Vince Bertoni on LA's Housing Element Update

As the city of LA is in the final process of updating the housing element of its general plan for 2021 to 2029. What's required of the Planning Department and what, given pending state legislation (SB 9 &10) is at stake?

Vince Bertoni: The housing element is something that's required by the state that all cities and counties have to comply with. And in Los Angeles' case, every eight years we take a look at what our housing needs are going to be over the next eight-year period of time. What is particular to this housing element cycle is that state law has changed a lot over the last few years, and that state law has asked cities and counties to really dig deeper when it comes to producing housing. Not just thinking about what their future needs are, but to make up for some past deficits when they didn't produce enough housing.

This is a very interesting and different housing cycle than we've had in the past, and we need to make sure that we look at how we can house all Angelenos of all income levels in an equitable way. This is also happening at a time when we're working to update all 35 of our community plans in a very short period of time. We have to look at citywide housing needs and apply it to the various communities of Los Angeles. 

What, for our readers, is city planning’s role?  And what limitations impede city planners in meeting the housing needs of present and future generations?

There are a lot of factors that really impact the economic success of a city, including the wages that employees are paid, as well as the cost of housing, but we do have some important tools. Our role there may not be as direct on how much people are making from a wage standpoint, but clearly, we do have tools that impact the housing supply: how much housing can be built, where it can be built, and how easy it is to be built. We also have tools available within planning that can require developers set aside a certain amount of that housing to be more affordable.

The average cost of housing in Los Angeles proper is estimated today to be about $750,000 per unit.  Wall Street’s largest investment players are reportedly bidding up and buying much of what is on the market and then renting their growing inventory.   Curiously, little affordable housing has been produced even in downtown LA in the last 10 years, despite massive investment in market housing supply. Is a one-size-fits-all state usurpation of local land use law that relies on upzoning R-I neighborhoods, the answer?

There's an argument that if you increase your supply, you can make housing more affordable. 

Do you accept that argument?

There's some validity to it. Planning and zoning in itself is putting limitations on how much can be built in an area, and if you look at areas in Los Angeles where we have actually built more housing recently, there's been more stability in terms of rental prices. Rental cost increases in general in LA have been lower in the areas that produce more housing: downtown, Warner Center, Koreatown, and Playa Vista. We have seen a correlation between housing production and rent.

In response to the economic crash in 2009, the largest owner of residential real estate in the five largest markets of California has been Blackstone and other hedge funds. Blackstone in the last six months has just doubled down on raising money to buy residential housing to convert it into rentals. Is that a healthy sign for the community?

The previous point I was making was that those areas have seen greater impacts in terms of adding to the housing supply. There are trends that we've seen that those parts of our city that have increased the housing supply the most have had relatively smaller increases in rents, and those are the specific areas that I mentioned. 

Now, we have other parts of the city that haven't seen as much housing go in and we have parts of the city where we have housing and single-family homes in particular that have been purchased by large corporate interests. When we look at our housing policies, we have to really make sure that we embed principles of housing stability, and make sure to guard against displacement.

Are Senator Atkins' and Wiener’s pending bills—SB 9 and SB 10— truly designed to preserve existing affordable housing units in LA? (See Richard Florida’s take.)  

No matter who it is, whether it's a corporation or an entity large or small, the principles of housing stability need to apply to everyone. And we have to really embed those principles within our policies in the city, whether that's the housing element or the community plans. 

Those are laudable goals, and readers could envision the city council embracing them, but do they not also come into conflict with the above-mentioned state legislation (SB 9 and SB 10); or, are those local protections likely to be usurped by upzoning?

There are basically three bills that are out there that are the focus of a lot of attention: AB 1401, which largely has to do with parking; SB 9, which has to do with being able to subdivide lots and put two units on each of them; and SB 10, which basically enables local government to put in policies for missing-middle housing. 

A few things to keep in mind: SB 9 cannot be used on parcels that are subject to our rent stabilization ordinance or occupied by a lower-income tenant, so SB 9 does have some of those protections in there presently. If you look at SB 10, the bill doesn't require that cities do anything, it just gives them the ability to streamline middle-density housing, and it allows cities and counties to put into place protections themselves. 

The President of LA’s city council has quietly introduced a motion/measure to place on the ballot next year that would refine the whole city's planning element and eliminate single-family zones on transit corridors. Are you engaged in discussions with the council president on this motion? 

Yes, City Planning presented a report relative to the motion you are referring to. It offered a number of proposed measures—mostly related to the Housing Element to address the issues raised in the motion, which touched on addressing the housing shortage in an equitable way and building off the model of the Transit Oriented Communities (TOC) program. The Planning and Land Use Management Committee approved the report as amended, then transmitted it to be considered in front of City Council.

The Planning Report (since inception more than 35 years ago) subscribes to civicly promoting intelligent, managed growth as the best way to plan cities. Is planning, not only in the city of LA but in the state of California, aligned with the viewpoint? Is there a civic and political respect for city planning? 

The state is going through a lot of change. It's not just COVID and all of the upheaval over a year and a half into the pandemic, but we're also dealing with an ongoing, severe housing crisis. This housing crisis has been a long time coming, and what you're seeing is a lot of elected officials at lots of different levels trying to figure out how to grapple with it. With that, you're looking at all cities and counties—not just the City of LA—to make sure that everyone's carrying their fair share. We make up 20 percent of the Los Angeles region, yet we produce 75 percent of all the housing.

Given LA City’s housing production numbers, do you embrace state legislative one-size-fits-all usurpation of local city planning functions? Of course, it would be instructive to learn what percentage of LA City’s housing is affordable, because, reportedly, SCAG affordable housing numbers are embarrassingly low?

When SCAG did their RHNA reallocation, they looked at the cities and counties producing housing, but they also wanted to make sure that it was done in a way that addresses our climate emergency. We can't be putting housing everywhere within southern California. 

We have to make sure that we're not putting housing in areas with high fire hazards or in areas subject to sea-level rise. We also need to be building near jobs and transit; there are some important principles that have to be embedded in where we put our housing. 

If private sector ownership/investment firms are given the absolute right by the State of California to up-zone their properties, is not the true benefactor of this public benefit the “landowner”?  And if the public sector then doesn't capture a portion of the value added, will cities have the ability to ensure the productions of affordable housing? 

In recent years, Los Angeles has embedded this idea of value capture into its land-use policies and has vastly increased the amount of affordable housing being created in new market-rate housing. There's the issue of how much housing you're going to build, and there's evidence that if you can build more housing, it's going to be more attainable to a broader group of people. 

But that's not going to reach everyone, so you do have to make sure that you have income-restricted housing that's available to those with the lowest incomes. That's something that has typically been called value capture and it's important to embed that in our housing policies. 

There are density bonus programs and TOC incentives, which you can see in both our Downtown and Hollywood community plans, where if developers go above their base rights, they have to provide more affordable housing. Our recent planning efforts have been incorporating this as an important strategy to growing our stock of restricted affordable housing.

Are there capture provisions in the state legislation? The YIMBYs are now on record as rejecting value capture. 

I do not believe SB 9 has it built into it. SB 10 leaves it up to the local agency; whether it's embedded or not, it doesn't prohibit it. When we talk about Los Angeles and value capture, it's important to remember that we talk about it in different ways.

We have the state density bonus ordinance and our TOC incentives. In our new community plans, we have developed what we call “base-bonus” systems. But many people forget we also have the Affordable Housing Linkage Fee, which applies to most new housing developments. It's like an inclusionary ordinance where you pay a fee first unless you put some on-site affordable.

The reason for repeatedly coming back to the pending state legislation (SB 9 & 10)  is because if adopted it is likely to dramatically change in material ways the role of every planning director and local city council, just like Prop 13 did more than 40 years ago. Is not the strategy of the Blackstone and Wall Street crowd very much like the historic “public storage” strategy of buy and hold: you buy the land, hold it, make income on it as public storage has done for decades, and eventually when the value of the land rises, sell for great profit. Are private institutional investors not just waiting for SB 9 and SB 10, because having owned that land prior to passage of those bills,  they will profit from an increase of their zoning? 

SB 9 and SB 10 are two different bills in my mind. SB 10 is just enabling local government; it's not putting any handcuffs on any cities or counties. Maybe no local agency finds it valuable, but it may allow some cities and counties to craft their own solution. 

As I mentioned, SB 9 has some protections in it. One of the protections is that it can't be applied to parcels that are subject to our rent stabilization ordinance or occupied by low-income tenants. It's still going through the legislative process, so by the time this interview is out it could be a very different bill.

The bigger picture issue is: what is that tension between the state and the locals? There's clearly an idea that the relationship between the state and local government agencies is going through a rebound driven by the forces in the state. What the state sees is local government not providing enough housing and that local agencies' land use and zoning practices are contributing to that. 

Our job in local government is to prove them wrong with planning that is crafted thoughtfully with input from our communities and that provides more housing for all income levels. All communities in our city are going to have to step up and be able to accept more housing. We have to do that in consultation and conversation, but it's really a rebalance that I see happening. It's important that when we look at strategies for providing more housing and growth, we embed principles of equity within them. 

Lots of things happen when we don't produce housing. The pressures and tensions on places like South Los Angeles and the Eastside are exacerbated because more people are seeking housing there when they can't afford it in other parts of the city. If we're not producing enough housing in the Westside of Los Angeles, then people who would have looked there will be looking to South and East LA. If we don't build enough in certain places, it creates pressures for displacement in other places, and those that are getting displaced are always the most vulnerable communities.

Former speaker and California State Treasurer, Jesse Unruh, once said, "Money is the mother's milk of politics." What interests in the State are paying (contributing to legislators) for this rebalancing?  What's missing in the housing supply conversation; especially when no one is tracking the money behind these rebalancing policy efforts? 

What we have to respond to in local government is thoughtful planning and good planning policy. As local government planners, when we're looking at planning communities, we're looking at the future, the places we're trying to create, and the environment that people want to live, work, and enjoy. When we plan communities, we have to be thinking about how we do it in the most equitable way. Are we planning equitably? Are we doing it in a way that is addressing the climate of urgency that we're in? When it comes to legislation, there's all types of interests from across the spectrum that come to the table. Anytime you're involved in state legislation, there's just lots of different voices that are being heard.

Is “success” of what the city of LA is doing in terms of increasing and incentivizing housing production the equivalent, better, or worse than what's going on in other places in the state, region, or country?

 We're a housing leader. We're producing more housing per capita than most anywhere in California. I think we've done some innovative things here in Los Angeles, especially if you look at how we've been planning near transit, but we can learn from other places.

When we look at creating housing policy and our community plans, we look at places that have been successful. San Diego is a model in terms of how they really started to grow thoughtfully and intentionally in their downtown area as well as in their various communities. We've looked at places like Portland, Seattle, and Denver and how they have really embedded principles of sustainability and equity in their planning. 

If you look at our new community plan for Downtown LA, there's a lot of innovation in that. One of those ideas that we've really grown is embedding the principles of value capture; whether it's through our incentives, our plans in Downtown and Hollywood, or what you'll be seeing in the future.

What explains why developers of means and scale, who face zoning challenges, increasingly are using the City’s specific plan approval processes?

Specific plans are just one of many tools that we have to really customize our zoning to the individual needs of the community, and I think those are important. In Los Angeles, our city is so large, we have 35 Community Plans, and within those community plans we try to shape our land use policies to really address the needs of those communities. Specific plans are a particular tool, and we have a newer tool called the Community Plan Implementation Overlay (CPIO) that we use.

But also, something that we're rolling out with our new community plans—starting with Downtown Los Angeles and continuing with the rest of the City—is our new ReCode, which is a hybrid form-based code that really allows in essence zoning itself to be customized to the individual neighborhood or community.

What LA had in the past was very general, fairly restrictive zoning that applied citywide. So, what happened in those places was that unless you had a specific plan, which was where we said,  ‘okay, we're going to increase the zoning in a thought-through manner’—Warner Center and Playa Vista are examples of that. Those are areas where we basically said we're going to allow you to build more, but we're going to make sure that the standards are very much tailored to this particular community. We had to do it through a specific plan because our underlying zoning tools weren’t nimble enough to do that.

What's exciting about the Recode is that we'll be implementing the ability to have that base zoning be much more customizable, and so you'll be able to really tailor the underlying zoning to the communities. So, we may be relying less on specific plans and Community Plan Implementation Overlay zones if we can customize the zoning. But it's basically the same principle, which is to allow development to proceed, under specific rules that everyone has had an opportunity to engage with so that what comes out is a more predictable process.

Might the City’s current planning process for reviewing  CBS Television City's redevelopment be an example of how L.A. is adapting zoning codes to developer demands for more density?

Well, we're just starting now, so we'll see how it all ends up. But that's particularly a case where we have CBS Studios—which is very much an important and iconic historic building in the city of Los Angeles—that developers purchased and, in essence, want to take some of the surface parking lots and put parking underground or in structures and then build some additional studios. The project is going to really bolster, if you will, our ability to maintain this as the center of the entertainment industry by providing more studio space, which is very valuable right now.

We are in the process to see how we can maintain the historic integrity of that original William Pereira building, which is iconic, and then bring in much needed studio space, but do it in a way that's going to be sensitive to the neighborhood that surrounds it, as well as the historic Farmers Market just to the south of it.  We are just beginning to engage with various stakeholders, and there's going to be a lot of robust conversation coming up in the future because there's going to be a lot of strong feelings, and I do believe firmly that this can all coexist in one spot. I think that we can both expand the studios there and address many of the needs of the communities around it. So, stay tuned and see how it all turns out

CBS Television City is but one studio seeking to expand in Los Angeles. Market demand for studio space appears to be insatiable. Yet production studios, some suggest, are probably the least sensitive to their surrounding communities/neighborhoods. How is your City Planning Department able to find a balance between the city’s desire for economic development and its responsibility to be the "steward of the built environment"?

I think what you just spoke to is what we do as planners. This is what planning is.  It's not easy. It's not simple. What we're talking about are these vastly important issues: What is the future of our city? What's the future of our city's economy? We have to have a strong economy as a city so that we have people, and jobs, and the wages that we need—because remember housing affordability is a two-part equation: how much is the rent or the mortgage, and how much money you're making. Those have to be in a balance, so we have to pay attention to the economy of the city, and so much depends upon the studios. It's not just the people who work at the studios, but the spillover effect of all the other businesses that rely upon those studios, so we have to pay attention to that.

At the same time, we have to be paying attention to our communities. This has to still be a very special place where people live, and we have to be doing planning in an equitable way. So, there are a lot of different things that are challenging, and we have to really take this climate emergency seriously. We really, really do.  So, when we think about things, these issues of equity and sustainability really need to be embedded in everything we do. But these are really tough issues because jobs are important, housing and housing affordability is important, and how people are connected and feel about their neighborhood are very important issues, and they're not easy ones.

Lastly, you closed out our last interview thusly, “I really do hope that there also will be a look back at our cities and consider how our cities are functioning, other design and where we could do better, which I would agree with put more emphasis on city planning and not less.” Is that still your hope?

Yes, it's still my hope, and it's also my hope that we look at our cities in a hopeful manner and that we look at the changes as the ability for our cities to evolve and change to be better places. I think that's important and especially with all the challenges we've had this last year and a half. It's easy to look at all the challenges that we've had and not be hopeful, but I think that planning fundamentally has to be positive. As we look at all the issues that are facing us, we need to be looking at solutions that are hopeful and positive. And that is something that I firmly believe in— that planning fundamentally is about hope. It's about hope for our future.