We just posted housing permit numbers for the City of Los Angeles for the first quarter of 2017. While 3 months of data isn’t enough to predict the annual trend, the numbers aren’t great, nor terrible, when compared to the past couple of years. As we have argued before, the baseline rate of home building in LA is too low to meet population growth, so whether it ticks up or down, it is still insufficient. The graph below shows that our housing challenges are part of a state-wide trend in which out “housing booms” create the same amount of housing as was built in “housing crashes” in earlier decades.
slide from Ben Metcalf, CA HCD[/caption]
The recent decline in permits for small multifamily apartments of 2-49 units is somewhat troubling given their traditional role in providing more affordable homes. Units permitted in early 2017 were proposed and entitled months or years earlier, so we’re not yet seeing the results of any recent shifts in policy or trends. We have heard anecdotal claims that the number of homes proposed in the City of LA has dropped in 2017, which could have been the result of uncertainty over the now-unsuccessful Measure S and/or the impacts of Measure JJJ. We will try to see if there has indeed been a decline in new applications.
Housing for the homeless facing barriers
Measures HHH and H represent an incredible opportunity to speed up production of permanent supportive housing for homeless Angelenos and pair new homes with services. The City of LA has also stepped up to identify publicly-owned sites that could be used for permanent supportive and/or affordable housing. From Boyle Heights to Venice in the City of LA (and Temple City, where residents want to block permanent supportive units on nearby County land), some residents are fighting badly needed homes that can help get our neighbors off of the streets. We need to ensure that local opposition to supportive housing doesn’t snatch defeat from victory.
It is too easy to stall, shrink and stop new housing
While we dodged Measure S’s ban on developments that need planning changes, many individual market rate and mixed-income housing developments in LA are still being slowed, shrunk or stopped. Abundant Housing LA is following and supporting several projects where local opposition is leading to delays or to proposed developments being reduced in size. This cuts the number of new homes and sometimes completely eliminates affordable units sought under density bonuses.
Community and specific plans are aiming too low
One good thing that came out of Measure S was a commitment by city leaders to speed up updates of old community plans. The City of LA is also working on transit neighborhood plans. Updated plans can potentially help expand the number and diversity of homes in LA. Plan updates can increase the number of new homes that can be built by “up-zoning” in the right places. More modern zoning with reduced parking and more realistic dimensional and design standards can also mean that more new developments can proceed without needing to seek variances, which slow down projects and can open them up to more lawsuits and political fights. As specific plans, transit plans can “pre-clear” developments in the area through the overall plan Environmental Impact Review- which means that individual projects won’t have to go though a lengthy environmental review.
Unfortunately, most plans that the city is currently updating or creating are aiming for too little new housing to make a significant dent in our housing shortage. Most community plans in the process of being updated provide just enough new space for anticipated population growth, but do little to address past under-building and LA’s existing housing crisis. There are also moves to continue piecemeal down-zoning of LA in places like Silverlake and Echo Park.
Policies are adding costs to building homes
California Governor Jerry Brown didn’t include an increase in funding for affordable housing in his 2017 budget because he wanted to first make sure that lawmakers would “cut the red tape, cut the delays, cut whatever expenses we can” that act as obstacles to new homes, especially below-market-rate homes.
Abundant Housing LA supports more funding and removing barriers. Locally, we are happy that the City of LA is seeking to raise more money for its affordable housing trust fund, but are concerned that the revenue source would be a $12/sf “linkage fee” on most new homes (and $5/sf fee on new commercial property). It is unclear what impact this fee will have on construction. It exempts multi-family units of 2 to 5 units, but we worry that the added cost will hurt the rest of the small and medium size residential market.
We think it is bad policy to load the costs of new affordable housing onto the tiny fraction of properties where new homes are being constructed rather than onto society as a whole. We have encouraged the city to consider raising funds in ways that don’t add costs to home-building, such as a parcel tax.
The housing crisis won’t fix itself
We don’t want to overemphasize these warning signs. We also see some positive trends including numerous state bills to address housing issues, legalization of ADUs in more places, a wider embrace of the YIMBY label, upcoming plan updates, etc. It is clear, however, that the housing crisis won’t fix itself. We haven’t yet turned the corner to becoming a city and region that fully welcomes more homes.
[This article was originally published on the blog Abundant Housing LA.]