On March 7th, voters will decide whether or not we should build more housing in Los Angeles. As we’re sure many of you know, Measure S (formerly the “Neighborhood Integrity Initiative”) is a proposed measure that would impose a TWO YEAR moratorium on any new developments, which are not 100% affordable housing and require a change in zoning. Before we provide you with some of our opinions and ultimately recommend against voting in favor of Measure S, we want to provide you with our analysis of two issues Measure S claims will help solve, but likely will not: spot zoning and housing affordability.
Measure S claims that zoning is out of control in Los Angeles. As this KCET report states, “over 60% of the city’s geography is covered by special overlays and site-specific designations.” Many of these special overlays and site-specific designations are categorized by Q, T and D conditions which impose restrictions on what can be developed on certain pieces of land. To be brief, we cannot argue against this statement. We took a quick look at the number of newly developed buildings with dwelling units, between the years of 2013 and 2016 and found that the vast majority of these buildings were tagged with Q and/or T conditions. For example, 81% of all commercial developments, with dwelling units, which received Certificates of Occupancy between 2013 and 2016, were developed on land with Q and/or T conditions (Chart 1).
Source: LA City Department of Building and Safety: Building and Safety Permit Information Chart 1
We agree that this is a problem. When communities lack clear visions and plans for land use, everyone loses. Community members need to jump through more hurdles to figure out what can and can’t be built in their neighborhoods and developers need to cover expensive fees (some exceeding $10,000) to acquire zoning variances. But, is Measure S truly the solution to solve these issues? Not exactly. One of the best ways to solve the current disconnected state of zoning in Los Angeles is to develop comprehensive community plans which stipulate what can and can’t be built and why. Although comprehensive planning is a component of Measure S, Los Angeles’ City Council has already conceded to this point and is taking steps to ensure that Los Angeles’ General Plan gets updated every six years. Furthermore, Los Angeles is also making significant moves to update community plans, having recently hired nearly 30 new staff members to ensure that each neighborhood in Los Angeles gets an updated plan.
Housing affordability is one of the defining narratives attached to Measure S. Proponents claim that Measure S will help improve housing affordability in Los Angeles. Unfortunately, we believe that the exact opposite is true. Right off the bat, Measure S states that it will grant exemptions to its two-year development moratorium to any new developments that are 100% affordable housing. This may sound great, but the reality is that building affordable housing is very difficult as it is typically not very affordable for developers. Therefore, it is unlikely that a significant amount of housing will get built during the proposed two-year moratorium. Such a scenario will deepen Los Angeles’ affordable housing crises.
Making matters worse is the fact that not only will we not see increases in 100% affordable housing developments, we also stand to lose projects that contribute to overall totals of available affordable dwelling units. As many as 19,000 units may be laid to rest by Measure S.
Development vs. Affordability: One of the Messiest Topics To Cover
One of the more interesting aspects of Measure S is its seemingly opportunistic attempt to latch onto recent, highly debated concerns associated with how new development influences and propagates community displacement. The “Yes on S” website, for example, is littered with phrases that denote some kind of fight against high-density developments (“Measure S Battlemap”), and makes claims that Los Angeles is overdeveloped. We believe that this messaging is irresponsible because it devalues legitimate concerns over very specific developments by placing them under the all-encompassing umbrella of overdevelopment. Is over development a real issue in Los Angeles? Available macro-level data indicates that we are actually experiencing relatively low levels of development. In fact, we see lower levels of development across much of the country. We gathered data for housing “Starts” and “Completions” for the entire Western Census Region (which includes California, Washington, Oregon, Nevada, Arizona, Nevada, New Mexico, Colorado, Wyoming, Montana, and Idaho) and charted those aggregated numbers over a backdrop which includes national recession periods (Chart 2).
Source: United States Census Bureau (2017-01-18). Housing Starts: Total Housing Starts – Seasonally Adjusted Chart 2
These data illustrate that housing construction was already starting to decline prior to the start of the later recession, continued to dive and never really bounced back. We know for a fact that because LA’s demand for housing outstrips its supply, housing prices have gone up and all Angelenos end up contributing a higher percentage of their overall income to cover housing costs. Chart 3 plots reported building permits vs. median fair market rent prices in Los Angeles. We see that there is a loose negative correlation with construction and fair market rent prices.
Source: United States Census Bureau (2015-06-05). Building Permits: Single-Unit Building Permits Reported – Buildings Chart 3
We’re including this time series information for one reason: we want to stress that a building moratorium increases the likeliness that all housing prices increase to levels that only work for high-income individuals. Los Angeles is a highly desirable place to live and individuals in other parts of the country, also experiencing rising housing costs, holding jobs that are not tied to specific locations, may find significant value in a moderately more expensive housing market that is packed with highly desired attributes such as great food and weather.
Additionally, we want to raise caution regarding the concept that we can build our way out of our housing and affordability issues. Los Angeles is now in a scenario that is a little more complicated than basic “supply and demand.” Because income and wealth disparities continue to grow, where in Los Angeles race is a significant determinant of net worth, building more market-rate rate housing may only serve to displace low-income renters and possibly further segregate communities as demand for housing is pushed by individuals outside of the city. For these reasons, we strongly believe that we need to incentivize and regulate for the right type of housing. We need housing strategies that serve long standing residents, uplift disadvantaged communities and respect the cultural identities of our neighborhoods. Furthermore, by thinking systematically about the impacts of housing, we may also be able to address other important issues, such as those relating to our environment. New research is starting to point in the direction that one of the best strategies to reduce Vehicle Miles Traveled, and greenhouse gas emissions as a result, is to develop affordable high-density housing near transit access points. This likely works because it turns out that wealthier people, even though living within close proximity to public transit options, choose their cars over trains and buses. Fortunately, there are initiatives currently working on ensuring that our city creates more affordable housing near transit access points, but we are sure more can and should be done.
In summary, our recommendation to vote against Measure S should not be taken as a recommendation to ignore the problems Measure S highlights; we are not recommending you blindly trust current planning efforts related to land use and housing affordability issues. Both of these items require special attention and action if they are to incorporate respectable, equitable outcomes. We encourage you to engage in, and challenge when necessary, the participatory planning processes of the City as they work to develop a new General Plan and new community plans – these opportunities are important for all Angelenos to help shape their communities. As much as we agree with some of the concerns of Measure S supporters, we believe that Measure S will result in less affordable housing options and further exacerbate existing wealth, income, and racial issues in our city. For these reasons, we recommend that you vote no on Measure S.