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Volume XXX No. 3 April 2018

LA County Proposing planningreport.com A ‘Transformative’ Stormwater Plan INSIDE:

Inside Planning 2–3 Pending Legislation 4–5 LA Groups Oppose SB 827 Cynthia Strathmann & Denny Zane 6 SB 827 Amendments Sen. Scott Wiener 7 MIR Insert SB 831 Aims to Increase ADUs Sen. Bob Wieckowski 11

Mark Pestrella, now in his second year as Director of the LA County Dept. of Public Works, has brought broad vision to the regional agency. Now, he shares an update on the county’s priorities, namely, a proposed climate resilient funding plan for stormwater infrastructure that would both invest in innovative ideas and improve LA’s existing capture/storage Mark Pestrella system. The proposal will appear on the LA County ballot, and has been called crucial to the LA River revitalization—another project Pestrella unpacks in this special TPR interview.

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he LA County Public Works has begun taking community input on its Safe, Clean Water infrastructure program. Could you share the program’s goals?

Mark Pestrella: It’s an exciting day for us to finally bring forth this innovaLA’s Local Failure tive infrastructure program proposal. We are proud to sponsor this program on ADUs to improve the water resiliency of LA Carlyle W. Hall County by increasing our stormwater 11 capture portfolio. Future of Retail Our goal is to improve and optimize Larry Kosmont the county’s existing flood protection 11 and water conservation systems through a capital improvement program for new LA-Más on ADU infrastructure. Some of that infrastrucPilot & Financing ture will be in the old style, where we Helen Leung capture water in large ponds that infilBack Page trate it into the ground, and others will be newer ideas like Green Streets, where we use biological treatment methods to capture, clean, and conserve water

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Applying SB 35 & Testing the Promise of Ministerial CEQA Review

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In 2017, the California Legislature s an attorney with Holland & passed a package of 15 housing reKnight, you represent the first lated bills. SB 35, authored by Sen. development project to apply Scott Wiener, was signed into law for streamlined approval through SB with the intent of increasing by-right 35. This project—in Berkeley, CA—is development and making perhaps a case study in unincities more accountable to tended consequences. Brief us meeting regional housing on the case. needs. Jennifer Hernandez of Holland & Knight, an exJennifer Hernandez: The proppert in land-use, has filed the erty is a sizeable parking lot on first-ever SB 35 application Berkeley’s Fourth Street, which entitling a “by-right” apis an organically grown shopping proval for a 260-unit project destination with an increasing in Berkeley. Speaking with Jennifer Hernandez number of residential units. It’s a TPR, Hernandez outlines great site for retail and residential, the impact of SB 35. She also com- and indeed, it has a General Plan and zoning ments on the need for CEQA reform designation for mixed-use. and the potential of housing legislation in this session. Continued on page 10

UCLA’s Michael Storper on Squaring Urbanism and Density

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In this exclusive TPR interview, pdate our readers on your Michael Storper—accomplished ecoresearch at UCLA since your nomic geographer, director of UCLA 2015 book, The Rise and Fall Luskin’s Global Public Affairs pro- of Urban Economies. gram, and one of the world’s most cited social scientists— Michael Storper: As an ecobreaks from supposed UCLA nomic geographer, my field Planning doctrine on SB 827. deals with how landscapes are Storper is critical of the turn shaped by where people and in the urban planning field economic activity go, and how toward simplistic, Laffereconomies evolve and change esque supply-side economics. over time. I bring a large-scale Critiquing the “one-sizeperspective to the Planning fits-all” priorities of today’s Michael Storper Department—seeing indiTOD urbanism, he casts vidual cities and regions in the doubt on the notion that merely adding context of a national, and even global, density—unaccompanied by targeted landscape of people, firms, information, policies to prevent displacement—will benefit the majority of urban residents. Continued on page 8


2 The Planning Report April 2018

Around the County and Region PEOPLE/BRIEFLY

TPR

Bonnie Reiss, a senior advisor to Gov. Schwarzenegger, has died at 62. Reiss served as California’s education secretary, then as a regent for the University of California, and directed the USC Schwarzenegger Institute. Lisa Watson, who led the Downtown Women’s Center from 2000-2014, will return as interim CEO during the search to replace Anne Miskey, who is now CEO of Union Station Homeless Services. In Watson’s first tenure, she oversaw major organizational growth and spearheaded a $35-million capital campaign resulting in the opening of a second location and a Women’s Health Clinic in Skid Row. L.A. Clippers Chair Steve Ballmer and his wife, Connie Ballmer, have made a gift to Los Angeles’s Department of Recreation and Parks Foundation to renovate hundreds of public basketball courts across the city over the next three years. The department had determined that more than 340 basketball courts in the city are out of use due to deterioration. Civil rights leader, Munger Tolles Partner, and former U.S. Ambassador Vilma Martinez has stepped down as president of the Los Angeles Harbor Commission, where she served for five years. In her place, Mayor Garcetti has named Jaime L. Lee. Lee has served as Board President and commissioner on the Los Angeles City Employees’ Retirement System Board for the past four years. Los Angeles has the most solar power installed of any city in America, according to a new report by the Environment California Research & Policy Center. That conclusion comes in the wake of a 44 percent increase in solar capacity over the last year, as well as a new 2.21 megawatt solar installation on the South Hall roof of the Los Angeles Convention Center. The 349.3 total megawatts of installed local power in Los Angeles is enough to power 82,500 homes.

In his fifth State of the City Address, Los Angeles Mayor Eric Garcetti announced his budget would commit $20 million for emergency shelters to help get people out of encampments, part of an overall increase in homelessness spending supported by Measures HHH and H. Mayor Garcetti also appointed Christina Miller as Senior Project Manager for Homelessness Strategies. Miller previously worked on homelessness strategies for Los Angeles World Airports. The cost of buying a home in the San Fernando Valley hit a new record-high, according to a new report from the Southland Regional Association of Realtors. A typical Valley home now runs buyers $700,000 as of February 2018—a price 16.7 percent higher than last year. Just 958 homes across the entire San Fernando Valley, whose population approaches 2 million, were on the market in February. The Los Angeles World Airports Board of Commissioners voted to award a $4.9 billion, 30-year contract for the planned automated people mover at LAX to a consortium of seven contractors known as LAX Integrated Express Solutions, or LINXS. City Council must still approve the contract. Construction has begun on the Rampart Mint, a $12.3 million affordable housing project from the West Hollywood Community Housing Corporation. The development will include 23 units of homeless and low-income housing. An earthquake early warning system could become available to Angelenos as a smartphone app by the end of this year. The app, developed by a partnership of the U.S. Geological Survey (USGS) and Santa Monica-based firm Early Warning Labs, could alert users up to to 60 seconds before an earthquake. Continued on page 25

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Around the County and Region

3 The Planning Report April 2018

NOTES CALIFORNIA STATE

Early Use of SB 35 in San Francisco As projects throughout the state begin to utilize SB 35, a project slated for San Francisco’s Mission District will make 50 percent of units affordable in exchange for skipping expensive and lengthy environmental reviews.The 130-unit family housing project proposed expects to see the entitlement process shortened by six months to one year. MWD Votes to Back Two-Tunnel WaterFix The Metropolitan Water District—Southern California’s biggest water supplier—has voted to support the a plan for two Delta tunnels. After Governor Brown wrote a letter urging support, more than 60% of the board voted to approve up to $10.8 billion in contributions to the full two-tunnel project. Los Angeles and San Diego representatives did not support the proposal, on both the grounds of unequitable financial burdens and environmental impacts. The vote authorizes MWD to fund roughly two-thirds of the full tunnel project, but it doesn’t irrevocably bind the board. The board could pull back if permitting issues force changes in the project. MWD has projected that investing roughly $11 billion in the tunnels would raise residential rates by $60 a year. Opponents contend the increase could be far greater. SOUTHERN CALIFORNIA REGION

SANDAG 2050 Regional Plan Decertified The San Diego Association of Governments has settled a lawsuit in the California Supreme Court over its treatment of climate issues in long-range planning. The 2050 Regional Transportation Plan for San Diego has been decertified, and SANDAG will pay $1.7 million in legal fees to the Cleveland National Forest Foundation, the Sierra Club, and the Center for Biological Diversity, among other enviornmental groups. The move came after the Supreme Court

overturned the plan’s study on greenhouse gas emissions, and upheld appellate rulings against SANDAG on other parts of the plan. San Diego General Plan Tackles Wildfires In compliance with state law, the city of San Diego will add a new section on wildfire planning to its General Plan. Policies and guidelines will cover brush management, use of fire-resistant building materials, and more fire prevention measures, particularly targeting residential areas adjacent to canyons or undeveloped wilderness. After approval by the state Board of Forestry and Fire Protections in January, the new policies were approved by the city’s Planning Commission and will be heard by City Council in the spring. CITY AND COUNTY OF LOS ANGELES

LA Metro to Redesign Bus Network In an attempt to reverse a dramatic drop in bus ridership, LA Metro is studying ways to reconfigure its entire bus network for the first time since the early 1990s. The NextGen bus study will “think beyond the basic bus” to adapt to modern travel practices and preferences, the agency says. It will consider ways to make bus travel less confusing and speed up service, such as through bus-only lanes or even street reengineering. Metro will conduct two years of outreach and research, with a draft plan released about halfway through, before launching its eventual new system at the end of 2019. Brookfield Launches Bunker Hill Renovation In hopes of revitalizing the underperforming Wells Fargo Center on Grand Avenue, Brookfield has launched a $60-million renovation of the atrium that will be called Halo. The redesign will focus on improving connectivity and indoor-outdoor tenant amenity space. Brookfield, which is the largest commercial office landlord in Downtown Los Angeles, announced plans last year to construct a high-rise tower behind the Figat7th shopping center.

LA Metro Considers MicroTransit Pilots The Metro Board of Directors will consider contracts totaling just under $1 million with three firms to plan and design the agency’s much-anticipated MicroTransit Pilot to solve first and last-mile transportation challenges. The proposed on-demand service line will allow Metro to transport customers on-demand and outside of fixed routes. Metro staff is recommending to partner with three Contractor Teams: RideCo, NoMad Transit and Transdev, to produce studies on how this new service will work. Metro staff anticipates the launch of the on-demand MicroTransit service in 2019. This project is included in the Board approved 28x28 list of projects. LADOT to Expand DASH Bus Service The Los Angeles Department of Transportation is proposing 10 new routes for DASH buses to begin in 2019, mostly in the San Fernando Valley and Northeast LA. Along with rerouting DASH buses to larger streets, the improvements would bring additional service to areas like North Hollywood, Boyle Heights, Pacoima, Sylmar, Canoga Park, and Elysian Valley. Expansion of the Downtown DASH F line would also bring additional service to the Arts District. DASH rides cost 35 cents with a TAP card or 50 cents cash; the service is largely targeted to local trips for senior citizens. LA City Targets 6 Streets for Vision Zero Los Angeles City Council approved extensive remodeling of six major streets with high rates of fatal traffic crashes. As models for integrated Vision Zero planning, the thoroughfares—which include Temple Street, Venice Boulevard, and Reseda Boulevard— will get new traffic signals with priority for pedestrians; more visible crosswalks; resurfacing; and green improvements, like permeable sidewalks to facilitate stormwater capture. The safety improvements are part of the city’s Vision Zero target of ending all traffic deaths by 2025. Construction on all six streets is expected to be completed in 2019. NOTES continues on page 23


4 The Planning Report

Pending Legislation & Policies City and County of Los Angeles

April 2018 Issue No. 1

Issue No. 2

Probability of Adoption and Relative Significance

Judge: Cities Must Provide Shelter Before Criminalizing Homeless A federal judge is considering barring local governments from destroying homeless encampments under anticamping laws if they do not create shelters for the dispelled residents. The warning came as part of a case against Orange County brought by homeless advocates seeking to end encampment sweeps. Due to strong opposition from residents, Orange County cities have struggled to find sites for even temporary homeless shelters, yet have continued to issue citations and arrests to homeless people living outside. Giving people without homes no alternative to violating the law amounts to “citing them for simply being homeless,” the judge said.

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LA Weighs Dewatering Fees for Stormwater Capture After the city of Palo Alto established a “dewatering fee” for the impacts and use of the public storm drain system, the city of Los Angeles is assessing the potential for a dewatering fee to improve groundwater recharge and stormwater recycling. Assessing dewatering activities associated with construction and land movement, the city has asked the Bureau of Engineering, and Bureau of Sanitation; and the Los Angeles Department of Water and Power to report back on the possibility of a dewatering fee.

Issue No. 4

LA to Vote on Mixed-Use Project in San Fernando Valley In Van Nuys, Ketter Construction has proposed a mixeduse, 174-unit apartment complex for the old Van Nuys Plaza. The project would be a six-story mixed-use building, including 10 low-income units. The project has received the support of the Van Nuys Neighborhood Council. The project site currently has a parking lot and three vacant commercial buildings along Van Nuys Boulevard formerly occupied by a grocery store and WSS Shoes. If the project gets approved, work is expected to begin in the fall of 2018 and be completed in about 15 months.

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5 The Planning Report April 2018

Probability of Adoption and Relative Significance

Downtown LA’s Arts District Seeks Its Own BID With some of the most exciting and expensive development projects occurring in the small neighborhood on the eastern edge of Downtown, the city is proposing to create the Arts District Los Angeles Property Business Improvement District (BID). After a number of years to develop land use and design criteria to ensure the character of the Arts District architecture, the BID has actively engaging in improving multi-modal transportation and street improvements.

Issue No. 3

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Proposed Tax Breaks for ‘Missing Middle’ Housing Assemblymember David Chiu has introduced a bill aimed at creating more workforce housing near jobs. AB 3152 would create property tax exemptions for non-profit housing developers to build homes in high-cost areas that are rented at a discount to people with moderate incomes. Subsidies and tax credits do not currently exist in California for private developers to build middle-income housing; there are tax breaks available for low-income housing developments, and for public agencies building on public land. The bill is co-sponsored by the Non-Profit Housing Association of Northern California, and is currently in the Assembly Revenue and Taxation Committee.

Issue No. 1

‘Big 11’ Mayors Back Funding Homelessness Solutions Emboldened by a press conference in Sacramento that featured the Big 11 California Mayors—a bipartisan group of mayors from the 11 largest cities in the state—standing in support of AB 3171, one of the Legislature’s strongest homelessness bills would provide $1.5 billion in flexible grants to cities from the state budget surplus to use in the fight against homelessness. Authored by Asm. Phil Ting (D-San Francisco), AB 3171 is one of many bills in the 2018 session that aims to commit surplus budget funds to needed social services.

Issue No. 2

Ballot Measures Compete for Prop 13 Reform A measure to expand Prop 13 benefits for seniors has qualified for the November ballot. Backed by the California Association of Realtors, the measure would allow seniors keep their current tax rates when moving anywhere in the state, in many cases. Its goal is to remove the incentive for seniors to stay in their homes for longer in order to retain their tax benefits, a phenomenon cited as one contributor to a housing supply shortage. Meanwhile, a proposal to increase commercial property taxes through a change to Prop 13 was pushed to 2020. The measure would separate business from residential properties— known as “splitting the roll”—in order to tax commercial properties at market rate without affecting residential. Supporters, including the California chapters of the League of Women Voters and the Advancement Project, believe that closing the “property tax loophole” would raise $11 billion annually for schools and governments services.

Issue No. 3

Wiener Bill Could Force More Housing Construction SB 828, authored by Sen. Scott Wiener, would require cities and counties to rezone land in their communities to permit many more homes than are currently in their plans. This bill would only target cities that are not meeting their Regional Housing Needs Assessment (RHNA). However, almost all California cities are short housing units in comparison to their announced RHNAtarget.

Issue No. 4

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Housing

6 The Planning Report April 2018

‘If SB 827 Were Law When LA County’s Rail Measure was on the Ballot, It Would Have Lost!’ - Denny Zane Despite its stated goals of promoting transit-oriented development and improving affordability through dense new housing supply, nearly every housing justice organization in California has vehemently opposed SB 827. To unpack the impacts of the bill, TPR turned to two experts on transit and development:

“SB 827 would be a state preemption over many of the things that residents of South and Southeast Los Angeles worked really hard to include in their community plans. That makes us really concerned.” –Cynthia Strathmann, Strategic Actions for a Just Economy

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enny, as founder and executive director of Move LA and a longtime proponent of transit investment, what is your perspective on Sen. Wiener’s SB 827? Denny Zane: The stated objective of expanding our supply of affordable housing, especially near transit, is one that Move LA strongly supports. Low-income households are the core ridership for our bus system, as well as our rail system. The question Cynthia Strathmann is whether SB 827 actually helps that goal or hurts it. I think there are a lot of potential unintended consequences of this bill that demand a much more thorough examination. The biggest concern is that when you effectively upzone existing residential communities, you make it very likely that developers will build on sites where there is already existing housing. In fact, since there’s not much vacant land in these areas, nearly every new development there might require the loss of an existing home—and the displacement of the people who live in it. And frankly, those residents are far more likely to be transit users than the occupants of the new market-rate housing. So, I’m not sure that SB 827 will actually achieve its stated goals; it may in fact hurt them. Cynthia, as executive director of Strategic Actions for a Just Economy (SAJE), your work focuses on tenant rights, equitable development, and healthy housing in South LA. Do you believe SB 827 supports those goals? Cynthia Strathmann: I agree with Denny that this bill is not the best way

Denny Zane, leading advocate for active transportation, former mayor of Santa Monica, and executive director of Move LA; and Cynthia Strathmann, executive director of Strategic Actions for a Just Economy (SAJE), a long-standing non-profit for equitable development and tenant rights in South Los Angeles.

to meet the goal of increasing affordable housing. SAJE, like many other tenant rights groups, has been a proponent of building more housing along transit lines in a thoughtful way. We need to make sure that we’re building the right housing for the right people in the right places. The city of Los Angeles has been meeting its goals for the construction of market-rate housing. It is not meeting its goals for affordable housing. Housing that ordinary people can afford—whether it’s covenanted or naturally occurring—is what’s in short supply right now. We need

“I’m not sure that SB 827 will actually achieve its stated goals; it may in fact hurt them.” —Denny Zane, MoveLA

to preserve as much of that as we can, while simultaneously producing more affordable housing. The danger with SB 827 is that there is no mandatory affordability or preservation component. We feel very strongly that allowing upzoning without these protections would incentivize the construction of a lot of luxury housing. And as Denny mentioned, that would exacerbate displacement pressures for low-income residents who use transit a lot, while not producing any housing that would actually make them more housing-secure.

Elaborate on the People’s Plan for South LA that SAJE was instrumental in advancing. How is its agenda more constructive than that of SB 827? Cynthia Strathmann: The city of Los Angeles is redoing its community plans, which dictate the rules and regulations around building in a particular area. SAJE was part of a coalition that worked for nearly 10 years on the South and Southeast LA community plans, which cover more than 500,000 people, and we succeeded in getting in requirements for affordable housing and green space. It is a holistic, comprehensive approach to development here, based in community input, that supports the efforts of lowerincome communities of color to stay in Los Angeles, near transit, in the neighborhoods that they’re familiar with. SB 827 would be a state preemption over many of the things that residents of South and Southeast Los Angeles worked really hard to include in their community plans. That makes us really concerned. There are thoughtful efforts underway to ensure that planning and development are done in a way that doesn’t displace people while still encouraging housing production, and SB 827 could really undermine those efforts. Denny, Move LA is advancing a new financing mechanism called NIFTI-2 districts to address the need for more affordable housing. Fill our readers in on that agenda. Denny Zane: Historically, one of the best tools for creating affordable housing in our urban areas has been tax-increment financing, which CRA’s used to provide. We think recreating a tax-increment financing tool near transit would be a very good way to provide the resources to build more affordable housing. And SB 961, authored by Senator Ben Allen,

Continued on page 20

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Sen. Scott Wiener on SB 827 & His Upzoning Agenda

At a recent Building Industry Assocation event, SF. State Senator Scott Wiener addressed SB 827, the transit/up-zoning bill that has stirred much conversation in the California planning and real estate community. Wiener spoke to the genesis of the bill

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cott Wiener: When I was elected to the state Senate, some of my critics in San Francisco were happy because they thought I couldn’t mess with land use anymore. They thought the state wouldn’t do anything on housing or land use. But of course, I believe that the state does need to do more on housing. When it comes to critically important issues to our state, such as public education or health care, we would never say that cities should have pure local Scott Wiener control. We recognize that the state sets basic standards for local control on these issues. Housing is the exception. It’s a weird anomaly, because there are very few things more foundational to our success than housing. Housing is key, yet we have taken the position in California that it is a purely local issue. As a result, we’ve had some communities that produce housing, and plenty of communities that produce little or no housing. For a long time, we muddled through like this. But it has led to the megasprawl we have in both Northern and Southern California today. Over the last 50 years, we have methodically developed what I call a “housing-last” policy in California, where housing is considered a blight, a problem, and a negative environmental impact. Cities have dramatically downzoned—like the mid-1980s downzoning of LA, which reduced its housing capacity by about 50 percent. San Francisco also went through dramatic downzoning in the 1970s. Additionally, we have created process after process and obstacle after obstacle such that it now takes years

The Planning Report April 2018

and the amendments resulting from conversations with critical stakeholders. The author of last year’s SB 35 and a number of other housing bills this session, Sen. Wiener also engaged in a Q&A related to the challenges of upzoning the State.

to approve even projects that comply with zoning. The chickens have come home to roost. We can’t muddle through anymore. We have constricted supply so dramatically that young middle-class families cannot stay in an increasing number of cities. You now have to make a choice between having kids or having a long commute. Last year, we took the first meaningful step in asserting that there is a role for the state in housing. One thing we focused on was affordable housing. Since the

“The gist of SB 827 is that, within a half-mile of a subway station, or a quarter-mile from a high-frequency bus stop, cities can’t limit density or heights below a certain point.” —Sen. Scott Wiener elimination of redevelopment, the state has been a negative force for affordable housing. We established several new funding streams. That work is not done, but it was a good first step. The second step was to improve the process for housing. We passed SB 35 to streamline approvals in cities that are not meeting their RHNA goals. We also strengthened the Housing Accountability Act, which limits arbitrary rejections or downsizing of projects, and closes some loopholes in the Housing Element process.

Many critics have made me out to be anti-local government. No. I am a former local elected official. I know that local government officials are overwhelmingly fantastic people who are giving of themselves to the community. But they have a hard job. They might know a project is a good one, but their constituents hate it. What are they to do? Other critics have told me to wait some time to let the bills we’ve recently passed “settle in.” But we know that last year was just the beginning, not the end, and there are a number of good housing bills in the hopper this year. One is SB 827, which follows a basic concept: We should allow more housing near public transportation throughout the state. We have transit-rich areas with hyperlow-density zoning, and that is not sustainable. It pushes people away from transit and forces people to drive, which gridlocks our freeways, increases carbon emissions. We want more people to be able to live near transit. The gist of the bill is that within half a mile of a subway station, or a quarter mile from a high-frequency bus stop, cities can’t limit density or push height below a certain point. It also eliminates parking minimums. We’ve recently made some amendments about [nonmandatory] anti-displacement protections. We borrowed these protections from Los Angeles, and they have been described as the strongest anti-displacement protections ever adopted. They require relocation assistance and a right of return at the same rent. Despite some cynical misrepresentations, SB 827 does not in any way change the approval process. The process that exists today will exist after SB 827, whether it’s a streamlined process under SB 35 or a CEQA Conditional Use process under normal local control. The bill also defers to local demolition conContinued on page 19

“Over the last 50 years, we have methodically developed what I call a ‘housinglast’ policy in California, where housing is considered a blight, a problem, and a negative environmental impact.” -State Sen. Scott Wiener (San Francisco)

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8 The Planning Report April 2018

“Some people believe that more density, in and of itself, will give us the benefits we need. They tend to advocate broad authorization of density, especially near transit corridors. I’m not convinced of that approach. I think that more housing density alone can actually have contradictory effects on cities.” -Michael Storper, UCLA Luskin School of Public Affairs

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Storper: Housing Density Splits Planning Profession

Storper:‘Naïve’ toThinkTOD Helps Housing Affordability

Continued from page 1

Continued from page 8

and money moving around and changing the face of regional economies. The book looked at the two big California metro regions in the context of broader economic changes over the last 40 years. We were interested in how, even though there are a great number of similarities between the Bay Area and Southern California—both part of California, both high-tech places, and both young metropolitan areas—they’ve gone down really different pathways in recent decades. The book suggests that these differences in economic activity are shaped by a “new economy,” driven by globalization and technological change. Elaborate on the pathways that San Francisco and Los Angeles’s regional economies have taken over the last 40 years. At the beginning of the 20th century, Southern California was relatively small, and not a significant player in the national economy. But between 1910 and 1970, we multiplied our population 21 times over—and did so with high-quality growth. LA moved up the ranks of U.S. metropolitan regions in terms of the level of per capita income for its people. It was a spectacular case of becoming both bigger and wealthier. In fact, at that time, the greater LA metropolitan area was probably the most successful in America, and maybe the world. The Bay Area, too, was a wealthy metropolitan area, having developed during the Gold Rush. By 1970, the Bay Area was No. 1 in the nation in terms of per-capita income, and LA was No. 4. That is really an insignificant difference: any member of that elite club is doing just fine. But over the next several decades, we parted company. What happened in the 1970s and ’80s, of course, is that the economy changed. We went from an economy based on manufacturing, mechanical engineering, and a national stage, to an economy based on technology, finance, biotech, and a more open, global stage.

In that picture, Southern California did poorly. Our per-capita income dropped from No. 4 to No. 25 among large metro areas. The Bay Area, by contrast, was No. 1 in 1970, and remains No. 1 today. To d a y, h o u s i n g s u p p l y a n d affordability are increasingly challenging California’s coastal cities. How significant is this issue for regional economic growth? My starting point when thinking about housing is, again, a broader perspective.

“Without inclusiveness policies, the more density you create—especially linked to transit—the more displacement you’ll get.” —Michael Storper

There is a deep structural background to the 21st century housing crisis; it is related to forces in the economy that are driving talent, wealth, and population into big metropolitan areas, such as those in California, more than ever before. Nationwide, we’re in a strong process of creating a smaller number of bigger, higher-income metropolitan areas—what we might call superstar metropolitan areas. Moreover, we are in an economy of growing income inequality, even within successful metropolitan areas. That’s the shape of the 21st century economy, and the backdrop to the housing crisis. Despite ranking below the Bay Area, Los Angeles is a superstar metropolitan area. Here, the scenarios of population pressure and income inequality intersect with the planning and zoning rules

we’ve inherited from other periods, and with neighborhood pressures about urban change. When you put all that together, it’s a pretty explosive cocktail. Are there urban planning principles that could be applied to help defuse that cocktail and guide leadership going forward? One starting point is the debate over how much you can achieve simply by expanding the supply of housing. Most people in planning agree that we need more housing to accommodate the role that cities play in the 21st century economy, and that we’re hamstrung by old rules. That’s especially true here in Southern California, which grew up around an ideal of low density that doesn’t really match the way that cities work today—or even the way that increasing numbers of people want to live. If we agree that we need more housing, and that the way to get it is through higher densities, then the next question is: How do we concretely incorporate housing density into the planning process? And what can we expect from doing so? Here is where I think there is a split in the planning profession. Some people believe that more density, in and of itself, will give us the benefits we need. They tend to advocate broad authorization of density, especially near transit corridors. I’m not convinced of that approach. I think that more housing density alone can actually have contradictory effects on cities. It affects where people live within the metro area; it affects who lives in the new housing; it affects how the metro area grows as a whole—that is, how much population growth it gets; and it affects affordability and inclusion. It’s like a four-dimensional puzzle—putting all those pieces together, you can get a lot of different answers. The likely outcome of authorizing density in transit corridors is not that density will be added to all transit corridors in all parts of the region, but that Continued on page 9

it will be added specifically to the most desirable corridors. And of course, by adding more transit and density, you make those areas even more attractive. That leads to the next question: who these dense, transit-adjacent areas will be attractive to. The answer is the top 30-40 percent of the wage-earning population—the people trying to get into metro areas nationwide. This educated and skilled part of the workforce are going to see benefits—better and better-located housing—as they shift into new high-density corridors. But it’s naïve to think that this approach will help the bottom 60 percent

these higher-income people of lowerincome people. With more density, superstar metro areas will become even more attractive to skilled people, both domestically and internationally. That means these regions, already facing population pressure, will see more accelerated population growth of high-wage earners into newly densified transit corridors. That leads to the fourth piece of the puzzle: affordability, inclusion, and displacement. Adding up all these factors, you can see that density alone is likely to increase displacement. You see, there’s another part to our

half the market rate is going to have any chance of dealing with displacement in a meaningful way. Asserting that density alone won’t help must be professionally difficult at UCLA’s planning school, where a group of professors recently concluded that new housing supply is the answer to the housing crisis and will not displace longtime residents in Los Angeles. Is there a schism on public policy within the academy? Some argue that the areas where density is in high demand today are already high-income—so, little displacement

9 The Planning Report April 2018

“Without targeted inclusiveness policies, the more density you create— especially linked to transit— the more displacement you’ll get. ” -Michael Storper, UCLA Luskin School of Public Affairs

This San Francisco building would not be permitted today, but would be under SB 827.

of wage earners in an area like Southern California. It’s worth pointing out that some of the areas that will gain density will already be expensive—areas where land prices are already high— and some will be newly gentrifying areas. Here in LA, that includes places like the Crenshaw corridor—a prime target for gentrification through density. Superstar metropolitan areas like LA are increasingly composed of highskilled, high-income, highly educated people. This has led to an explosion in rents and housing prices, and a lot of people getting less housing than they need. Lots of incomes are going to homeowners and landlords. And there is, of course, a lot of displacement by

economy, which is that a lot of people in big cities are earning modest wages— and nowhere more so than in LA. Los Angeles has a lower proportion of college-educated people than comparable metro areas like Washington, Boston, San Francisco, or New York. We are a very high-cost metropolitan area with a lot of people on moderate incomes. Density alone won’t help them. But targeted housing policies will. The point that I really want to make is this: If you look at the bigger picture of economics and metropolitan growth, you’ll see that we need aggressive, ambitious policies aimed at, not just increasing housing density, but also inclusivity. No policy that doesn’t offer a substantial set-aside of housing at about

would occur. They’re right that areas on the Westside of Los Angeles, for example, could probably accommodate more density and population without directly causing displacement. But how this changes the shape of the city needs to be considered. There’s an outflow from high-income areas like West LA of people who can’t afford to live there anymore. That’s a form of displacement. They’re moving to areas like Mid-City, Hollywood, Downtown, and others, which are already facing population pressure and will likely see displacement. Without targeted inclusiveness policies, the more density you create—especially linked to transit—the more displacement you’ll get. History tells Continued on page 21

TPR


10 The Planning Report April 2018

“The real opportunity of SB 35 is in highcost coastal communities that have traditionally been resistant to multifamily and higherdensity housing.” -Jennifer Hernandez, Holland & Knight

TPR

Hernandez: SB35MeanstoCreateMoreAffordableHousing Continued from page 1 The site is also close to Berkeley’s origi-

nal shoreline, and was for many years was thought to be the site of a shell mound—a place where the Ohlone tribe lived and gathered oyster and other shellfish, and also buried their ancestors. However, the existence of the shell mound had never been confirmed. The project applicant went through the CEQA process and did a ton of studies under the supervision of academic and Ohlone experts, including a lot of very costly subsurface testing, which ultimately determined that the rumored shell mound did not exist. The site had been a marsh of bay mud, and was filled around 1900. Unfortunately, the site is still very controversial. As is often the case with infill sites, passions run very high. There is a very strong group of opponents to any development on this parking lot. They now assert that, even in the absence of a shell mound, it is a sacred site, and they’ve held prayer ceremonies there for the last few years. What is required of a developer in order to qualify for the expedited project approval process under SB 35? Under SB 35, projects that meet qualifying criteria—which are stringent—are entitled to approval in 180 days, without further CEQA review, and without votes by either the Planning Commission or the City Council. It is a ministerial, over-the-counter, staff-level project approval. Now, SB 35 has some tough criteria. First, the site has to conform to the local zoning or General Plan requirements, and to comply with all objective zoning standards. It’s worth noting that this approach respects the decision of the local elected and community leaders who came up with those plans and designations. Importantly, the project also has to pay its construction workforce prevailing wage and use skilled and trained workers, which is a costly requirement. The part of SB 35 that most dramatically shifted this project’s direction is the affordable housing requirement. Under Berkeley’s local inclusionary housing ordinance, the project would have delivered 13 affordable housing units of the total 260. But in order to use SB 35 in Berkeley, half of a project’s units must be affordable. So

instead of 13 affordable housing units, this project would deliver 130. That is a huge increase in the city’s affordable housing stock, and one that Senator Wiener—the author of SB 35—is very pleased about. Berkeley, like most coastal communities, has fallen woefully short in its production of housing, especially affordable housing, so the need for that housing is critical. What issues have arisen from your client’s test of SB 35 in Berkeley? This was the first project in the state to apply for approval under SB 35, which went into effect in January 2017. Berkeley, like most cities, does not yet have a process in place for reviewing SB 35 applications, but they are moving forward with deliberate speed. The mayor says that the city will comply with all applicable state and other legal requirements in processing the project, and we’re pleased with that commitment, since there has been some local resistance to the legislation. The biggest issue so far has been making the economics work for a project that has both prevailing wage and 50 percent affordable housing. I was skeptical that we would find such projects at all. But on Fourth Street, the high-rent residential and commercial retail market conditions allowed this project to completely reconstitute itself as 50 percent affordable. The issue of using prevailing wage was asked and answered some time ago. It has not been the unanticipated cost burden for this project that it is in many other markets, including, for example, parts of the LA region. Based on your experience in Berkeley, do you foresee opportunities for similar projects across coastal California to rely on SB 35? The good news is that General Plans were recently required to go through a Housing Element update process, which includes a mandate to accommodate additional housing units. In many jurisdictions, the zoning codes have not kept up with General Plan designations. SB 35 allows reliance on General Plan housing designations for that

reason, and I’m considering using this tool in several projects across the state that have a General Plan designation for housing, even if the zoning codes haven’t yet been updated. But in some cities, unfortunately, even General Plan designations have fallen behind. Because of the cost implications of prevailing wage and inclusionary housing requirements, I don’t see SB 35 as an effective tool in areas of the state with more marginal economics. The real opportunity, I think, is in high-cost coastal communities that have traditionally been resistant to multifamily and higher-density housing. They are now going to have to confront the reality of implementing their General Plans and delivering the housing that those plans call for. There appears to be a drumbeat in the infill housing community to go beyond SB 35, and to cede to the state the power to override local zoning in order to facilitate greater housing production. Is that drumbeat growing? That drumbeat is definitely upon us. Senator Wiener’s SB 827 is the most aggressive of these kinds of proposals to upzone, but Senator Bob Wieckowski’s legislation on accessory dwelling units (SB 229) also did that in a way, by allowing by-right granny units for single family homes. I’m concerned about any one-size-fits-all approach to all California communities. What I say to that is: Try it in your own city. Try it in your own county. Try it in your own region. Pilot it, and let’s all see what it looks like. But California is a hugely diverse state, and any one-size-fits-all solution for land use, planning, and zoning is likely to be troubled. I personally think that how much density you can put in a location is dependent on the extent to which people still have to own cars. In the inner ring of the BayArea—San Francisco, Berkeley, and Oakland—there is an underappreciation for the necessity of car ownership, particularly for low- and middleincome workers, who have to be physically present at their job to get paid. There are a lot of keyboard-economy workers on the coast who have more flexibility in terms Continued on page 22

Special TPR/MIR Insert

APRIL 2018

Metro Investment Report THE INSIDER’S GUIDE TO PUBLIC INVESTMENT IN THE REGION

Evidence of the Changing Face of Retail: LA’s Westside Pavilion Retail is experiencing an exciting generational adaptation. In March, Westside Pavilion announced a conversion to office space after losing anchor tenants. To provide context on how companies are adapting retail stores and cities are rethinking economic development strategies, MIR turns to Larry Kosmont of Kosmont Companies. Kosmont speaks to how the art of retailing— from design and leasLarry Kosmont ing to distribution and merchandising—are undergoing paradigm shifts that will lead to broader policy conversations about funding municipal services.

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www.metroinvestmentreport.com

Sen. Bob Wieckowski on His SB 831 and the Need for More ADUs

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enator, you are again carrying legAfter authoring a number of successful bills islation to incent the development on accessory dwelling units (ADUs) in preof more ADUs in California. Share vious legislative sessions, state Senator Bob Wieckowski of Fremont has brought Senate your motivation for taking state leaderBill 831, which aims to waive an array of ship on a matter traditionally left to local government. service fees and create an amnesty program for unpermitted ADUs. Bob Wieckowski: First and foreCities are likely to oppose SB 831 most, California cities have underas yet another attack by state govperformed or outright failed in crafternment on local control of land ing local ordinances and regulations use, as well as another taking by the that would spur the development of state of local fees that are needed ADUs. Going back 16 years, this is to fund local services that support not the first time that the state has affordable housing. In an exclusive urged cities to create ordinances to interview with MIR, Wieckowski Bob Wieckowski increase secondary units. justifies the Legislature’s encourOf the 485 cities with ADU ordiagement and empowerment of homeowners to construct ADUs, or bring nances on the books, I can think of only Santa them into compliance, as needed to address Cruz that has been consistently supportive the state’s housing supply crisis. Continued on page 16

Carlyle Hall on LA City Leaders’ Forfeiture of Local Authority Over ADU Permitting

t was announced in March that the Westside Pavilion—a longtime landmark of Los Angeles shopping—will be converted into mostly office space after losing its anchor department stores and the migration of customers to online For a counterperspective on state efforts n a 2016 op-ed in The Planning shopping. Put this transition into context. to streamline ADU regulations, MIR interReport, you wrote: “The city’s viewed noted land-use attorney Carlyle W. planning establishment appears Larry Kosmont: Even a decade ago, Hall to ascertain Los Angeles’s failure to willing to let LA’s neighborhoods sufwho could have thought that the Westside plan for and approve ADUs. Hall, fer the negative consequences Pavilion—what many of us called “retail founder of Los Angeles Neighbors of unwanted (and unstopground zero”—would have to be recast into in Action, previously led the citizen pable) second-unit developa totally different set of uses in order to be group that successfully sued to ment without first making an economically viable real-estate strategy? compel the city to follow its zonany meaningful effort to study That is exactly what is happening—and it ing standards for ADUs in singlealternatives and to formulate is emblematic of what is happening overall family residential areas. Now, Hall public policies that take into in the retail and consumer markets, where advocates for community plans account differing points of we have moved very quickly to a digitally that provide structure and build view.” Has anything changed connected society that gives people choices trust in local government as the Carlyle W. Hall since 2016, in your opinion? about where they go and what they buy. way to plan for ADUs. Hall also comments on the unremitting impacts of Carlyle Hall: The general scenario has Prop 13 on local government services and not changed. But the activity level has Continued on page 12 the next generation of homeowners. Continued on page 14

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Kosmont: LA Retail Needs Blend of Uses To Thrive

Continued from page 11

When it was built, we all saw the Westside Pavilion as a cutting-edge approach to retail. Now, we are facing the truth that retail has changed so much that unless we recast the Pavilion, it will not have a long-term future. Market forces are driving this project toward what the economy views as the demand today. What is the demand today? First, you have to create a sense of place and purpose for your uses. For workspaces, in order to attract millennial workers, this means becoming more collaborative and creative defined as open form workspace with a mix of social and entertainment aspects, Retail, likewise, has become a less competitive component of any real-estate strategy unless it too is part of an interactive destination.Whether you’re an aging member of the population or a millennial, we all have choices in how to buy our goods and services. Stores like Macy’s have to rethink how they can best attract their audiences. Look at other revitalized retail areas in the region, like Century City and the Santa Monica Place: they have recast themselves as entertainment-based destination spaces. Westside Pavilion had been left in the dust. Now, this new reinvestment program is an investment into the future—focusing on what I call a blend of uses. Success comes from getting the right blend of workspace, retail, and entertainment. Is the Westside Pavilion’s anticipated change of use an aberration? Or is it a reflection of the marketplace seeing a higher and better use for shopping malls in markets with high demand for housing and office space? It’s a little bit of both. I think this is reflective of what is going on throughout the country— the tipping point of retail has occurred. The country is well over-retailed; there is a lot of retail space in the U.S. Moreover, the millennial population has quickly embraced buying goods online. This combination is recasting how retail has to respond to the marketplace. If potential buyers are not making trips to shopping centers to make purchases, then retail per square foot declines rapidly. The problem we have to solve today is: How do we get people out from behind their computer screens and to the destination itself? That is what the Westside Pavilion has struggled with. Even though the Pavilion is located in the middle of

great demographics for shopping, those users now have choices to shop online or elsewhere. It is no longer simply an issue of mixed-use; it is about a blend of uses that creates the right balance to generate trips consistently. These uses could be workplace, educational, medical/ fitness, cultural, or residential. But you have to put your property in a position where it is the first thought when people need to make a trip. Otherwise, it will not be as competitive, and the sales per square foot will suffer. There is speculation that the Westside Pavilion site will be attractive to technology companies seeking flexible working space and access to transit. How do such factors play into how the market evaluates highest and best use of like properties? In Los Angeles, we are experiencing a redefinition of what is called the “100% corner.” If you were a real-estate developer back when the Westside Pavilion was built, you would view a location like Wilshire/Westwood as a “100% corner”, based on traffic. Traffic has been the defining element, but if you are a developer today, you’ll see the 100% corner is now shifting toward adjacency to transit—especially in dense areas. The Westside Pavilion picks up some of this benefit, as it has become a transitadjacent site to the Expo Line. The entire Westside of LA’s preference in site selection for development is being reset by the county’s $100+ billion investment in transit. We are seeing a market conversion to creative office space for technology and digital era companies, coupled with the desire to be as close to transit as possible. The average occupants in these projects are primarily millennial and creative workers who embrace ride sharing, shared workspace, and the broader applications of a “sharing” economy. Is it an emerging trend in California to repurpose shopping malls as housing? By example, developer Sand Hill Property Company has unveiled a new vision for a 55-acre failing mall in Northern California that invokes the new state law SB 35 to revitalize that retail into 2,400 units of housing and 400,000 square feet of mixed-use retail and entertainment. Is SB 35 a contributing incentive to this apparent trend toward retail reuse?

In California, we are seeing the state and the economy recognize the significance of meeting the housing demand. Using SB 35, and the 14 other laws that were passed in 2017, the state has prioritized housing as a cornerstone to the next generation of economic development. The 2017 housing bills are geared at tightening the regulations that prevented the construction of urban housing, or at trying to make it easier to develop housing by providing money or statutory clearances including relaxation of CEQA. By stick or by carrot, all the bills are focused on delivering housing projects. The Sand Hill project is the first in California that is applying SB 35 to a mall context. It allows for a much more permissive planning process in the transformation of retail to housing, as long as the project provides the sufficient amount of workforce and affordable units. For those of us in the local government sector (Kosmont Companies represents over 60 cities), the fear is that the state has now declared that housing is the primary economic issue. Because of the state’s proclamation, they are looking to erode local control on land-use approvals when it comes to housing. While we appreciate the State’s recent exuberance on housing, a balanced approach is needed. Representing those 60+ cities, you are well aware that converting retail space into housing means that sales-tax revenue necessary for local government services will decline. Moreover, housing itself is typically a net loss for city budgets. In light of those factors, how should cities consider developer proposals to convert housing to retail conversation? It’s a big question, because there are a lot of conflicting interests. One conflict is that we need sales tax, and therefore retail, because that is what supports the level of services for our residents. When you replace retail with residential, you take tax value away from the city. But the reality is that retail is going to shrink in most communities, and that sales are not going to take place nearly as often in physical stores. In other words, the entire equation of sales taxes as revenue generation for cities is at risk. It’s a given that a city needs tax-generating uses, such as office and retail. It’s also true that housing is a place for a job to sleep at night, yet a fundamental conflict is that many localities in the state that do not support a range of workforce housing solutions. And when demand is suppressed by Continued on page 13

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METRO INVESTMENT REPORT 13

Is Retail Malls-to-Housing A New Urban Econ. Strategy?

Continued from page 12

local land use bias against residential or just flat out exceeds supply, certain areas such as San Francisco will find themselves in the situation where companies are looking to locate in other places because workers cannot find adequate housing. As a former city manager, I believe that the economic models that show residential as a deficient contributor to the city’s budget overlook the fact that if you don’t have the proper balance between commercial and residential, you are in trouble. After all, workers need to sleep somewhere. So, while some city managers still believe that residential is poisonous to their budget stability, the state has come to the conclusion—and I believe the state might be right—that if we can’t keep younger middle-class workers because they can’t find affordable housing, then we lose. Other economies—in Colorado, Texas, or the Pacific Northwest—will win. At the end of the day, there is no simple answer. We cannot shove residential zoning down a city’s throat. Nor can a city just pursue sales tax anymore, because that equation no longer works. We are looking at reforming a number of different paradigms—parking requirements, blend of uses, and value capture—as a way to find solutions for economic development. The economic development model can no longer be about getting a Costco. It is now much more about creating a strategy that meets the priorities of a millennial cohort that consumes, communicates, and mobilizes differently than past generations. Our land-use policies and tax structures do not yet reflect this changing economy.

impacts the distribution of sales tax cannot penalize the cities that have high-spending populations with low retail footprints—because then consumers will move online even more. We also have to fix the connectivity between last-mile delivery sales and store sales in a way that improves distribution to all communities. As people’s consumption is becoming more delivery-oriented—that is, more serviceoriented—we need to expand the definition of sales tax to reflect that. It will be easier to fix those taxes than to fix property tax by amending Prop 13.

Is it possible for the state to adopt “housing as an economic development strategy” without first addressing Prop 13 and its unintended effects? Is Prop 13 still off the table for reform some four decades after passage, or is there a constituency ready to address it?

You’ve been a thought leader on how Enhanced Infrastructure Financing Districts (EIFDs) might herald the creation of more new tools for local economic development. How might EIFDs capture value from aging public spaces in need of repurposing?

I think Prop 13 will be politically off the table for a long time. The problem is that residential prices are so high. It’s hard to patch a balloon when it is swollen, and it’s a hard time to fix property tax rates when property values are so high—and getting higher. The individual financial exposure to a property tax rate change at these pricing levels is too frightening, and as a result I believe it will be political dynamite for the foreseeable future. I think a possible fix is on the sales tax side: We can support local government by reconfiguring the definition of the sales tax. The formula that

The other half of the “housing as economic development equation” is that the state has announced that sustainability and climate action is economic development. To that end, they have handed cities and counties a number of new tax-increment financing districts that I refer to as “sustainability and housing districts.” They are EIFDs, CRIAs, and a whole host of others geared at inducing private investment for sustainable economic development in communities.

“It is too early to say how we will solve our land-use and tax challenges to adapt to a new retail paradigm.” —Larry Kosmont

The output of that investment is to generate housing across all incomes, and clean economy jobs that are near transit. The goal is to reduce our footprint and increase economic productivity. Smart, zero-net-energy buildings are becoming more common everyday, and these buildings are taking advantage of tax-increment financing. If redevelopment agencies come back, they will come back in the shape and form of an EIFD. EIFDs and similar infrastructureoriented districts will proliferate and expand in their capacities over time. But overall, the state has written the prescription of sustainable growth to increasing housing supply, while utilizing private investment to enhance climate action strategies. The mantra is: achieve the green to get the green. Lastly, you spoke on the disruption of urban distribution systems on a VerdeXchange 2018 paneled titled “The Amazon Effect.” What should our readers expect to see in the evolution of urban retail in the coming year? Retail is reinventing itself. We are seeing all different types of realignments and disruption models. CVS is buying an insurance company; Amazon, JP Morgan, and Berkshire Hathaway are looking to disrupt healthcare. The alignments in retail are changing, and the purpose and function of the store is changing. We are seeing strategies like “click-andcollect” as a way to get people out the door. For example, Wal-Mart can use its 100,000 plus square feet retail stores located throughout California as last-mile delivery points. Essentially, they have built-in industrial last mile facilities where their own workers can deliver what we buy online to our homes when they get off their shifts. It’s a whole spectrum of realigning retail and industrial models, and it’s being driven by the goals of convenience and expedience. After all, our desire to immediately receive goods is not going to change. The explosion we are seeing in industrial is really an expansion of the retail floor. The consumer is demanding the good faster and more conveniently. It’s too early to say how we will solve our land-use and tax challenges to adapt to a new retail paradigm, but it’s not too early to think about policies that will help governments adapt and survive this tectonic shift in how the economy is MIR operating.


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Hall Indicts LA Electeds for Failure to Enforce ADU Rules

Continued from page 11

changed, because of some recent developments in state and city law. Previously, the city had, for all practical purposes, refused to follow its own ordinance on ADUs for about 10 years. The Planning Department and Department of Building & Safety were approving and issuing many permits that were unlawful under the city’s ordinance, and the court ordered them to stop that. That put the city in

That lasted only for about four months. Then a new state law kicked in, which told every city in the state that they had to make certain changes in their local ordinance if they wanted to retain local control over accessory dwelling units. Los Angeles, however, took the default position of doing nothing, causing the state law—which exercises much looser control over ADU buildout—to come into play. That

zoning and building standard. Consequently, our city has been following the default one-size-fits-all standard from the state. It’s frankly shocking that the planning establishment of a city like Los Angeles, which prides itself on being forward-looking and on top of things, has for more than a year done nothing to take back local control over ADU buildout.

Rendering of an ADU (photo by LA-Mas)

a position where it had to act: It had to either legalize the activity that had been illegal by changing the ordinance regulating ADUs, or it had to retain the law and start following it. That court ruling was at the beginning of 2016. In response, the Planning Commission and the City Council launched a series of hearings regarding the Planning Departments ADU proposal, culminating in the Council’s September 2017 action. It decided to keep the City’s existing local ordinance with the older, tighter, stricter standards that allowed fewer ADUs, while making sure that those ADUs are compatible with their surrounding neighborhoods.

kicked in on January 1. Meanwhile, the Planning Department’s proposed revised local ADU controls have languished in the PLUM Committee since last spring—approximately a year. In the same TPR piece, you criticized the city’s non-enforcement of planning rules, and shared your fears about a “one-size-fits-all” solution from the state Legislature to California’s housing challenges. Today, do your concerns persist? By doing nothing in response to the state law, Los Angeles has been essentially choosing to forfeit local control over ADU policies and practices—including the ability to have customized

This is symptomatic of a general inability of the city to use its planning and zoning powers in effective ways. Time after time, whether it’s ADUs or short-term rentals, the building and development community says what it wants to do, and the city’s planning establishment rolls over and plays dead. The mayor, the Planning Department, and Planning Commission talk a big game, but they have been very ineffective in dealing with these problems. They talk about doing something about our terrible housing crisis, but what are they doing about it? They’re not doing enough; actually, they’re doing very little. Rather than using the powers they have, they are repeatedly taking Continued on page 15

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15 METRO INVESTMENT REPORT

Carlyle Hall: California’s Prop 13 Contributes to Inequality Continued from page 14

a weak-kneed approach and trying to shift the blame onto others.

ers bills on the table that would override local control of urban planning?

As a former “liberal lion” of the legal profession in Los Angeles, how do you believe a city or region ought to address the challenges of housing unaffordability and lack of supply?

I hope the city does not forfeit control over its local jurisdiction and the buildout of their city to SB 827, which takes a truly draconian one-size-fits-all approach. In addition to keeping control, the city should make that control more effective by reaching out to citizen groups and homeowner associations—the people traditionally blamed by builders and by affordable housing advocates for the housing crisis—to work together on solutions to this problem. There’s very

Planning principles and zoning laws have been very well laid out by now. We need community plans that provide control, and bring the building industry and the public sector together to provide a more sensible buildout than we get when the private sector does its own thing. The mayor, the Planning Department, and the Planning Commission pay a lot of lip service to making the city’s 35 community plans into effective documents. Effective use of our community plans, and rallying both the public and the building community around those plans, is the first step. But they need to do more. If there are not enough sites in those plans for affordable housing or for homeless housing, then the second key step is to go through the process to amend the plans and build the framework for affordable housing and homeless facilities. Instead, what we get is rhetoric about how zoning laws and NIMBYs are precluding us from building affordable housing and homeless facilities. Let’s see some leadership. Let’s see the Planning Department work with communities, not to disrupt them, but to get them on board to find suitable locations for new housing. The last thing we need is something like Senator Wiener’s SB 827, which would take away even more local power, when local governments just aren’t doing a very good job. Rather than directly increase the capacity of his own Planning Department, the mayor has brought the architecture critic from the Times in as his point person on urban design. What do you expect to see from the city, as the state Legislature consid-

“It’s frankly shocking that the planning establishment of Los Angeles has for more than a year done nothing to take back local control over ADU buildout.” —Carlyle Hall

little happening at the city level in the way of active community planning and getting all the different interest groups together. Our housing problem is very difficult. You can’t just blame it all on homeowner associations and NIMBYism. That’s such an easy and thoughtless target. The problem is one of economics, urbanization, and many other issues. It won’t get solved by rhetoric. The city’s new urban design czar will be a welcome addition to the planning and building process. He’s a respected voice who can lean on the current players, hopefully moving them in the right direction.

Lastly: In 1991, you brought a constitutional challenge in the U.S. Supreme Court to California’s Prop 13 for its inequitable impacts on new home buyers. The court refused to “upset the will of the people of California,” but did call the state’s property tax system “distasteful and unwise.” It’s also been said that Prop 13 makes new housing a money-loser for cities, which must fund their local services with reduced property taxes. Today, how significantly does Prop 13— presently considered an untouchable political third rail in California—contribute to the state’s housing crisis? Prop 13 is a major part of many inequities that we face. It creates problems on many levels. For one, it puts the bulk of the responsibility of paying for infrastructure and public services on younger people—who are buying houses in markets that are highly appreciated. When they have to pay disproportionately high taxes on top of that, it becomes very difficult for them to purchase homes. On the flip side, Prop 13 encourages people to remain in the same home long after they would otherwise probably move, because they don’t want to lose their artificially low tax rate. It also creates artificial caps on how cities can raise money, by setting a two-thirds supermajority requirement for all kinds of taxes and fees. The principle of majority rule has been the byword for democracy much longer than America has been in existence, and yet the supermajority requirements dictated by Prop 13 make it very difficult to tackle the serious problems that local government faces—affordable housing, homelessness, infrastructure buildout, and more. How will we end this unfairness? There is a campaign to get a measure on the 2020 ballot that would split the roll, but that’s just a part of the problem. However, in the next few years, I expect that there will be a push for general tax reform at the state level, and that Prop 13 reform will become part of that larger package. MIR


16 METRO INVESTMENT REPORT

APRIL 2018

SB 831Would Offer 200,000 Unpermitted ADUs Amnesty Continued from page 11

of constructing secondary units on residents’ property. In the Housing Elements of some of these cities, you see that typically they have no secondary units at all. That is the starting point. To combat this housing crisis, I introduced a bill two years ago to redefine ADUs’ relationships to the “mother house.” That allowed us to remove certain requirements that we found were barriers to construction. That is how we started our ADU work. Now, we want to take a look at how to empower existing homeowners to decide whether to construct an accessory unit. The goal of my bill is to empower the homeowner.

occurred and they decided to not impose any impact fees. They still have a permitting process, but they refunded any impact fees that they had charged. What I am trying to do is allow cities to reflect on the benefits that they have. Cities want to have control to shape their neighborhoods. I would argue that many of these cottages in the backyard are essentially invisible. We have 200,000 unpermitted units in California—and no one seems to know where they are. Some of the concerns that cities have are barriers. Still, the city has logical concerns about how the buildings look. I would like to have more aesthetically pleasing ADUs that are

In 2016, Governor Brown signed into law SB 1069, ADU legislation you carried. How does your new bill, SB 831, advance efforts to incent more ADUs throughout the state? First, SB 831 removes all impact fees. Cities have introduced impacts fees as a way to pay for parks or schools—saying that new construction will impact the existing neighborhood. Impact fees are different than service fees. SB 831 eliminates these impact fees for accessory units. Second, we set up an amnesty program that gives homeowners 10 years to become compliant. I believe that there are now 200,000 unpermitted ADUs in California, and more than 50,000 in Los Angeles alone. We have given the Housing and Community Development Department some authority to review local ADU ordinances, because after SB 1069, we found that there was some confusion between state and local rules. We also proposed exemptions for an ADU counting against a property’s FAR, and changing setback requirements to be no greater than three feet as supposed to five feet. Going back to the speed of approving applications, SB 831 will accelerate an ADU permit application to within 60 days. This will give more assurance to homeowners and the industry that is developing. This will benefit the financial community and the affordable housing advocates. Talk about the politics involved when the state moves to override local control over land use and development—especially given that your home city of Fremont opposed your ADU bills. In fact, Fremont was one of the cities that was charging large impact fees. Then, a miracle

“The goal of my ADU bill is to empower the homeowner.” —Sen, Bob Wieckowski

more habitable for the residents inside of them. This would benefit the neighborhood. I also believe that we need ADUs so that working people can stay in their own communities. We have too many people making long trips because they cannot afford to live in the area where they work. ADUs are, by definition, affordable. They have a small climate footprint, and you will be sharing your yard with someone. This can help people be closer to their worksite or to their school, which increases the livability of a neighborhood. Is it not true that new housing and more ADUs do not, from the viewpoint of local government finance, contribute to the local services that their residents expect? Cities have been shorted on resources since the passage of Prop 13; how will the state compensate cities for the fiscal burdens

on police, fire, education and healthcare that increased residents of ADUs will likely generate? First, the county assessors will reassess the ADUs. The 200,000 unpermitted units will be assessed at value—depending on size and value. This will not be whole house; it will just be in the new livable area. Cities will not enjoy a lot of money from this, but they will get some continuous funding from the construction of ADUs. New assessments on property will support cities through the increment of property taxes that are collected by unpermitted ADUs coming into compliance and new ADUs being constructed. This tax increment will also be a long-term source of funding. The fundamental questions we need to ask are: What are the benefits and burdens of ADUs? More likely than not, the inhabitant of an ADU will not impose a burden on local schools. It’s certainly possible that a family with children could live in an ADU, but more likely it will be a single person, a young working professional, or a family member. Let’s build the infrastructure, as we do in other efforts to build housing, and see how we can alleviate the crisis. We can always reassess the issue in 20 years if the situation changes, but right now I believe the benefits outweigh the burdens. In this issue of TPR, Helen Leung of LA-Más spoke of the financing challenges that prevent people from constructing ADUs (p. 26). Does SB 831 decrease the barriers to financial instruments? SB 831 does address the prohibition of owneroccupancy requirements in ADUs, because some cities are passing those ordinances. We try to include people with rentals who also want to build an ADU. There was a JP Morgan grant for Los Angeles and Silicon Valley to look into expanding the financial portfolio for ADUs. Freddie Mac has openly stated that if you are buying a house with the potential for an ADU, you can use the potential income from an ADU as part of your income to be included. We are in the infant stages of solving the financing challenges, but there are some grant monies to come up with opportunities. My bill focuses on streamlining the process, so it can be easier for communities. I have all the confidence in the world that the financial community will figure this out. MIR

Pestrella: Safe, Clean Water Program Will Invest in Resilience Continued from page 1

within our street system. The program will also encourage private investment by making low-impact development a key component. All of this is in the service of capturing and utilizing stormwater as a resource for drinking water supply—and improving the quality of surface water in Los Angeles County. Elaborate on the new portfolio investments the program is likely to fund, and on the growing role County Public Works is assuming in stormwater capture and management. LA County Public Works operates the Flood Control District for Los Angeles County, which covers the greater Los Angeles Basin to the county line. There are about 2.1 million parcels of land within the district, and as you can imagine, it’s varied in geography, demographics, and more. We have proudly protected the community from potentially devastating flood damage since the 1930s. The infrastructure that was installed at that time—iconic systems like the LA and San Gabriel rivers; 2,500 miles of underground storm drains; 14 major dams in the San Gabriel Mountains, which currently capture one third of our drinking water supply; and 27 spreading facilities—had the coequal goals of flood protection and groundwater replenishment. We want to optimize our existing system and distribute additional stormwater to new infrastructure across the LA Basin. Each year when it rains, about 100 billion gallons of water makes its way to the ocean and is wasted. We think that with new distributed infrastructure, we could catch about a third of that water before it gets to the sea. That would almost double our current annual stormwater capture and groundwater replenishment rates. The infrastructure we’re proposing now is unique. In general, to capture water, you’ve got to slow it down, and you’ve got to have a place to store it. Not having gigantic pieces of land in Los Angeles anymore, we’re now looking to store water at the neighborhood level.

In some cases, that means rain barrels on properties, and on a larger scale, it means park-sized cisterns—where we put a storage facility underneath a park to capture and store neighborhood rainwater. In a sense, we’re trying to un-pave LA. We’re trying to make communities throughout LA more porous. There are a lot of interesting ideas about improving surface water quality using our existing plumbing, as well. One thing we’re looking into, which was unheard of just a few years back, is connecting the county’s stormwater capture system with its wastewater system to divert polluted urban runoff to treatment plants. This past January, a resiliency panel at VerdeXchange 2018 hosted public works representatives from Houston and Mexico City. Given your experience with natural disasters, how challenging is it for public officials to entice the public to think in advance about the value and importance of strategic investments in water infrastructure to their quality of life? This is a big part of how we define resiliency. The folks in Houston did a great job in terms of responding to the emergency they faced. What happened there was partly due to missed opportunities in land-use planning for the safety of the community. But at the end of the day, no community could withstand the dramatic amount of rainfall they saw there. Climate change is having a significant impact on the way rain is delivered throughout the United States, and our infrastructure today is not intended to move the rainfall from a 1,000-year storm through a community. Here in LA, we’re also seeing dramatic shifts in weather patterns and rainfall that we believe are due to climate change. We’re experiencing a bipolar climate, where we either see the extreme weather event of droughts—spells of dryness and heat, where we’re not replenishing groundwater and dry plant life is accelerating our fire cycle—or the extreme weather event of highly intense

rainstorms, where the amount of water we’d expect to get over a long period falls all at once. When you run a system like ours as long as we have without any major flooding or damage to properties, like in Houston, people tend to start taking it for granted. But these extreme weather events have increased public awareness of the importance of their water system. They’re becoming more aware of where their drinking water comes from and how scarce it can be in our area. They’re aware that floods and fire could impact them. It’s unfortunate that this is what it takes, but events like those in Houston, Mexico City, and Puerto Rico do help us get people focused on resiliency. We’ve been talking to the public about this issue from a public health and wellness perspective, and taking the opportunity to ask what more we can do. With the Safe Clean Water Program, we’re essentially saying: We think there’s more that can be done, and there’s an innovative and environmentally sensitive way to do it that meets the needs of our communities. We know, and the public knows, that we could do more. We’re asking them if they want to pay to improve the resilience of their water systems.

17 The Planning Report April 2018

“My vision is for the Department of Public Works to be the most trusted public agency in the region. With that trust, we’ll be able to do great things for the community and build out the 21st century infrastructure that we envision.” -Mark Pestrella, LA County Public Works Director

Specifically, how are you reaching out to all 88 cities in LA County so as to better align with their priorities, find common ground, and gain their support for your proposed water resiliency investments? It has been a long journey, and the County Board of Supervisors deserves the credit for their leadership over the years. This board in particular has focused resources on collaboration across the region, not just the unincorporated areas. The direction from Supervisor Sheila Kuehl, our champion on the measure, to get out and communicate has been fantastic. One common issue facing all the cities, and the unincorporated county, is the need to improve the quality of water in our lakes, rivers, streams, and the ocean. We’ve been grappling with that

Continued on page 18

TPR


18 The Planning Report April 2018

“We’re seeking to capture more of the water in the river, rather than letting it go off to the ocean, and put it to use in the communities we serve. In terms of milestones, we’ve already formed a planning team, which now includes Frank Gehry.” -Mark Pestrella, LA County Public Works Director

Pestrella: ‘Community-First’ LA River Planning

Wiener: Links ‘Bus Service Corridors’ to SB 827 Upzoning

Continued from page 17

Continued from page 7

for many years. Other commonalities are the fire, flooding, and water supply issues facing every city in the region. Also, all cities are obligated to comply with mandates from the federal government under the Clean Water Act. Those requirements will cost the region something like $20 billion over 20 years, which is a huge obligation. Cities in Los Angeles County have a permit that requires them to capture runoff within their city. They are allocated a certain amount of water to be captured, cleaned, and conserved. Across the 88 cities, elected officials are facing a funding gap to meet those requirements, and they’re looking for relief. That gives us a place to start when we talk to elected officials about the Safe, Clean Water program. The Safe, Clean Water Program proposes to create a capital improvement program that would capture water before it leaves cities, and then put it back into the ground. It also proposes to return a percentage of the money directly back to cities. This would help cities both meet federal regulatory requirements and provide for unique projects that contribute to the greening of their urban areas. We’re seeing a nice alignment among urban greening, combating climate change, and complying with local obligations under the Clean Water Act. I really believe that this is the time for Los Angeles to move forward with a program like the Safe, Clean Water program. Not only is it needed, but it has also matured to the point where we have really good projects ready to go—as well as the willingness, understanding, and support of the community to get something off the ground. Could you address the planning efforts underway on the LA River’s revitalization? At VerdeXchange, Dan Lafferty from your department explained how Public Works is beginning an update to the River Master Plan. What are the goals of this new master plan?

TPR

This planning effort covers the 51-mile length of the river. It incorporates 23 municipalities, and a population of

about 1 million people living within a mile of the river. Moreover, we are linking this plan to more than 114 planning documents that only look at sections of the river and uniting them in one comprehensive river plan. A priority for the county is to make this a community-first effort. We really want all the planning we do, and any projects that come out of it, to be reflective of the cultures that currently exist along the river. We are seeking to understand the needs of each community in terms of health, equity, and open space. And of course, flood protection can’t be left behind, because that is a raging river when we get a good storm going. Water stewardship is

“We expect to have the master plan for the entire LA River done by spring 2020.” —Mark Pestrella

also a huge part of this: We’re seeking to capture more of the water in the river, rather than letting it go off to the ocean, and put it to use in the communities we serve. In terms of milestones, we’ve already formed a planning team, which now includes Frank Gehry. We also have a 40-person steering committee that represents multiple jurisdictions and interests; its first meeting was in early April. We expect to have the master plan for the entire LA River done by spring 2020. That is an ambitious schedule, but we feel comfortable with it. The Flood Control District, Public Works, and the County have been planning and building on the river for quite some time, since we share operation and maintenance with the U.S. Army Corps of Engineers.

TPR recently published an interview of State Water Board Chair Felicia Marcus on the challenges of intentional management of seemingly conflicting LA River policy priorities—i.e. wildlife protection, livability, and water storage and reuse. How is balance found? Since the day the river was channelized, it has been a challenge to balance all the competing interests around it. That’s just the story of water, isn’t it? Like every piece of infrastructure, the channel has a purpose. That purpose can change, as long as it’s still about serving the community. This channel was originally built to protect lives and property from flooding and improve the economy of Los Angeles—from Calabasas, through downtown, to San Pedro. Prior to the 1930s, the areas around the river suffered devastating flood damage that wreaked havoc on the economy, transportation systems and housing. Throughout the years, we’ve been challenged by many users of the river— poets, artists, elected officials, citizens who live along it or recreate there—to meet sometimes competing needs. We are looking to represent all the different interests along the river in our stakeholder advisory group, while also committing to an enormous outreach effort at the community scale. A big goal of this planning process is to connect communities. In some ways, the river has actually split communities apart. There’s not a lot of interaction between the communities in the east and west, or north and south. But imagine if there was a bridge across the river in the southeast county area. In our outreach, we tell the story of each mile along the river, while connecting communities along the way. We will share the story of mile one with the communities at mile 51. People find out about one another, and it creates a larger, integrated river community and a greater sense of belonging in Los Angeles. For me, one of the great transformative opportunities of this process is to interconnect LA—from north to south by bicycle, pedestrian pathways, or even

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trols. The notion that this is a “bulldozer bill” is unfounded. The bill also defers to local inclusionary rules, including LA’s Prop JJJ and San Francisco’s more traditional model of X percentage of units for affordable housing. In fact, the San Francisco Planning Department did an analysis showing that SB 827 would lead to a significant increase of below-market-rate units. In addition, low-density parcels that are currently not candidates for inclusionary zoning will become part of inclusionary programs as their zoning capacity increases. The bill also defers to local design standards—as long as the standard isn’t meant to shrink the building. We are still negotiating further amendments, but I can tell you right now that our current definition of high-frequency bus service is too broad. We had adopted the definition that currently exists under state law (SB 375)—15-minute headways during rush hour, even with otherwise limited service—but that’s not what we want. There are some who are pushing to take bus service out of the bill entirely. I don’t want that, either. Limiting the bill to fixed assets—rail and subway— would still be impactful, and a big win, but I’m advocating to include bus lines that are truly high-frequency. I’d hope to define that as buses that run from 6 am to 10 pm, with 15-minute headways during rush hour and 20-minute headways the rest of the day, and 30-minute headways from 8 am to 10 pm on the weekend. For areas like South LA, which have a lot of bus service, redefining the bus service in the bill is a much more refined approach and less globally encompassing. We are going to put inclusionary zoning in the bill, which is controversial. But I will not be able to pass the bill without it. My desire is to use the percentages defined in the state affordable housing density bonus program—a scaled or tiered approach that developers are already used to using. There is also a push for direct demolition controls in the bill. I put demolition controls in SB 35, such that you cannot use SB 35 to demolish rent-controlled

housing, and even non-rent-controlled multifamily tenant housing has to be vacant for a number of years. The reason for that is that SB 35 is a process bill, and we didn’t want to create a situation where someone would be entitled to demolish a rent-controlled building with tenants living in it. By contrast, SB 827 is not a process bill. It’s a zoning bill. Projects are already going to go through the local process for a demolition permit. We don’t think it’s necessary to put direct demolition controls in SB 827, but if we’re forced to do it, we will. There is also a push for delayed implementation. I’d resist a long delay,

“We’re past the point where we can take a pure carrot approach to housing in California. We have to have rules, or people just won’t do it.” —Sen. Scott Wiener

but I’m fine with delaying by a year or two to give communities an opportunity to prepare—with the provision that communities cannot screw with their zoning in the interim, like by rezoning all their residential as commercial or industrial, to get around compliance. This is a challenging bill. It’s very aggressive, and we’ve known from the beginning that it would get scaled back to some extent. Audience Question: We see time and time again in the housing debate that the middle—workforce housing—is forgotten. What can we do about that? Scott Wiener: There’s a certain dynamic in the capital that has been a

struggle. Things are changing, because California YIMBY is now a formal organization with a lobbying presence. That’s important, because in the past, the only advocacy for housing—other than the development community, which many people saw as self-interest—was for low-income housing. The advocates for low-income housing are incredible. I support their important work around funding and antidisplacement. And I totally respect their laser-like focus, because the struggles of low-income people in LA and San Francisco are so real. But we’re trying to inject a broader view of housing in the advocacy at the capital. The low-income part is important, but the middle-class is, too. Now, we’re not going to solve the middle-class housing problem with subsidies; it’s too big. And I worry that if we focus on housing subsidies for middleclass people, all that’s going to do is take away subsidies for low-income people. My view is that we should focus our housing subsidy program on low-income people—but it needs to be reasonable so that we’re producing a lot more housing, which, over time, will make housing more affordable for middle-class people.

19 The Planning Report April 2018

“My view is that we should focus our housing subsidy program on low-income people—but it needs to be reasonable so that we’re producing a lot more housing, which, over time will make housing more affordable for middle-class people.” -State Sen. Scott Wiener (San Francisco)

Audience Question: Are there ways we could provide communities carrots as well as s ticks? Scott Wiener: I do believe that we need to have both carrots and sticks. But we’re past the point where we can take a pure carrot approach in California. We want that—we want to help—but we have to have rules, or people just won’t do it. But the state does have to provide a ton more money for infrastructure. SB 1 is a start: $5 billion a year, a lot of which goes to local communities for infrastructure. We also put money in one of the bills we passed last year to give financial support to cities that don’t have fully fleshed out Planning Departments, so that local communities can adopt objective design standards and do the kind of local planning work that they’ve never really done. The state should be helping TPR communities do that.

TPR


20 The Planning Report April 2018

“If laws like SB 827 had been in place prior to Measures R and M, we probably would not have succeeded in getting that transportation funding. Making residential or R1 neighborhoods feel at risk if transit is created near them is a sure way to lose a lot of support for transit in those neighborhoods.” –Denny Zane, Move LA

TPR

Zane: SB 827’sTrickle DownTheoryWon’t Serve ExistingTenants

Storper:‘Naïve’to Think TOD Helps Housing Affordability

Continued from page 6

Continued from page 9

would go beyond what prior redevelopment laws provided by dedicating 40 percent of tax-increment funds to affordable housing. It would also provide that bonding in such districts would not require voter approval. That would allow us to use more money for affordable housing near transit. It’s a much better way to go than what is provided in SB 827. Cynthia, SAJE and PolicyLink recently announced an agreement with the developers of The Reef that will roughly triple the number of longterm affordable housing units in that $1.2 billion mixed-use project. What can proponents of affordable housing learn from that agreement? Cynthia Strathmann: We can learn from our community benefit agreement with The Reef that developers are actually able to do inclusionary affordable housing if they are properly incentivized. That was true in this case as well as in previous cases where SAJE has worked to make onsite affordable housing part of a community benefits package with a local developer—such as Geoff Palmer’s Lorenzo project, which is also in South Los Angeles. When developers realize that affordable housing is something that the community wants, and that they aren’t going to be able to build their project unless they provide it, they will in fact plan to do it. After all, it’s not an unreasonable request. But it’s worth noting that these project-by-project agreements are difficult to negotiate. They take a really long time. It would provide more certainty for developers, as well as a more effective and uniform way of producing affordable housing units, if there were a citywide inclusionary zoning requirement in place. Supporters of SB 827 have argued that increasing the supply of marketrate housing eventally will reduce the cost of housing. SAJE’s work appears to push back against that “supply-side argument.

Cynthia Strathmann: We push back on that notion because we’ve seen a big boom in market-rate building in Los Angeles—much of which, in fact, is very close to where SAJE works—and it has not led to a decrease in the price of the units nearby. Moreover, research has shown that the filtering or trickle-down effect can take decades to make itself felt—and we just can’t wait that long. We need more affordable housing right now. What we’ve supported in lieu of that approach are things like Measure JJJ, which required affordable housing around transit, but gave a density bonus in return. We supported similar measures in the work we did around the community plans. Those approaches are better than just trying to let the market fix it—because, of course, the market is what got us into this situation in the first place. If you let the market build whatever the market wants, the market will build the thing that the people with the most money want—not necessarily the thing that the people in most need want. For housing, as with basic needs like education or medicine, we need a regulated environment in which we incentivize people to, say, provide medical care for people who have no money—or build housing for people who don’t have as much money. I think you can tell a lot about a bill from who supports it. Right now, the really vocal support for SB 827 is coming, not from groups that represent lowerincome communities, but from affluent and middle-class folks, like infill housing developers. Those are, of course, the people who are most likely to benefit from an increase in market-rate housing—not the most vulnerable people, and certainly not the unhoused population or the lowincome folks in precarious housing. Denny, did you ever anticipate that proposals like SB 827 would be the next phase of legislation to build upon the transit infrastructure you successfully advocated for? Denny Zane: Absolutely not. In fact, if laws like SB 827 had been in place prior to Measures R and M, we probably

would not have succeeded in getting that transportation funding. Making residential or R1 neighborhoods feel at risk if transit is created near them is a sure way to lose a lot of support for transit in those neighborhoods. What we anticipated—and what we now suggest—is for policies to be directed toward expanding multifamily housing in commercial zones or in downtowns. These areas tend to be a lot closer to transit stations than residential neighborhoods. Building there would typically not cause displacement of existing residents, and they often have higher densities already. Building multifamily housing in mixed-use projects in commercial zones also creates an enhanced pedestrian environment. When I was Mayor of Santa Monica, we used this very strategy to revitalize the Third Street Promenade. It has lots of mixed-use housing and pedestrian traffic, and it supports many commercial uses as well as the transit that has now come. Denny, how do you envision density contributing to the fabric of a metropolitan area like Los Angeles? Denny Zane: A lot of density has to go to the commercially zoned areas. Much of that land is underutilized now, and will become increasingly so as commercial transactions migrate more and more online. Often, these corridors also have lower land costs and can support middleincome market rents, not just highincome market rents. That’s a section of the market that does not get served. These boulevards and station areas are ripe for more community development rather than simply commercial development. As Cynthia said, the trickle-down approach of SB 827 is likely to do well by the higher end of the market, but not likely to do well by the middle and lower end. We need a permanent strategy to address those. Grand Boulevards, tax-increment financing, strong inclusionary policies, and protection against displacement are the ingredients we need for successful housing policy. WEB EXCLUSIVE

TPR

us that once we give density to the building industry, there won’t be strong incentives for inclusiveness. If we want to see inclusivity, we need to link it to density policy. That’s the big schism within the academy; it’s about supply-side economics. But there’s another schism, too, that has to do with urbanism and urban design. Some believe that 21st century density should be linear. That’s the model of authorizing density within a certain perimeter around a transit corridor. This image of LA is one of densifying our thoroughfares and leaving our other neighborhoods with low density. Personally, I don’t think that’s good urbanism, nor is it economically or spatially efficient. The benefits of density come from density clusters, not from density corridors. Stringing density out is a terrible idea from the standpoints of design, placemaking, sociability, and aesthetics; what we need is something more like a forest. In LA, this is especially important because our employment density is low. Travel times are rising, stultifying the kinds of interactions that help places develop innovative and cuttingedge industry. The leading cities of the world—the high performers in our 21st century economy—have a complementarity between clustered residential and clustered employment. The corridor phenomenon, on the other hand, creates all the costs of dense living without the benefits. Nearly all of the planning faculty at UCLA Luskin School have come out in support of state Senate Bill 827. Comment on this near-orthodox faculty policy position coming out of an intellectually curious environment like UCLA. To be clear, there was no official collective endorsement of any piece of legislation by either the Luskin School or the Department of Urban Planning. A letter was drafted and circulated by some of my colleagues, as a matter of their own analyses and research conclusions. The majority of the faculty

signed it, but they did so as individuals. And it also happens that several of us did not sign it. Now, the deeper question: What does that mean? There is a widely held feeling among my colleagues that we’ve just got to get going on density, and that planning and zoning laws, as well as NIMBYism, are standing in the way of that. I share part of this analysis: I do think NIMBYism is rampant in California, and while some of it is about social justice and inclusiveness, much is simply about protecting people’s spaces and an inherited disdain for density.

“To justify overriding local control, you need a very deep, careful assessment. I don’t think SB 827 passes that test.” —Michael Storper

But I differ from these colleagues on the issue of blanket overrides of planning and zoning laws to authorize density. I think that would give us a combination of displacement and bad urbanism. Your research centers on metropolitan areas and regions, but the housing debate in planning seems to be about city versus state control. Elaborate on your point of view. Planning has always been on the fence about how to get democratic input on the diversity of the ways that communities want to live, in the context of fundamentally integrated metropolitan areas. There’s no perfect solution. I don’t think there’s a case to be made for systematically overriding local control; it’s too dangerous a precedent.

To justify overriding local control, you need a very deep, careful assessment. You have to be judicious and careful. An example is fair housing laws, when we told local communities, “You don’t have the right to be racist anymore.” I don’t think SB 827, in its current form, passes that test. It has good intentions, I think; Senator Scott Wiener believes in more equitable communities, and wants to solve our housing problem. But it goes about that in a pretty crude way. It’s a very blunt instrument, and we’d get all kinds of contradictory effects from it. For one, as Zev Yaroslavsky pointed out in last month’s Planning Report, its definition of transit corridors is way too crude. It also doesn’t do enough for inclusiveness or affordability, and it doesn’t have enough carve-outs to account for social and geographical variations. Now, we might be able to craft a policy—one with the right kind of density, respect for local geography, and, especially, a strong degree of inclusiveness and affordability—that would push me to agree that it was time to override local control in certain ways. But we must be careful to get it right before we do that.

21 The Planning Report April 2018

“History tells us that once we give density to the building industry, there won’t be strong incentives for inclusiveness. If we want to see inclusivity, we need to link it to density policy.“ -Michael Storper, UCLA Luskin School of Public Affairs

If a city of four million, like Los Angeles, can’t manage its own housing and land-use policies, does it make sense to cede land-use authority to an even larger and more remote organization—a state of 40 million, the size of the Eastern seaboard? The distance between average citizens and decision-making is a basic problem for any huge political structure. That’s certainly true for the state of California, if it’s already true for the city of LA. I think that if the state is going to move more into housing policy, it needs to have more of its own planning and guiding responsibilities—like the Office of Planning and Research had in decades past. These days, not a lot is going on in Sacramento in the way of bringing us together, giving us new ideas, and unifying us around new planning principles. TPR WEB EXCLUSIVE

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22 The Planning Report April 2018

“California is a hugely diverse state, and any one-size-fits-all solution for land use, planning, and zoning is likely to be troubled.” -Jennifer Hernandez, Holland & Knight

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Hernandez to Weiner re SB 827:‘Pilot’it First! UPCOMING EVENTS Continued from page 10

of where they physically need to be at any given moment of the day. They also tend to be younger, and perhaps healthier, with fewer kids or elderly parents. Life eventually gets more complicated for many people, and they end up needing a car that can be parked nearby and reliably available for their use. Upzoning proposals like five stories near bus stops with no parking are going to have unanticipated consequences. I think we’d be better off acknowledging that we need parking and committing to providing some—not in every case or community, but in some locations. That’s an example of why I’m skeptical about one-sized fits all density upzoning for all of California.

supreme in many of our wealthier communities. It is neither environmental nor responsible to deny housing to people near jobs. This challenges the older environmental ethic within the Democratic Party, and has caused a schism among environmental advocacy groups—as was recently confirmed by the Sierra Club’s immediate opposition to SB 827. The M&M coalition is challenging the premise that protecting the “character of the community” as allowed by CEQA achieves legitimate environmental goals—rather than just promoting racially and economically exclusionary housing patterns. Second, there is now recognition within more unions that their Let’s turn to CEQA workers are among reform to facilitate the most hammered housing production. by this housing cri“Upzoning proposals sis. The Building What is the status of such efforts? Council’s like five stories near Trades political strength, bus stops with no There have been and its continued insome important new on the use parking are going to sistence developments. One of CEQA lawsuits have unanticipated is the emergence of and threats as a tool Minority and Milto leverage Project consequences.” lennials for Housing Labor Agreements —Jennifer Hernandez for their union locals, and Homeownership (M&Ms), a coalition has left the CEQA of civil rights leaders litigation door wide and YIMBYs who open for anybody have come together in else to use CEQA a common recognition against housing projthat the status quo of the chronic underpro- ects, including those that could provide duction of housing hurts them a lot. homeownership opportunities for union The civil rights community thought they workers. had won the fight against redlining, only We also know, from reviewing every to find after the Great Recession that we CEQA lawsuit filed in California between have higher levels of housing segregation 2010 and 2015, that housing is still the top nationally and lower levels of minority target of CEQA lawsuits statewide. In So homeownership in California than existed Cal, for example, outside of San Diego, before World War II. Three generations of 98 percent of housing projects targeted by progress on homeownership and poverty CEQA lawsuits were in infill locations. In was wiped out by the recession. There is the BayArea, that number was 100 percent. now a renewed awareness of civil rights It is no longer credible to think of CEQA as and housing in the CEQA context, which an environmental protection statute when extends beyond the traditional focus of it comes to infill housing. In fact, CEQA environmental justice advocates. litigation is more often related to business The M&M coalition—led on the civil competition, labor interests, “bounty hunter rights side by The 200, which I am honored lawyers” seeking quick cash settlements, to represent—is openly challenging the and NIMBYs seeking to protect racial and “slow growth equals environmentalism economic segregation patterns. and progressivism” ethic that has reigned WEB EXCLUSIVE TPR

VerdeXchange 2019 Clean and Greentech Market Makers California Conference www.verdexchange.org Los Angeles, Calif. January 27-29, 2019 USC Real Estate Law Forum Jonathan Club Los Angeles, Calif. April 12, 2018 US Green Building Council Municipal Green Building Conference & Expo SoCalGas Energy Resource Center Downey, Calif. April 19, 2018 ULI-LA Hosts Los Angeles City Councilmember Jose Huizar JERDE (601 West 5th Street, 5th Floor) Los Angeles, Calif. April 25, 2018 Neighborhood Council Outreach Gathering City Hall Los Angeles, Calif. April 30, 2018 Silver Lake Reservoir Master Plan Community Meeting Friendship Auditorium, 3201 Riverside Drive Los Angeles, Calif. May 1, 2018 UCLA Public Health: 2018 Ruth Roemer Symposium on Homelessness UCLA Faculty Center Los Angeles, Calif. May 3, 2018 CityAge: Los Angeles The California Club Los Angeles, Calif. May 3-4, 2018 88 Cities Summit: Propel L.A. Los Angeles Economic Development Corporation Los Angeles, Calif. June 20, 2018

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Notes Continued from page 3

LAUSD to Analyze Real-Estate Assets A task force within the Los Angeles Unified School District has recommended that the system conduct a full inventory of its vast real-estate holdings and analyze options for better utilization of these properties, based on input from real-estate consultants and community stakeholders. In addition to about 6,400 acres of land and 1,200 schools or education centers, the second-largest school system in the nation also owns vacant lots, administrative buildings, operation plants, and parking lots. According to the task force, LAUSD lacks and must develop “a comprehensive strategy” to manage these holdings, which span Los Angeles County and the district’s jurisdiction, in a way that supports the district’s goals. LA Metro Seeks $1.4B in State Funds LA Metro is applying for $1.4 billion from the California Transit and Intercity Rail Capital Program. That funding would be used for six major transit projects: the Gold Line light rail extension to Montclair; the East San Fernando Valley Transit Corridor, which could be either bus rapid transit or rail; the West Santa Ana Branch Corridor, a light rail project that would connect Artesia and Downtown Los Angeles for the first time; the Green Line extension to Torrance; bus rapid transit between the Red and Orange Line in North Hollywood and the Gold Line in Pasadena; and bus rapid transit on Vermont Avenue. ACT-LA Launches Community Planning Outreach The Alliance for Community Transit (ACT-LA) has published toolkits introducing residents to the citywide community planning process underway in Los Angeles. The project aims to expand public access to planning knowledge in order to bring more voices into the planning process and create more equitable outcomes. TPR

StateProp1FundsSupportLARiverRehab Continued from page 18

there was basically scorched earth on both sides of the channel. We started hearing about the desire of some community members to traverse this area by pedestrian path. But the residents immediately abutting the area didn’t want anything to do with it; they didn’t In the Frogtown neighborhood of the want it in their backyards. city of LA, just south of Griffith Park, We held several community meetdevelopments are being proposed ings to figure out how to balance safety and planned—parks, housing, res- and flooding issues and the desire for taurants, bike lanes, shopping—that recreational opportunities, and we came seem to compound the challenge of away with a one-mile stretch of riverine finding a balance of uses. How is the area with a pedestrian walkway. Ultiplanning for this challenged strip of mately, all the residents who lived along the way asked for gates in their backthe LA River proceeding? yards leading into the facility. They It’s been interesting adopted it as a linto watch what’s go“It is with great care ear park in their ing on in Frogtown. We saw the precursor and respect that we will neighborhood.It is with great care and to it as we were draftenter river communities great respect that ing the Lower LA we will be entering River Revitalization to understand what we along Plan, and one of the can do to improve health, communities the river to underkey components we environmental quality, stand what we came up with was a toolkit for dealing recreational opportunities, can do to improve their health, enviwith potential gensafety and security.” ronmental quality, trification and realrecreational opporestate speculation. —Mark Pestrella tunities, and safety That’s going to be and security. one of the key challenges as we plan for Returning to inthe rest of the river. We’re hearing many differing opin- frastructure, are there particular LA ions—not only about development, County projects—perhaps funded by but also about things like the minimum Prop 1—that you are prioritizing? amount of water needed in the river to maintain habitat. All of these disagree- We’re using Prop 1 stormwater money ments are inputs for our planning effort. for several Enhanced Watershed ManIn any planning effort, the bottom line agement Plan projects, and a couple of is that you’ve got to get out among the particularly neat ones are in the county community and be transparent about the unincorporated areas. For example, potential trade-offs. Then choices can be under the leadership of Supervisor made about how to go forward. When Mark Ridley-Thomas, we’re making we’ve done that—brought the groups improvements to Magic Johnson Park that are warring with one another to- that will pull water from the creek and gether in one room—we’ve often come bring it into a cistern under the park, up with a wonderful compromise. Un- where it will water the landscape. usual things that we would never have Prop 1 money is also coming into play thought of doing have become possible. for the LA River master plan, as well as A good example is Tujunga Wash in some of the projects coming out of the the East San Fernando Valley. We have Lower LA River Revitalization Plan. a channel there, and for some time, WEB EXCLUSIVE TPR boating; and from east to west by spanning the river and creating public spaces on those spans. Making the LA River into a gathering place, as rivers are naturally, is the overarching vision for our master planning effort.

23 The Planning Report April 2018

“In any planning effort, the bottom line is that you’ve got to get out among the community and be transparent about the potential tradeoffs. “ -Mark Pestrella, LA County Public Works Director

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24 The Planning Report April 2018

“We want to provide a counternarrative to the idea that accessory dwelling units (ADUs) compromise the physical integrity of single-family neighborhoods.” -Helen Leung, LA-Más

LA-Más & LA County Piloting ‘Forgivable’ ADU Loans Continued from page 26

the second half of this year, there will be movement on this. The city’s ADU ordinance will have a provision addressing parking code. In a city that hasn’t built out its transit system, might eliminating parking requirements in working-class neighborhoods have unintended consequences? What does your pilot suggest? This project is on a hillside property right at the cusp of a half-mile from transit. In this instance, the state does not require the ADU to provide another parking spot. But we started designing this project before that law had passed, so it will have a covered garage. The state law allows for parking in configurations that have never been allowed before—such as for parking to be uncovered and tandem in the passageway. Most properties can accommodate that without building out a new spot. This is a great opportunity, and permitted ADUs in the city of Los Angeles will definitely have to take advantage of it. My perspective is that we should be thinking about eliminating or reducing parking requirements, not just for ADUs, but possibly for all developments in general in Los Angeles. As we take on its largest transit expansion ever, LA should really think about this. We should leverage our future transit expansion, especially our bus system, to think beyond our decades-old approach of always having a one-to-one ratio of cars to parking spots. An estimated 50,000 ADUs are unpermitted in LA. How will this number be reduced?

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In 2017, the city issued more than 1,700 ADU permits, of which over half were for conversions. Of that number, a significant percentage were previously unpermitted existing units, as opposed to new construction. My hunch is that a lot of these permits went to property owners who already had the cash or resources to complete an ADU without support. Most ADUs

that are still unpermitted in the city are owned either by absentee landlords or by low- to moderate-income homeowners who don’t have the resources or the finances to bring their ADUs up to code. I’m excited that Senator Wieckowski’s new bill, SB 831, thinks about reducing fees and enforcing code standards that take into consideration when units were constructed. I think that the world outside of city agencies— non-profits, general contractors, and financing entities—should consider how to support preexisting unpermitted ADUs in the city. Do you see a policy tension between environmental, health, and safety regulations for residential units— which are upgraded progressively— and the deregulation proposed to streamline housing density? It’s important to promote more housing and density, and it’s also important to promote health and safety. There is a balance between the two. But our current regulations treat ADUs—which tend to be one-bedrooms or garage conversions of around 500 square feet—as though they have the same impacts as new single-family homes of up to 1,500 square feet. SB 831 offers a way to streamline health and safety codes so that they meet their goals, while recognizing that a major advantage of ADUs is that they can be built off of a site’s existing infrastructure. For example, as of now, the city would prefer for an ADU’s site drainage to connect straight to the sidewalk, rather than to the existing home 10 feet away, which would save money. Plumbing requirements like this often require a complete and costly overhaul. That’s something we’re still figuring out as we build the city’s pilot project. Another issue that we came up against in the pilot project is the plan check process. The ADU will have a school fee, fire fees, and subdivision requirements (Title 21) associated with it. There is a series of sign-offs that will take quite some time. This small

project is being subjected to a complete plan-check process even though its use is much less intensive. One area that we’re excited to see the city reconsider is what should happen when ADUs—which are meant to be by right—are built in Historic Preservation Overlay Zones. For our pilot project, we had to go before the Highland Park HPOZ several times. The Planning Department is now thinking about how to find a balance between streamlining building and meeting requirements. Does LA-Más have any recommendations for the Planning Department on that question? I think it will depend on what re:code LA does. It’s been suggested that, if re:code incorporated the range of historic design guidelines across the city, then maybe we wouldn’t need HPOZs at all. Until then, I don’t think it makes sense for every homeowner in an HPOZ to have to go through a rigorous approval process by the HPOZ Board. It would make more sense for Planning to provide some very clear requirements that could be checked off a list. LA County announced last summer that it would start a pilot program to pay homeowners to build ADUs to house the homeless. Talk about that effort and where LA-Más fits in. The LA County Community Development Commission is leading this pilot project in partnership with the Department of Regional Planning. They are offering $75,000 forgivable loans to three homeowners, who we will walk through a design, permitting, and financing plan for a new ADU. In turn, the homeowners will make a 10year commitment to rent their ADU to someone who is formerly homeless, whether through Section 8 or one of the many other homeless housing programs that the county offers. The financial incentive is a new approach for the county to address Continued on page 25

People/Briefly Continued from page 2

After years of delays and cost increases, a $16 million bridge connecting Atwater Village and Griffith Park across the LA River will begin construction this month. The North Atwater Bridge, which will include paths for pedestrians, cyclists, and equestrians, was first approved in 2013 with funding from Crossroads of the World owner Morton La Kretz. The Governor’s Office of Planning and Research has released the results of its 2017 Annual Planning Survey, which collects information on local planning and general plans from all cities and counties in the state. Among other things, the 2017 survey asked agencies whether their plans address health, aging, greenhouse gas emissions, access to food, and other social issues. It was completed by 64 percent of jurisdictions. Los Angeles County planning efforts were recognized in the American Planning Association’s 2018 National Planning Awards. The Department of Regional Planning won Best Planning Practice for its Spanish Planning Committee, which provides live interpretation during public meetings and maintains a Spanish Planning Glossary. Plans to redevelop San Diego’s waterfront Seaport Village will likely be subject to major alterations after the discovery of earthquake fault lines onsite. Proposed changes include moving large buildings—a hotel and aquarium—off the fault line, to be replaced by a treelined pedestrian walkway. The Unified Port of San Diego will vote on the changes in September. Work has begun on a $13 million effort to restore a wildlife corridor between the Cleveland National Forest and coastal Orange County. Funded by Great Park developer FivePoint Holdings, the project tackles 20,000 acres surrounding Laguna Beach. The William C. Velasquez Institute is conducting outreach on behalf of LA County on the Safe, Clean Water Program seeking a countywide parcel tax. TPR

LeungAdvocatesADUParkingReforms Continued from page 24

the homelessness crisis. They want but perhaps were built to code in the to see whether $75,000 is enough of year they were created. Under this an incentive, whether this program bill, ADUs constructed prior to 2007 is scalable, and whether a scattered- would be evaluated today under the site approach to homeless housing is code standards of 2007. That could feasible. LA-Más’s role is as technical encourage more unpermitted ADUs consultants: advising the county agen- to come into compliance and become cies on the process, doing outreach, and permitted. making sure that the three projects are completed within an 18-month period. What consequences do ADUs face We’ve seen a lot of interest. We got for not meeting requirements? nearly 100 applications from across the county, and we’re currently work- The Building & Safety Department’s ing on a metric system to select the enforcement arm tends to be reactive: homeowners we’ll ultimately work a neighbor gets upset or a community with. We hope to group submits a lock that down this complaint, and month, and, within then an intervena year or so, to see tion is made, a “Los Angeles should citation might folformerly homeless tenants moved into low, and it goes be thinking about three ADUs across on the record. But eliminating or the county. the city does not take a proactive reducing parking Elaborate on your approach of regurequirements, not support of Senalarly looking for tor Wieckowski’s ADUs and issuing just for ADUs, but pending legislation citations. possibly for all on ADUs, SB 831 The exception is (see p. 14). rental units, which developments.” fa l l u nder t he —Helen Leung One exciting element Systematic Code of this bill is that Enforcement it will make local Program (SCEP) agencies accountable administered by for how they implement their local the city’s Housing & Community ordinances. For example, it imposes Investment Department. Other than a timeline of 120 days to process an individual complaints, this is probably ADU permit. If a proposed unit isn’t the cause of most ADU citations. approved or rejected within that period, I think it makes sense for enforceit will be automatically approved. ment to continue to come out of It also allows, statewide, for the Building & Safety, but it might also creation of an ADU on any lot that be interesting to see how the Housing has an existing or proposed home. I’m Department can play a role, especially curious and eager to see how that will since some ADU conversions will be be applied to, for example, R-2 proper- part of SCEP. ties where two units already allowed Another approach the city could by-right, but only one is actually there. consider is proactive support. At the Could the second unit be subject to the county of Los Angeles, many building same conditions as an ADU? and safety enforcement officers are The most interesting part of the also planners. It’s a combined shop. bill is the amnesty program, which Inspectors do proactive enforcement, addresses the challenges facing un- and also provide resources and sugpermitted ADUs. Those buildings gestions when they find property that’s TPR are probably not up to current code, unpermitted.

25 The Planning Report April 2018

“We’re exploring ways to support low-income homeowners who otherwise would not have the resources, experience, or financing to build an ADU, so that they can build equity and help alleviate our housing crisis by renting at an affordable rate. “ -Helen Leung, LA-Más

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Housing

26 The Planning Report April 2018

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Helen Leung of LA-Más on How ADUs Will Contribute to Los Angeles Housing Supply

In crafting a multi-pronged approach to addressing the housing supply challenges in California’s high-cost regions, accessory dwelling units (ADUs) can offer naturally affordable supply to the market. In Los Angeles, urban design non-profit LA-Más has partnered with the Mayor’s Office, as well as other city and county agencies, to

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egin with LA-Más’s mission and how it aligns with promoting ADUs in policy and legislation. Helen Leung: LA-Más is a non-profit urban design organization, and part of our mission is to support lower-income communities in shaping their growth through policy and architecture. ADUs align with our mission and our sk illset in Helen Leung many ways. Over the past two years, we’ve seen the potential of ADUs to be an easier, cheaper, and potentially community-led way for Los Angeles to add housing in general. There’s also great opportunity for ADUs to contribute to affordable housing. Affordable ADUs have the ability to support low-income renters and homeowners. Share the goals of the ADU pilot project LA-Más is currently engaged in with the city of Los Angeles. The ADU pilot project is a partnership among the Mayor’s Innovation Team; Councilmember Gil Cedillo; our office as the architect and project manager; Genesis LA, a community development financial institution as the loan provider; Habitat for Humanity as a general contractor; Nous Engineering as the structural engineer, and a lot of other partners. We’re under construction and will hopefully have our ribbon-cutting this summer. The goal of the project is to demonstrate four things. The first is that you

address the role of ADUs from a design, cost, and policy perspective. As the California Legislature debates ADU legislation, TPR interviewed Helen Leung, co-director of LA-Más to ascertain how her pioneering policy work both helps homeowners build ADUs on their property and creates more housing options for all income levels.

can design an ADU that is beautiful and contextual to your neighborhood. This project is in Highland Park, where there is a Historic Preservation Overlay Zone (HPOZ), and the ADU we designed meets the HPOZ requirements and fits in the neighborhood. This demonstration provides a counter-narrative to the idea that ADUs compromise the physical integrity of single-family neighborhoods. Second, we also want to demonstrate that you can build an ADU in a fairly

“What SB 831 would do, for the first time, is make it actually feasible for ADUs to be permitted.” —Helen Leung

affordable fashion. We see lots of highend, luxury-designed ADUs, or ADUs that are unpermitted and not following the code. We think that there’s an in-between that is affordable. In partnership with Habitat for Humanity, we designed a stick-build, ground-up, new-construction ADU, with two bedrooms and two baths, at about 1,000 square feet, not including the garage. Our goal is to have construction costs of about $250,000. Our third goal is to test the financial product. Today, the average homeowner can’t go to the bank and get a construction loan for an ADU, because banks don’t recognize the future collat-

eral of the ADU. Genesis LA is leading the effort to test a construction loan that, hopefully, they can eventually share with larger commercial banks to provide an ADU financial product for homeowners. The final goal of this project is to inform policy. Currently, LA is following California state law on ADUs, and there’s an opportunity for the city to craft its own ordinance. Our hope is that the ordinance that LA does eventually adopt not only reflects the progressive and inclusive nature of the state law, but also supports and promotes more ADU production—and, if possible, more affordable ADU production. What results do you hope to see? We’re hoping to see an ADU that is beautifully built, that fits into the historic context, and that gets Angelenos excited about supporting ADUs in their neighborhoods. And we hope that the pilot will inspire Angelenos to support a very progressive ADU ordinance— one that doesn’t set a minimum lot size requirement or put further restrictions on hillsides. We’re also hoping that our city leaders will think about what kinds of programs they can create to incentivize more ADUs, especially affordable ones. For example, could we offer fee reductions? Could we provide financing, design, and permitting support to local homeowners? We’ve been working with the mayor’s office to explore ways to support low-income homeowners who otherwise would not have the resources, experience, or financing to build an ADU, so that they can build equity and help alleviate our housing crisis by renting at an affordable rate. I think in Continued on page 24

The Planning Report: Vol. 30, No. 3 - April 2018  
The Planning Report: Vol. 30, No. 3 - April 2018  
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