From non-profit and advocacy organizations to politicians and bureaucrats, almost everyone, whether they reside in the City, the County, or parts in between, has an opinion on why the City of L.A. has a housing crisis, who's to blame, and how we can end it. However, a voice that has been absent from many mainstream publications has been that of the business and development communities. In the following article, those communities voice their concerns about the L.A. housing crisis and offer suggestions to combat it through a two-pronged approach: financial incentives and a streamlined development process.
By: Ray Pearl,Executive Officer BIA
Our political leaders are not the only ones that will lift us out of our current housing crisis. The business and development community, represented by the BIA, Central City Association and VICA, has also enumerated a number of strategies which could begin to address the housing crisis by treating housing as it should be treated-as vital infrastructure. In doing that we hope to enhance the development environment in L.A. so that we have the ability to build 60,000 housing units (the number SCAG has identified as L.A.'s need over the next 5 years), encourage and save the dwindling middle class and preserve our job base as we head into recession.
In hopes of completing that mission, we must make the City's housing crisis a vital component of an overall development strategy in the City of L.A. The City must reform its development processes and exactions to offer a "by-right" development process. This would eliminate the financially burdensome and politically risky process currently in place. With that said, merely streamlining and facilitating the development process cannot be offered in-lieu of critical and necessary financial incentives.
"Incentive-Based Mixed-Income Housing" should be encouraged citywide. The program would incentivize developers to allocate a percentage of residentially developed units to affordable housing either in each project or within some acceptable radius of each project, by providing "real-time" subsidies to build those affordable units. However, "Inclusionary Zoning," which mandates developers provide affordable units with no financial subsidy, is not the answer. And while some may wish to suggest linkage fees as a viable funding source, those fees should only be considered as a mechanism of last resort.
In charting a course to solve our housing crisis, we must be cognizant that the aforementioned funding mechanisms only work when development occurs and that if the tax on development is too great, a Housing Trust Fund based on these sources dries up.
The City must continue this paradigm shift by prioritizing housing at the Mayoral level by appointing a Deputy Mayor of Housing and a corresponding permit expediting team for residential and commercial developments that have an affordable housing component. That position should not only coordinate with General Managers but must be an integral component in the aggressive lobbying of our political leaders. We must maximize L.A.'s share of state tax credits, Downtown Rebound dollars and federal housing funds. L.A. can not do it alone, we must cultivate and utilize federal and state partnerships and collaborations.
The City of Los Angeles must decide what kind of development it wants and then provide real incentives to encourage it. If mixed-use, mixed income projects are the ideal, then encourage that both financially and politically.
Los Angeles is clearly facing a housing crisis that is costing this city on all levels. Los Angeles businesses have a more difficult time recruiting employees. Slum housing conditions negatively affect public health, safety and neighborhood pride. Lack of affordable homeownership has effectively pushed our middle class out of the county, which has dire environmental and quality of life repercussions for all of our citizens. And too much of our disposable income is going towards rent and mortgage payments rather than into our savings accounts.
We urge the City of L.A. to focus on these incentive-based recommendations and partner with us to fix a system that is clearly not currently working. The business and development community stand ready to aid the entire city, state, and federal family in its efforts to focus on these critical issues for the benefit of all of the city's residents and employers.
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