"If SB 827 Were Law When LA County's Measure M Was on the Ballot, It Would Have Failed!" -Denny Zane, Move LA

Denny, as founder and executive director of Move LA, and a longtime proponent of transit investment, what is your perspective on State Sen. Wiener’s Bill SB 827—a housing bill that upzones transit corridors and that most every tenant rights group in Southern California opposes? 

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.

However, the question 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, of course, 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 such goals?

Cynthia Strathmann: I agree with Denny that this bill is not the best way 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 way that is thoughtful. 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 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.

Cynthia, 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. It is a holistic, comprehensive approach to developments here, based in community input, that supports the efforts of lower-income 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, MoveLA 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.

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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, 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 long-term affordable housing units in that $1.2 billion mixed-use project. What can proponents of affordable housing learn from that development 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 market-rate housing will eventually reduce the cost of housing. SAJE’s work would appear to 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 lower-income 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 low-income folks in precarious housing.

Denny, increased investment in transit has long been your mission, but did you ever anticipate that proposed state laws like SB 827 would be the next phase of legislation to build upon the transit infrastructure you successfully advanced? 

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, also in this issue of TPR is an interview with UCLA Professor Michael Storper, who is likewise critical of SB 827, in part because he advocates for density in clusters—like the Grand Boulevards promoted by Move LA—rather than along bus corridors. 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 middle-income market rents, not just high-income 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.

Lastly, recent state legislation, including SB 827 and even SB 831 which would incent ADUs, seems to signal that the state is willing to take over jurisdiction of local land-use law in order to incent more housing development. Denny, based on your tenure as mayor of Santa Monica, and Cynthia, based on your work on community plans: Is local government incapable of managing land use and zoning?

Denny Zane: It’s difficult to account for the political motives in the capital. There are strategies and policies out there that work, and that don’t require the heavy-handed touch SB 827 brings.

During my tenure in Santa Monica, we had a very successful housing development program for market-rate, moderate-income, and low-income. We are one of just a handful of cities in the state of California that have met all of their state-mandated regional housing allocations; in the last cycle, we built four times as much housing as required. That was achieved, as I’ve suggested, mostly by adding housing to commercial boulevards.

Cynthia Strathmann: I think state legislators are seeing that their constituents have been really hard-hit by the housing crisis—especially lower-income families. They really do want to do something about it, and they don’t see localities being able to solve the problem fast enough. I take them at their word that this is the source of their concern.

But what needs to happen is a recognition that some localities have done a pretty good job, or at least gotten started, on very deliberate interventions to increase housing in a way that will actually solve the problem. Trying to get ahead of that by rushing in with a broad brush is not the right response to the legitimate assessment that there is a problem getting enough housing built.

It’s hard to say that land use should always be under either local or state jurisdiction. What complicates the situation is that, while land use is generally dictated at the local level, the financial pushes and pulls often come from the state or even national level. Given that, I think there may be room for intervention at the state level—but it has to proactively account for the fact that lower-income communities have been, and will be, hit the hardest by housing insecurity.