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LA’s Mayor and The ‘Dishonest’ Mistake

PLATKIN ON PLANNING-We all mistakes, mostly honest ones, because we are in a hurry, lack information or just figure out problems poorly. But prominent public officials cannot be let off the hook so easily. After all, they have their immediate staff available to investigate a full range of public policy questions, as well as the backup to fact-check claims and investigate all alternatives. Furthermore, in addition to resources down the hall, they have access to experts in the departments and agencies that report to them, as well even more experts in academic institutions and think tanks who are only a phone call or an email away. 

Thus, when public officials make mistakes, in this case Mayor Eric Garcetti with his repeated claims about LA's housing crisis, I can only conclude that it is a "dishonest" mistake. Through press releases, statements, and his recent State of the City address, Hizzonor has remarked again and again that by gradually updating Los Angeles' community plans, he can solve LA's housing crisis that includes sky-rocketing rents, a growing lack of affordable housing and an increasing homeless population. His prescription, as follows, is straight forward enough, even if most of it is not spelled out in detail: 

  1. Despite the Hollywood Plan’s demise in Superior Court due to its inflated population forecasts, subsequent updated community plans will be used to massively up-zone large swaths of each community plan. 
  1. Real estate investors will then charge in and build large amounts of housing in each newly deregulated neighborhood. 
  1. Some of this new housing will be affordable. 
  1. Most of the new housing will be high end, but this over-supply will suppress housing costs for all other types housing. 
  1. The new luxury housing will eventually deteriorate and also become affordable housing. 

Why do I call these frequently made claims “dishonest mistakes?” 

First, the City of Los Angeles does not have current and accurate information about its own population. There are no realistic population forecasts, especially for local neighborhoods. It relies on data from the Southern California Association of Governments (SCAG), and these data are incredibly inaccurate. 

For example, in 1996 and again in 2001, based on SCAG data, the General Plan Framework predicted that the 2010 population of LA would be 4.3 million. In fact, the population was about 3.8 million, or 500,000 people fewer. When similar inflated numbers were misused to turn the update of the Hollywood Community Plan into a tool to up-zone and up-plan much of Hollywood, the Superior Court threw the proposed plans and zoning ordinances out on their ears. 

Second, the City of LA does not have current and accurate information about the housing potential of existing zoning. Earlier assessments indicate that current zoning could support a population of between five and eight million people. Without this information, as well as population forecasts, there is no way to determine if any particular neighborhood needs its local real estate up-zoned to meet future population growth. 

Third, the City of LA does not have current and accurate information about the capacity of local public services and infrastructure to meet the needs of existing residents, much less greater numbers of future residents in a particular neighborhood. Nevertheless, the General Plan Framework is crystal clear that up-zoning and up-planning can only proceed where there are sufficient public services and infrastructure. 

Fourth, the Mayor's approach to housing that advocates demolishing what exists and replacing it with new market housing will wipe out far more affordable housing than it will construct. In fact, this is already happening, with about one unit of new affordable housing replacing four demolished older units. In other cases, such as single-family homes, McMansions cost about three times the price of the less expensive homes they demolish to create a building site. 

Fifth, there are no data supporting the Mayor's claim that an unregulated housing market will produce affordable housing. Investors target the most lucrative housing alternatives available, which is luxury housing. Investors will not plunk down money for housing projects that are either money losers or just scraping by. 

Sixth, there are also no data supporting the claim that in Los Angeles, over time, pricey housing declines in price and becomes affordable -- what the Mayor's courtiers call “filtering.” On the ground, the opposite is the case, with all types of residential real estate increasing in price over time, even when controlled for inflation. 

Seventh, the Mayor's approach ignores the real causes of LA's housing crisis, which is just a local expression of a national trend, and in some cases, an international trend. These causes include the elimination of government programs to fund, and in some cases, to build and operate public housing.

In addition, increasing levels of wealth and income inequality leave most of the US population with less purchasing power in constant dollars to spend on housing. 

Finally, this trend also includes large amounts of foreign investment in US real estate, especially residential projects in large US cities like Los Angeles. When Russian, Chinese, Brazilian, and Saudi oligarchs and princes park their money in the US, it goes into luxury projects, not into affordable housing. This investment not only reduces the amount of affordable housing, but tends to pull up the price of all levels of housing. 

With such compelling information readily available, why then do Mayor Garcetti and his kindred spirits make so many dishonest mistakes when it comes to planning reforms, zoning, and housing issues in Los Angeles -- even when these ideas have been rejected by judges in successful law suits against the City? 

While only the fly on the wall knows for sure, my guess is that the Mayor and his circle of contributors, advisors, lobbyists, publicists, and on-call experts are so linked to private real estate investors, that they will not let facts, experiences, or contrary viewpoints cloud their vision of a Los Angeles where real estate speculators have free rein.

 

(Dick Platkin is a former LA City planner who reports on local planning issues for CityWatch. He welcomes comments and corrections at [email protected].) Edited for CityWatch by Linda Abrams.