Mixed-Use Development in L.A.: More a Wish than a Reality

Let’s begin with an interview we did almost two years with Doug Gardner on regulatory barriers to alternative urban growth patterns. He said "it's impossible with the regulatory framework that we have right now to be creative in land use patterns." Is it difficult to pursue alternatives such as mixed-use within our current regulatory structure? 

Johannes Van Tilburg: Yes, it’s very difficult. The City Planning Department under Con Howe is writing a mixed-use ordinance, but as yet, the ordinance doesn't exist. So if you want to do a mixed-use project, you have to go to the planning commission and beg and everybody in the community takes a shot at you. We just did a mixed-use project at Wilshire and Wesley and it was a very arduous process. There is nothing to encourage mixed use. Even from a financing angle, lenders look at it very skeptically. 

Ideally, a mixed-use ordinance would allow an increase from, for example, 1.5 FAR to 3.0 FAR, which comes up to about five or six stories along a major boulevard. In that context, one could build residential units on top of just enough retail to serve the neighborhood—not a shopping center with housing on top of it, but neighborhood stores with housing on top. 

Doug Gardner continues: "it is not sufficient to espouse new planning strategies without a mechanism to ensure their implementation by the private sector. At this juncture, most builders feel the perceived risks of non-suburban development appear to outweigh the potential benefits." Is that your experience, Bill? 

Bill Witte: I'm not sure that's wrong. 

The problem for mixed-use from a cost and density point of view is parking. The only places in this country where you see entrenched patterns of mixed-use—Manhattan is an extreme example—are places where you can achieve it without parking. 

Johannes Van Tilburg: Janns Court and all of our other buildings in Santa Monica, in fact, were completed without parking.

Bill Witte: The problem is that even if mixed-use is supported by the market, the cost is not amortizable without density that is beyond the pale of acceptability. Even if there were a more amenable regulatory environment, parking would still be a feasibility problem. 

The second, related problem has to do with the five or six story model Jan just mentioned. With wood-frame construction, you are limited to four unless you get into much more expensive steel-frame construction. 

Johannes Van Tilburg: Or a sandwich combination. We have done two floors of concrete and four floors of wood on top, like Janns did in Long Beach. 

Bill Witte: But still you don't get the economic benefits of mid- to high-rise views, or the density to amortize those costs. You see very few examples of that type of development because, first of all, no one encourages it—who wants to go through that struggle? Second, it simply costs too much and often is not financeable. 

People also have to recognize, as Jan does, that ground floor retail is a desirable complement to housing or office uses, but it is an amenity—not a big revenue generator. Many projects around the City have failed because they relied on revenue from the retail side that wasn't achievable. 

Mixed-use is very difficult to achieve in a spread-out environment like L.A. unless you have a sort of "village" situation. In theory, Jan, I suppose that is what is behind some of the urban design for Playa Vista. 

Johannes Van Tilburg: Yes, but Playa Vista has precious little mixed use. Even Maguire-Thomas didn't quite to know what to make of it. It's so different from Santa Monica, which is a real urban center. Playa Vista is more of an urban/suburban infill site, hardly the center of density. Retail in Playa Vista can only be viable if it is neighborhood-oriented and housing is developed on a very broad scale. 

To change directions, the passage of Proposition 218 and its predecessors has led to the so-called "fiscalization of land use"—it is more profitable for cities to go after sales tax revenues than to lose property taxes to the State. How does that impact mixed-use development? 

Dan Rosenfeld: I think you've answered your own question. We do not have a rational sharing of sales tax revenues. When it is more lucrative to build auto malls, people will build auto malls. Your publication has argued eloquently on the need to have a regional allocation of what are really regionally-generated tax revenues. 

So, in this and earlier discussions we have identified many regulatory barriers to mixed-use—zoning codes and regulatory siting, CEQA, builder liability, investor resistance, and community opposition. Dan, as an asset manager for the City of L.A. and having done similar work for the State, what dynamics are at play? 

Dan Rosenfeld: Nearly every pedestrian-related public works policy in this City is in direct conflict with good urban practice. Our standard is to widen streets and not to calm traffic, our sidewalks and crosswalks are specified for grey concrete, our street trees policies conflict with our street lights and vice versa. Our standard City lighting pole—a forty-foot davit with a cobra head—looks like the permiter lamps at Buchenwald. All of this belies a devotion to the "car culture" and a focus on faster flowing traffic that is somehow embedded in the psyche of post-war Los Angeles. 

As to what can be done, that is a very interesting question. At both ends of the political spectrum in City government, there is great sympathy for progressive change. Junior staff members understand these problems very well and are willing to look to other cities for models that work. They are prepared to do what it takes to catch up with the smaller towns around L.A. who have done great things with their pedestrian environments. The City Council, at the other end of the ladder, is also quite sympathetic. 

I find it's the senior managers in the City's public works bureaus between the staff and the council who were raised in the auto euphoria of earlier days and are now carrying the torch for these outdated policies. Most people who reach these levels in the City started out in one of the sewage plants or as a construction engineer, and have worked their way up. Consequently Public Works is very resistant to outside influence—especially when new ideas might affect anticipated retirement plans. The higher people get in the system, the more reluctant they are to rock the boat. There is no incentive to change and every reason not to. 

As a result a gap has developed between ideas out on the street, ideas that the staff is often embracing, and what actually reaches the Council and is acted upon. 

I want to go back to you, Jan. Is it the inflexible building codes—often more than thirty years old—which impose the greatest difficulty on these projects? 

Johannes Van Tilburg: The building codes are part of the problem, but mixed use is doable now as long as you have a good building official on your side. The L.A. Housing Department is getting a little better about this.

When we did Janns Court we asked Bill Rome, a Santa Monica building official, "Can we do a three-story wood-framed building on lop of a four-story type-I building?" He said "let me think about it, call me tomorrow." We did, and he said "sure." 

The building official is allowed to make those decisions. But what Dan said is very true: they'll be damned if they're going to make them. 

When we did Wilshire/Wesley, the senior officials said at one point, "We know we approved it, but we shouldn't have." 

You need a strong, committed building staff who will work with you. You need to be able to go to the Building Department with the senior people and work it out. 

 In Santa Monica, we have done a number of mixed-use buildings. They always get built, and it's actually fairly easy once you know the system. But, in contrast, the City of Los Angeles is generally regarded as the worst place to do anything of that nature because nobody will step up and make a decision. 

But some say that the City Departments and regulations won't lead—the development community must lead. Can we expect private developers to push the envelope of land-use patterns? 

Bill Witte: Only in those cases, which are few and far between, in which mixed-use offers great economic advantage. It is striking that Jan has been talking almost exclusively about Santa Monica, not the City of L.A.—and the issue is not entirely regulatory. There seems to be a consensus about mixed-use on the planning side, but developers are thinking about economics. 

For mixed-use to work, you need locations that command significant rents for both commercial and residential uses. We are a consultant to a small but controversial project at 81st and Vermont in South Central L.A. consisting of 35 townhouses and 12,000-15,000 s.f. of retail. It is being built, but only with substantial subsidies from the City. 

You can't expect the development community to lead—it doesn't make any economic sense right now. But as neighborhoods improve, hopefully it will begin to make more sense, and public-sector involvement won't be necessary on the same scale. 

Dan Rosenfeld: Who leads shouldn't even be a question. City government is paid to lead. That's the only reason they exist, and if they're not leading, they should be gone. 

Bill Witte: I agree. Several years ago, Diane Feinstein and the City of San Francisco embarked on a major campaign to encourage housing development. The City took action on several fronts—some regulatory and land use (all surplus City land was rezoned for affordable housing), and some financial.

In contrast to what we generally see in L.A., The City of San Francisco was definitely leading. They decided that they wanted to encourage housing and would actively promote it using all the tools at their disposal. The structure in L.A. makes that sort of action virtually impossible on a City-wide basis. 

Occasionally we have an 81st  and Vermont situation when the Councilperson decides he or she wants something to happen and bulldogs it through.

Dan Rosenfeld: I haven't seen an L.A. project that has resulted from anything but that. They require the personal will and determination of an individual at a senior level. Very few ideas percolate alone up from the staff. 

Johannes Van Tilburg: There are also barriers to mixed-use in perception, typical of Los Angeles neighborhoods. The mixed-use ordinance is perceived as a devious device by developers to increase density. It is not seen as a way to build better neighborhoods, but as a way to allow double-sized projects. It has a very poor reputation. 

What would it take, Dan, for a mixed-use ordinance to move through the process and be adopted in Los Angeles? 

Dan Rosenfeld: It will take someone who is willing to make it his or her legacy, disregarding the personal consequences. It is said that every time you take on a controversial political issue like this, you spend—perhaps permanently—a portion of your political capital—career suicide, in a sense. These changes will occur because of an individual who will relentlessly pursue them, expecting it perhaps to be the last thing they do in government, but leaving behind something very worthwhile. 

Will we see a mixed-use ordinance adopted in the City of L.A. in 1997?

Johannes Van Tilburg: As Dan said, nothing will change unless somebody really wants to make it happen. If Cindy Miscikowshi takes it up, we might see something.