Los Angeles Housing Development Update, 1Q 2018

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Welcome to the latest installment of Abundant Housing LA’s Development Update!

This is where we dig into public City of Los Angeles data every 3 months to figure out what’s really going on in our housing market. How much housing are we permitting and building? How many of our new homes are single-family, large apartment/condo buildings, or “missing middle” housing? And how are we doing on Mayor Garcetti’s goal of building 100,000 new homes in 8 years? Where is the market headed?

In these updates we look at building permits (link above), which are an indicator of imminent construction activity, as well recent openings as measured by Certificates of Occupancy. You can read about our methodology for analyzing the data at the bottom of the post.*


Building Permits

For this post we’re looking at numbers through March 31st, 2018, the latest full quarter for which data is available. First up is a snapshot of overall permitting activity:

Here are the numbers behind the chart:

Next we break down the units per building, looking specifically at what share of total permits are for projects with at least 50 units:

Last for the building permit data, we look at how we’re progressing toward the Mayor’s goal of 100,000 new homes by 2021. Note that the goal’s start date is July 1, 2013, and the end date is June 30, 2021.


Certificates of Occupancy

Building permit data is extremely useful, but it doesn’t exactly correspond to what Abundant Housing really wants: homes for people to live in. For that we need to look at Certificates of Occupancy (CoO), which track actual building openings.

First a disclaimer though: The City controls whether it grants building permits, and how difficult or easy it is to receive those permits, but they don’t actually build the housing. CoO’s are what the developer needs when they finish the building so that tenants can move in, so it’s a measure of what’s actually opening to new residents. And since it takes a few years to construct a building, we’d expect to see a lag of 2-3 years between Building Permit and Certificate of Occupancy for the same project.

We raise these points because we want to make it clear that having fewer CoOs than building permits (which is what we see below) is not a failure on the part of the City. It’s what we’d expect when development activity has been growing, and it’s mostly out of the City’s hands whether building permits lead to real, on-the-ground construction. They almost always do, of course, but it’s not a guarantee.

With that said, here’s the data:

Within this time frame 2015 had the most building permits, so we should expect to see many of those units coming online in 2017 and 2018. That didn’t materialize in 2017, and it remains to be seen whether the pace picks up in 2018.

Next is the data underlying the above chart:

And last, we’ve repurposed our “progress” chart for Certificates of Occupancy rather than building permits, and our progress suddenly doesn’t look so impressive:

As always, we invite members and readers to share their own insights about what they read from the data. Let us know in the comments, and join us on Facebook and our mailing list to keep the conversation—and our advocacy—going strong.


*Methodology note: We are now excluding any building additions or alterations that add less than 5 units, which is a way for us to avoid counting permits that may not actually be adding new units. We also don’t count condo conversion permits, but do count adaptive reuse projects that add 5 units or more. Previous years’ numbers have been updated based on this new methodology so the data is comparable across time.

This change resulted in about 150 fewer single family homes in our calculations in previous years, and approximately 1,000 fewer single family homes in 2017. The jump in 2017 appears to be a result of recent changes to state and City law that permit the construction and conversion of accessory dwelling units. Since most of these ADUs appear to be legalizations of existing structures, we believe it’s fairer to not count these as “new” housing even though it’s great to see these homes being inspected and coming out of the informal housing market.


Expo Line Plan moving forward: the good, the bad and the hopeful

It is possible to legalize more homes on Los Angeles’ Westside.

Sorry, you may not have been paying attention:

It is possible to legalize more homes on Los Angeles’ Westside!

Technically the Expo Corridor Transit Neighborhood Plan (TNP) still needs to be passed by Los Angeles city council, but since amendments from the two city councilmembers that represent these neighborhoods have already passed, city council approval is expected. And it’s notable that, despite the reputation of local elected officials as reflexively deferential to the anti-growth movement, local councilmembers Mike Bonin and Paul Koretz, who represent two of the most affluent districts in the country, have both tacitly approved the TNP. Progress is possible.

More on Councilmember Koretz’s amendments to reduce housing capacity below, but it’s important to note how progressive the amendments offered by Councilmember Bonin were. His amendments increased capacity for homes in new mixed-use zones, increased affordability incentives within his council district to Transit-Oriented Communities Affordable Housing Incentives Tier 4, and allowed hundreds of single-family parcels to be re-zoned to allow for multi-family housing development (and we’re getting word that, no, the sky is not falling).

There aren’t many policy decisions that give everyone a win, but this sure feels like one:

  • For pro-housing advocates, Los Angeles has new zoned capacity for thousands of more homes.
  • For environmental advocates, the TNP re-orients development away from sprawl and towards infill
  • Affordable-housing advocates can point to capacity for hundreds of more affordable homes thanks to the legalization of more Measure JJJ-eligible base density, and
  • Pro-transit advocates can rest easy knowing that thousands more Angelenos will benefit from LA’s public transit investment

Unfortunately, one other group that got a win is a handful of homeowners in West LA. Despite the City Planning Commission’s decision to increase zoned capacity for housing along the corridor between the Sepulveda and Ranch Park Expo Line stations (as we recommended), Councilmember Koretz vetoed those upzones at the request of local homeowners. What was the source of this opposition? While the Westside Neighborhood Council’s (WNC) letter cites concerns about traffic congestion and the health of local businesses, the only tangible concerns the WNC articulated about these upzones were a desire to preserve the “garden home” style of several houses in the plan area, and concern about the impact of shadows on single-family houses adjacent to the planned upzone of Exposition Boulevard

It’s hard to take these concerns seriously. The proposed upzone from R2 to R3 on Exposition would not have changed the legal height maximum of 45 feet, so it wouldn’t have changed the… shadow profile?… of the neighborhood anyways.

As housing advocates, we must continue to shine a light on the need for more homes, especially in the birthplace of LA’s anti-growth movement: the westside.To that end, let’s quantify what was lost to appease a relatively small number of homeowners. The following is based on a pro bono analysis performed by pactriglo, a real estate analysis firm in Los Angeles:

Pico Boulevard between Bentley Ave. and Overland Ave:

  • Capacity in plan passed by Planning Commission: 1310 units, including 130 units for extremely low income Angelenos
  • Capacity in plan amended by PLUM Committee: 771 units
  • Units Lost: 539, including 130 affordable units

Exposition Boulevard between Sepulveda Blvd. and Midvale Ave:

  • Capacity in plan passed by Planning Commission:: 557 units, including 58 for extremely low income Angelenos
  • Capacity in plan amended by PLUM Committee: 109 units (i.e., status quo)
  • Units Lost: 448, including 59 affordable units

Total Units Lost: 987, including 189 units for extremely low income Angelenos

What did Angelenos get in exchange for sacrificing new apartments in this neighborhood? Nothing.
This is the cost of appeasing the anti-growth movement. We cannot afford to defer to the aesthetic concerns of the privileged few over the need for homes for all Angelenos. It’s what created the housing crisis in the first place.

Fortunately, the conversation feels it’s starting to change. In the past, most local stakeholders might have opposed new homes. But support from the Palms Neighborhood Council shows evolving attitudes towards development and housing, even in West LA. Rather than opposing rezoning for more apartments in their neighborhood, Palms embraced it, citing their neighborhood’s tradition of diversity and inclusion:

“The Palms NC supports the Expo Line TNP as it helps meet our neighborhood’s goals of new and affordable housing, street level neighborhood facing retail, and appropriate development near new mass transit investments. Additionally, more housing and walkable neighborhoods near transit stations is an environmental necessity. Without plans like the Expo Line TNP, we will aggravate traffic congestion, increase greenhouse gas emissions, and accelerate displacement in LA.”

If LA’s leaders commit to the values articulated by the Palms Neighborhood Council, then perhaps one day Los Angeles can finally become the truly inclusive city it was always meant to be. That’s a vision worth fighting for.

#housingforall

(this post written by Nick Burns, Abundant Housing LA’s West LA local leader)