Lavish Funding for a Lavish Bait and Switch Real Estate Scam: LA’s Transit Oriented Communities Guidelines

To understand what went on, you do not need to be a whistleblower, like the City employee who reported that former Director of Planning, Michael LoGrande, blatantly violated the LA’s revolving door law. For example, in the current Fix the City lawsuit against LA’s Transit Oriented Communities Guidelines (TOC), the dirty tricks were hiding in plain site. Fix the City simply gathered up enough publicly accessible facts to mount a robust legal challenge against the TOC Guidelines. This real estate scam is rooted in the lavishly funded efforts to defeat Measure S, the Neighborhood Integrity Initiative.

The No on S camp responded to the Neighborhood Integrity Initiative with a $13,000,000 corporate campaign, including a flurry of focus group-tested ads misrepresenting Measure S as an anti-housing crusade to freeze every real estate project in Los Angeles. In fact, Measure S would have only impacted a tiny percentage of real estate projects in LA.    

What equally scared these real estate interests and their coconspirators, like Eric Garcetti, was Measure S’s requirement that the City Planning Department quickly update LA’s old General Plan, including its 35 Community Plans. During this period zoning waivers for otherwise illegal real estate projects be suspended, unless the City updated its legally required General Plan elements (chapters) sooner.

The No on Measure S campaign against Measure S’s assault on its business model -- substituting market trends for LA’s legally required planning process – moved on three fronts. 

Front #1) Extract support from financially dependent organizations that formed the base of the local Democratic Party, in particular churches, environmental groups, construction unions, and non-profit housing corporations.

Front #2) Promise elaborate City Hall changes that would achieve much of Measure’s S objectives without Measure S, in particular a rapid update of LA’s 35 Community Plans, as well as banning developer contributions to local candidates and officials. (Nearly three years later, little has changed.    So far City Hall has only fully updated a few Community Plans, and developer contributions still flood City Hall, despite Councilmember David Ryu’s valiant legislative efforts to stop them.)

Front #3) Offer voters a competing initiative, Measure JJJ. Even though JJJ was filled with loopholes that undermined its stated goals of promoting Measure S’s objectives, its lavishly funded election campaign allowed it to pass. Measure JJJ then turned out to be a bait-and-switch tactic that No on S real estate interests had crafted and funded.    

Measure JJJ’s Flaws: Measure JJJ bears so little resemblance to what LA’s voters approved that a non-profit community organization, Fix the City, has legally challenged its quasi-implementation ordinance, Transit Oriented Communities Guidelines (TOC).    

• The measure presented to voters was titled The Affordable Housing and Good Jobs Initiative. The Planning Department then transmuted it into the TOC Guidelines. In doing so they by-passed an essential legal step: the City Council never adopted the City Planning Commission-approved TOC Guidelines as a municipal ordinance. Nevertheless, the TOC Guidelines mysteriously popped up in the official Los Angeles Municipal Code as Section 12.22.A.31, based on Ordinance Number 184,745, Eff. 12/13/16. 

Los Angeles map showing the impacts of the TOC Guidelines  “ordinance” that the City Council never adopted.

• The TOC provisions for affordable housing also involved bait-and-switch duplicity. They do not contain any requirements for the City to physically inspect the low-income housing units pledged by developers. The only way to verify the existence of these low-income units, their low-income rents, and their occupancy by qualified low-income tenants is missing in action.

• Oddly, the approved Transit Oriented Communities Guidelines also do not contain any requirements for transit-related improvements, such as repairing sidewalks, installing bus shelters, or issuing tenants METRO TAP cards. This omission of obvious programs to promote transit use is glaring because both METRO and LA City Planning have prepared and prominently post detailed blueprints on why and how to proceed. METRO’s website includes its own Transit Oriented Communities Guidelines and a First-Last Mile Strategic Plan that precisely describes the public improvements necessary to increase transit ridership. City Planning, too, has parallel documents on its website, including a Mobility Hubs Readers Guide, a Complete Streets Manual, and a Complete Streets Design Guide. 

• By allowing changes in Floor Area Ratios/FAR (building mass), Measure JJJ and the Section IV.1.b of the TOC Guidelines amend official Height Districts without a City Council action. In Los Angeles Height Districts are part of each parcel’s zone, such as the C2-1VL zone. The 1 indicates that the property is in Height District 1. In 1978 LA’s voters adopted Proposition U, which reduced the maximum mass of all buildings in Height District 1 by 50 percent.    Proposition U remains, but the TOC Guidelines allow the Department of Building and Safety to make ministerial (administrative) decisions that eliminate these municipal zoning laws. Lost in this backdoor process are public notices and hearings, Charter required legal findings, votes by and appeals to decision makers, and determination letters.

Fix the City’s Case against the TOC Guidelines: These are only four of the many shortcoming and/or differences between what the voters adopted as Measure JJJ and what the City Planning Commission then approved as Guidelines. The Fix the City petition also notes the following:

• The City approved the TOC Guidelines without any public hearings and without the City Council adopting them as an ordinance.    

• The TOC Guidelines deliberately “limit public awareness and evade transparency.”

• The TOC Guidelines allow for the approval of projects that put greater strain on already overburdened infrastructure and public services, such as first responders. This is in direct violation of the LA’s adopted General Plan.

• The TOC Guidelines violate several State and City laws.

• The TOC guidelines violate the will of the voters because they grant massive bonuses to developers, without the inclusion of the good jobs inherent to Measure JJJ.

• The TOC guidelines add density bonuses to developers’ projects that were not included in the JJJ ballot measure: extra height, reduced open space, and elimination of the prevailing wage requirement.

• The TOC guidelines allow developers to build in State earthquake zones, in violation of State laws.

Smearing the Messenger: It is telling that the news stories and an editorial in the Los Angeles Times (LAT), later reposted in CityWatch, ignore the legal case against the TOC Guidelines. Instead they smear Fix the City as “nimbys.” In so many words these defenders of the TOC Guidelines concede that they cannot rebut Fix the City’s message, so they target the messenger.

In doing so, the LAT also trots out unverified claims about the TOC Guidelines alleged benefits. In effect, they claim that its ends justify its sketchy means. But, a closer look reveals that the claimed benefits cannot be documented. The ends to justify the means do not exist.

LAT: TOC Guidelines have resulted in 20,000 proposed apartment units, 4,000 of which are dedicated to low-income tenants. The City of Los Angeles has no statistics on how many of these TOC apartments have been built, are occupied, and house verified low-income tenants. Developers often sit on building permits for years, and property managers can easily evade pledges to include low income units in density bonus buildings. Meanwhile 4000 affordable rental units are demolished each year.

LAT: TOC units are occupied by tenants who do not drive, and they therefore reduce traffic congestion and cut the Greenhouse Gases responsible for climate change. There are also no facts to support these claims, which are contradicted by hard evidence. If and when they are finally built and occupied, almost all TOC housing is expensive. TOC tenants are upper-income, and they use cars for most trips, either their own or through ride-sharing services. This is why bus and subway ridership continues to fall in corridors with new transit-oriented apartments, exactly what the TOC Guidelines promote. Furthermore, the best measure of traffic congestion, street and intersection Levels of Service, continue to get worse. Anyone who drives a car in LA knows this. Likewise, there is no evidence that pricey transit adjacent apartments reduce Green House Gas levels, which, closely linked to increased driving, continue to rise.

These and similar claims to cover up the irregularities and illegalities of the TOC Guidelines could be easily confirmed or denied. City Hall only needs to monitor the outcomes of the plans, ordinances, and guidelines it adopts or approves. This comprehensive monitoring process is fully described in the General Plan Framework, Chapters 2 and 9. Nothing is stopping City Hall from implementing these provisions and adding supplementary measures, such as Greenhouse Gas and transit ridership levels.

If you want the TOC Guidelines and similar up-zoning schemes to work as claimed, monitoring is a no brainer. But, if these schemes are nothing more than more real estate scams, then monitoring promised outcomes is anathema. Monitoring would quickly document that the claims are false and would therefore expose the scams.    

(Dick Platkin is a former Los Angeles city planner who reports on local planning issues for CityWatch.    He serves on the board of United Neighborhoods of Los Angeles (UN4LA) and welcomes comments and corrections at [email protected]. Selected previous columns are available through the CityWatch archives and the blog, Plan-it Los Angeles.) Prepped for CityWatch by Linda Abrams.