses, many future discretionary projects will miraculously become by-right. They will no longer require the many discretionary zoning and planning actions that trigger the California Environmental Quality Act. 

Transit Neighborhood Plans: Transit Neighborhood Plans are specific plans for areas near light and heavy rail stations.  In practice, though, they are only up-zoning and up-planning ordinances because their infrastructure improvements remain unfunded guidelines. Their lovely plan documents, with pictures of street furniture and pedestrian improvements, are, in the final analysis, strictly recommendations.  The actual impact of these zoning overlay ordinances will be to allow a greater range of uses private parcels, as well as larger by-right buildings near mass transit stations. If you imagine they will usher in park ‘n ride, kiss ‘n ride, bike lanes, wider sidewalks, tree planting, and the other improvements routinely included in Transit Oriented Districts/Transit Oriented Communities, dream on. 

Value Capture Ordinance: The proposed Value Capture Ordinance is closely related to SB 1818, but would allow greater incentives in exchange for a larger number of affordable units. It would also apply to other land use categories, such as elder care and group homes facilities. As originally conceived, the Value Capture ordinance required affordable units in all cases where residential projects increased their size through zone changes and/or General Plan Amendments. The most recent version of the ordinance, though, has totally minimized this mandatory inclusionary housing requirement. 

This list is hardly complete, and only full time housing specialists can keep up with the twists and turns of each ordinance, other related ordinances, such as Permanent Support Housing  for the homeless, and their interactions. Nevertheless, however befuddling these ordinances and their implementing regulations and guidelines may be, the six omissions I identified above continue to apply. 

As a result, we are left with a painful conclusion; the real beneficiaries of these housing-related ordinances are private real estate investors, not Angelenos looking for cheaper housing or commuters hoping for less traffic.   

They are generous, untaxed gifts for developers, adding to a long list of prior schemes and scams in Los Angeles.

 

(Dick Platkin is a former Los Angeles city planner who reports on local planning controversies for City Watch LA.  Please send any comments or corrections to rhplatkin@gmail.com.) Prepped for CityWatch by Linda Abrams.

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