LA’s Development Reform Process: A Plea to Council for Predictability

Mayor Riordan's Development Reform Committee (DRC), which you chair, is shortly going to release its recommendations on streamlining the development process. Share with us the goals and missions of this committee. 

First of all, it was really a committee appointed jointly by Mayor Riordan and Councilman Hal Bernson, on behalf of the City Council. The Mayoral-Council collaboration is an important ingredient which I think distinguishes the effort from those in the past when the Mayor was acting completely alone. 

The mission of the Development Reform Committee is to figure out a way to make the process which leads to the physical construction of buildings and structures in the city of Los Angeles, more predictable, rapid, and in many senses, more equitable. It is not, by comparison, an attempt to change or alter the ordinary debates which ultimately take the form of legislative action through community plans and other planning processes such as specific plans. We aren't trying to make the city ready for high rises where people don't want them; rather, the notion for our committee is to define the rules of the game so you know what you can and can't build. Once you initiate the development process you ought to be able to know what steps to follow and how long it will take. As it stands now the entitlement process is so unpredictable as to be arbitrary and the construction permit process so slow and convoluted that it's notorious for being hostile to anyone trying to get a project completed. 

If we fail to achieve reform, the existing systemic will continue to hurt everyone in Los Angeles as we will be at a competitive disadvantage in attempting to attract private capital investment. 

I understand your group broke down into three committees to deal with Administrative Procedures, Fees and Exactions, and Entitlements. Can you give us an idea of each committees' mandate?

That is certainly how I suggested they be organized. The Urban Innovations Group staff assigned to the committee has created more artful phraseology: "Service Delivery Projects" is, for example, their euphemism for Administrative Permitting. But I'd agree your categories follow the general direction. 

Let me give you a quick synopsis of where I believe we are going. With respect to the entitlement system, it's obvious that for years what's happened is that the planning process has been displaced by a political process that requires discretionary approval for virtually everything. What we would like to do is go back to the underlying premise under which planning was formulated. That is, if you own a piece a property with a certain zoning designation, and you want to build a building consistent with that zoning, the community plan and any applicable specific plan, you shouldn't have to go through a whole series of separate discretionary actions. 

We are not saying what the community plan should look like; that’s a matter to be negotiated between the developers, planners and the communities. Some changes are simple. For example, a previous committee appointed by Councilman Bernson which included homeowners, concluded that there are repetitive and unnecessary conditional use permits. At present if you want to sell alcohol in a supermarket, you have to go through months-long procedure, and when you're done, you receive a fairly standard laundry list of conditions you must meet. Why not put those in the code? Why not include a number of development standards that tell you what you need to do at the beginning of the process and eliminate the nine to ten month guessing game? 

We are looking at establishing realistic guidelines for when an Environmental Impact Report (EIR) needs to be written. From our perspective, if you are doing a large project, such as 500,000 sq. feet of commercial development, you generally know there may be a CEQA challenge, so why not require a focused or a full EIR. Below whatever the threshold is determined to be, a Negative Declaration ought to suffice with the ordinary laundry list of standards and conditions. That process ought to lake six weeks instead of 60 weeks or six years as it does now. 

We think that we can change the rules and still provide a significant amount of public scrutiny for projects. Nonetheless, if we are to be a business-friendly city the current entitlement system must be more predictable, less capricious and above all move expeditious. 

On the permit processing side, we've really focused on two major series of objectives. One is to eliminate unnecessary duplication for both permit processing and administration. We are looking very hard at how many entities are issuing permits and whether they can be centralized. 

At the same time, there are some duplicative processes, the most notorious of which is the inspection process. At present there are Department of Building & Safety inspectors who will inspect your site during construction and tell you what safety issues must be met. There are also inspectors with the Fire Department who do substantially the same thing. Unfortunately, the two departments don't often interpret the same building code consistently and don't often talk to each other. So, if you are the person trying to deal with them, you need both their approvals or you're stuck in limbo. We think that kind of duplication is counter-productive. It is not consistent with how other jurisdictions behave and we need to fix it.

The second objective is to create a series of performance standards. Right now there is no real accountability in the system. And it takes Los Angeles several times longer to perform many standard tasks (plan check, reviewing traffic reports) than other jurisdictions. We must have a system that trains these departments to be result, not just "process" oriented, and to back up performance standards through the budget and employee evaluation process. 

What about proposals to change the behavior of what many people consider an anti-business bureaucracy? 

To many, the organization of the city of Los Angeles has degenerated into a series of bureaucracies that don't seem to have any mission in life other than to administer their piece of turf. To hell with what the low-income housing project or commercial project needs to go through, so long as the endless code of red tape is administered, however erratically, however long it takes - so be it. This will just not do. 

We want to create some type of standards and guidelines, comparable to other major cities. We haven't been attacking the rather excessive fees charged by the various City agencies, but given those charges, there ought to be expectations about performance (i.e. time), and the people who work in the department including the general managers ought to be held accountable. 

On the fees and exactions side, part of the equation is fairly simple. At a recent meeting, I threw out a challenge to a room full of city employees to identify every single fee and charge that a developer has to pay in the city of Los Angeles, from the smallest application fee to the largest mitigation measure. No one responded. So what we are trying to do is count how much it costs to do business in Los Angeles and compare that to other jurisdictions. I'm confident we will find that the size of the difference is appalling.

In general, we want to review some categories of fees, eliminate them in certain cases, or reassess how they are calculated. In addition, the city's assumption about “exactions" for physical and social infrastructure costs need to be substantially revamped. Many current exactions are premised on the theory that new development is the only place to go for infrastructure funds. The trouble is that the vast majority of our infrastructure needs are unrelated to new development and there isn't enough new development to provide any of the real money to meet all infrastructure needs. 

The current arbitrariness of gouging only property owners who happen to go through certain entitlement approvals for massive exactions while others avoid such charges is indefensible. It may be better to have a city­wide infrastructure charge which is fair, rational and related to the impacts actually caused by new development rather than making up for past omissions. 

During its transition work the Riordan Administration found $37 million in the fire hydrant trust fund that had been collected from developers over the years but was unspent. I'd be interested in seeing how much of the traffic mitigation money collected over the years have been spend on actual physical improvements.

Why not allow the developers to perform certain improvements if that's what the city really wants? They are motivated, have a lot more knowledge about construction and can complete the job in a timely matter. 

So there are a n umber of reforms that we think can actually improve the infrastructure of Los Angeles without having to rely on a legally suspect, underfunded exaction oriented approach as we have today. 

Following up on your analysis of the challenges, is it really the bureaucracy that's opposing more certainty in the process or is it the City Council’s desire for maximum discretion? 

I think the whole system has arisen from historical conditions, circumstances and accidents, both at the council level and at the departmental level. Our present structure of city government evolved during the 1920s and '30s. And the departments have been influenced by the current decentralized structures, while at the same time the political will vis-à-vis development and growth changed dramatically from the Yorty Administration to the Bradley Administration. Up until the early 1970's, growth was considered desirable as a matter of public policy. Our state created major institutions of higher education, major highways and other physical improvements in preparation for this growth. But when people's attitudes changed and growth didn't stop, we began to enact regulatory barriers to prevent such growth. These changing attitudes were reflected in growing regulatory requirements in the planning system. 

I think that now is a good time to look at what we've done these last 20 years. The public's legitimate fears about jobs may help create a sense of the need to balance economic needs against the negativism toward development. 

I think the Committee is going to present the City Council with strong comparative data on how uncompetitive we are with respect to our planning and construction permitting systems. We'll see if the facts and their own sense of what's good for the city has any impact on the council's usual instinctive habit to seize power and never let go. 

What is the logical relationship of going from planning by-discretion to planning by-right and continuing to reduce the Planning Department staff? If we don't have quality planning, can we really have faith in planning by-right? 

I don't like the term planning by-right, because there is no such thing in California. 

But, I think we need to get out of the regulation business and back into the planning business. What happens now is that the resources of the planning department are engaged in local wars to regulate the hell out of potential new development. We need to look at developing a planning system and the result may be a series of standards incorporated into the code or into community or neighborhood plans. The point isn't to make it harder or easier, but to make the process definite, so you know what it is you have to do when you want to invest your money. The point is to make the process less arbitrary. As it stands now, it's the worst of all worlds. 

I think the planning department ought to play a significant role in trying to figure out what the sensible balance between economic development vs. theoretical development impacts are in the various neighborhoods. That's a legitimate argument with different points of view, but the Planning Department has to have the professional expertise, an even-handed mindset and the political strength to do it. 

Under our current city structure, how will these streamlining proposals be implemented? And share with us the implementation schedule?

That's a very good question and one we have thought a lot about. 

As you know, the people on this committee are not naive. Indeed, we've attended several community meetings and been berated by some of the homeowners, then also, frowned at by some of the developers. I feel like I'm back on the Planning Commission. Many of the emerging recommendations, particularly in the permit streamlining area can be done by executive fiat or by a resolution of City Council, but other systemic changes, particularly in the entitlement area will require ordinance changes. A few suggestions could require charter change.

Your appointed Committee has really done its work behind the scenes, and by all accounts not by a very representative group of people. Given the politics of reform, how do you see these proposals playing at the Council? 

Well, as you know, I inherited this committee, I didn't pick it. I was not involved with the actual formation of the committee membership. But I would say that the committee membership is more diverse than people think. It is certainly ethnically diverse. We have community activists, low-income housing providers, some developers and former bureaucrats like myself. But it isn't a group that includes some of the more vocal homeowners' representatives. Please recall that many of our efforts incorporate prior studies in which homeowner groups were involved and our changes are technical in nature - we do not contemplate making any decisions about the actual substance of neighborhood zoning and planning. Nonetheless, in order to compensate for the absence of such representation we decided to hold a series of community meetings. Thus, we have obtained feedback before there were even semi­final proposals on the table and we will involve as many people as possible as the process moves forward. There will be many opportunities to comment on these proposals and when the day is done, we’ll all hear plenty of debate on these issues. The problem and challenge for some groups will be whether they can look beyond their provincialism and see themselves as part of a city. 

What issues do you hope to see the debates revolving around?

The most important thing that can come about from this exercise is for the city’s population, which includes homeowners, landowners and employers to understand that "development" is a neutral principle. At the same time, economic development is a sine qua non if we want the overall standard of quality of life to progress in this city. 

This report is not about fundamentally changing the planning characteristics of this city, but to make the city more receptive to appropriate forms of economic development. If the local homeowner's groups and the City Council are capable of looking beyond immediate self-interest to the city's need to be economically competitive in a rapidly changing world, then our recommendations should be embraced.