Los Angeles Housing Development Update, 4Q 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 December 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 September 30, 2021.

Certificates of Occupancy

Building permit data is extremely useful, but it doesn’t exactly correspond to what Abundant Housing really cares about: 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:

Next is the data underlying the above chart:

And last, we’ve repurposed our “progress” chart for Certificates of Occupancy rather than building permits:

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 many 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.

Abundant Housing resolutions for 2019: Full time staff + More volunteers + Supporting members = More people in homes

by Brent Gaisford, Director of Abundant Housing

First let’s take a quick look back at 2018. We went big on the Expo Transit Neighborhood Plan. As a result of our education and advocacy work the plan was significantly improved, and in the coming years thousands of affordable and market rate homes for Angelenos will be built along the transit corridor. We also supported dozens of individual projects, which collectively will create 10,815 housing units, of which 1,021 are reserved and affordable for low-income families. We also stepped up our support for permanent supportive housing for the homeless, including the Rose Ave project in Venice and at the West LA VA campus. Finally, and in the biggest game changer for our future, we won the LA 2050 grant challenge in partnership with the United Way and the Inner City Law Center. Alongside a grant from CA YIMBY, that means we’re now in a position to fulfill some of our resolutions for next year.

Everything we’ve accomplished so far has been done by volunteers. The dedicated people who put in nights and weekends (and sometimes weekdays too – don’t tell our bosses) to fight for an LA where everyone can afford a place to live. In honor of our noble work, we call ourselves… The Dingbats.

I can’t believe what we Dingbats have done together. Now it’s time to go even bigger. We incorporated as a 501c3. And we’re hiring a full time Managing Director to lead the organization. I personally couldn’t be more excited to see AHLA get even bigger and better, but I’ve gotta admit I’m also a little nervous. There has been a heck of a lot of Dingbat blood, sweat, and tears put in to make AHLA what it is today, so we want to make sure we honor that going forward and pick someone amazing! So if you know someone incredible who you think might be interested in the gig (or if you are yourself), please share the job application or apply.

Having a full time Managing Director on board will help us fulfill our second resolution to bring more people onboard to volunteer as Dingbats. First, we’ll be creating new volunteer positions to write blogs and stories about the housing crisis and how to solve it, as well as creating infographics, videos, and other forms of media to educate decision makers and the public. We’ll be increasing our social media presence (housing gram, anyone?). We’ll help more people get involved in their local community by volunteering for a Neighborhood Council or speaking out at public meetings. And we’ll be recruiting new Dingbats to take the lead in new cities within LA County.

Our final resolution is the broadest. People who don’t have the time to volunteer can make a huge difference as well by becoming a supporting member and donating. Even if it’s only a few dollars, it goes a long way for a couple of reasons. First, a large, committed membership base is the most reliable kind of funding for a nonprofit. Second, that’s a huge selling point in convincing philanthropic types that we’re a worthy organization for bigger donations too.

Everyone who volunteers or donates to Abundant Housing each year will be a supporting member. All members will receive access to our forum. We’ve been trialing the forum within the Dingbats for the last couple of months, and it’s become the place where we do all of communication and coordination. We can’t wait to open it up more broadly so that everyone who cares about Abundant Housing can see what’s happening and join the conversation. When we outgrew our google group in 2016 we lost the ability for everyone in Abundant Housing to communicate with each other, and we’re so excited for this new platform to bring that radical openness back as we grow even bigger. Members will also get some cool schwag. Dingbat pins and these beautiful shirts are coming for sure, let us know if you have other fun ideas too!

With a full time Managing Director at the helm, more volunteers in the fight, and a dedicated group of supporting members we can transform Los Angeles. No one should live in fear of displacement or homelessness. LA can and should be a beacon, an affordable home to everyone who chooses to make a better life in our great city. The dream is housing for all. Let’s make it happen.

Expo Line Living is Hard to Find

by Anthony Dedousis

For over a year, I’ve lived in Palms and taken the Expo Line to work in downtown Santa Monica. Despite the Expo Line’s flaws, I love being able to read and relax on the train and to leave the car at home. Over 64,000 daily Expo Line commuters seem to agree.

On the way to and from work, the train carries me past a construction site; the 595-home Linea project, a set of mixed-use residential and commercial buildings adjacent to the Expo/Sepulveda Metro station. I’ve watched the project blossom: a year ago, it was a dirt field, and today, it’s a set of buildings well on their way to completion. It’s an example of the kind of dense development Los Angeles needs in order to reduce car congestion and pollution; more people living and working near Metro means less traffic and sprawl.

The 595-home Linea project, adjacent to the Expo/Sepulveda Metro station.

The Westside extension of the Expo Line (from Culver City to Santa Monica) opened in May 2016, and recently, I became curious to know how much housing has been planned near the new stations since they opened. Also, as a newer Palms resident, I also wanted to learn more about AHLA’s role in organizing pro-housing activists in the neighborhood.

Using the city’s database of all new building permits (effectively, new housing construction), I tabulated the number of new homes permitted in the ZIP codes where the new Metro stations are located, for the two years prior to the extension opening (May 2014 through May 2016) and the two years afterward (May 2016 through May 2018). Then, I honed in on the housing development located within a half-mile radius of the four new Metro stations in the city of Los Angeles: Expo/Bundy, Expo/Sepulveda, Rancho Park, and Palms.

Figure 1: New Expo Line stations and half-mile radii

At first glance, it looks like Metro-adjacent new housing did accelerate post-opening: 818 homes were permitted in the two years after the Expo Line extension opened, compared to 236 homes in the two years prior (an increase of 250%). But almost all of this increase came from two projects: a 100-unit building near Expo/Bundy and, you guessed it, the 595-unit Linea project at Expo/Sepulveda that I see every weekday. If not for those two projects, new housing would actually have decreased by 50% after the opening of the Expo Line extension.

When we analyze housing growth by station, the impact of those two projects becomes clearer. Almost all the growth near Expo/Sepulveda came from the Linea project (595 out of 624 units). There are only small upticks near Expo/Bundy and Palms, and no growth in Rancho Park, an area with primarily one-family houses.

Figure 2: Homes permitted within a half-mile of new Expo Line stations

When we look at the size of the new proposed buildings, it becomes even clearer that almost all the new housing in the Expo/Bundy and Expo/Sepulveda areas are a result of the two projects highlighted earlier, and that very few midsize apartments (5-50 units) and multifamily houses (2-4 units) have been permitted. No apartments or multifamily homes have been permitted in Rancho Park.

Figure 3: Percentage of homes permitted post-Expo Line opening, by building sizeCould overall demand be low for new housing in these Westside neighborhoods? I compared new housing development within the half-mile radii surrounding Metro stations to the portions of these ZIP codes further away. In both areas, development was 130% higher in 2018 than in 2014, two years before the Expo Line extension opened. (The chart likely understates 2018 housing development, since the data are only current as of October.) It seems unlikely that Westside housing demand fell between 2016 and 2018.

Figure 4: Number of homes permitted annually in ZIP codes 90025, 90034, and 90064

This lack of new housing near Metro stations is largely due to the city’s zoning policy. As soon as you read the words “zoning policy”, your eyes probably glazed over, but these esoteric rules have a major impact on housing development and affordability. Much of the Westside, including blocks near Expo Line stations, is zoned for one- and two-family houses. Historically, city councilmembers have opposed efforts to add housing on the Westside, for fear of antagonizing vocal homeowners.

The two Metro-adjacent developments previously mentioned are exceptions. The Expo/Bundy project is being built on a former parking lot, and the Linea development is on land that had been zoned as industrial. As a result, they faced less community opposition (though not none; as originally planned, Linea would have had 50 more homes, a supermarket, and a Target). Still, zoning policy has stifled the development of “four-plexes” (four-family houses) and small apartment buildings, which could put a dent in the gap between housing supply and demand without years of construction.

Los Angeles has begun taking slow steps towards increasing the housing supply near mass transit. In 2016, voters approved Measure JJJ, which allows taller, multifamily buildings to be built within a half-mile of a Metro station, as long as the project sets aside a share of homes for low-income residents and pays union wages. The city finalized its Transit Oriented Communities guidelines in September 2017.

Los Angeles is also updating its zoning regulations around the new Expo Line stations. In July, the City Council approved the Expo Line Transit Neighborhood Plan (TNP), which would encouraging denser, more walkable development within a half-mile of Westside Expo Line stations.

However, the process of developing the plan has been long and cumbersome. Intended to be completed in two years, the TNP is on year six and remains unimplemented even after the City Council’s approval. A nuisance lawsuit from an organization with a history of aggressively opposing transit-oriented development has created an additional roadblock. This drawn-out, uncertain process has likely hurt Expo-adjacent housing production over the past few years, as builders and property owners wait for the TNP to be finalized and put in place.

Furthermore, the approved plan is only a mixed success for housing advocates. In 2018, AHLA aggressively campaigned for revisions to an overly cautious first iteration of the Expo Line plan. As a result, the final version was an improvement: it increased the amount of space dedicated to denser, mixed-use development, upzoned enough space for 4,400-6,000 new homes over the next 15 years (including a cluster of single-family houses near Expo/Bundy station), and contained an affordable housing requirement. But the plan was subjected to political interference, as a provision that would have upzoned Pico Boulevard near Expo/Sepulveda and Rancho Park stations was removed at the request of the city councilman for that district, Paul Koretz. Voters in Koretz’s district who are tired of traffic and rising rents should reflect on his statement to the Los Angeles Times during the TNP debate: “I don’t think people want to see significant rezoning around single-family neighborhoods whether they’re near transit or not.”

The slow, piecemeal progress in increasing the housing supply near the Expo Line shows that building mass transit alone isn’t enough, especially when zoning rules favor the status quo. It also highlights the impact that advocates like AHLA can have on planning policy: when the Expo Line TNP is (finally) implemented, we expect it to dramatically increase the amount of Metro-adjacent new housing. There are two major opportunities on the horizon for advocates to fight for faster, city-wide progress on housing:

1. Los Angeles is currently developing a Transit Neighborhood Plan for the stretch of Mid-City that will be served by the Purple Line, starting in 2023. Housing advocates must push for denser new housing along major streets and softer off-street parking requirements, and must pressure the city to complete the TNP in an efficient timeframe. Angelenos facing rising rents can’t afford another 6+ year process.

2. The California State Senate is currently debating Senate Bill 50, which would permit 4 to 5 story multifamily residential buildings to be constructed within a half-mile of many rail stations and job-rich areas. AHLA strongly endorses SB 50: it has the potential to achieve transformative change throughout Los Angeles in one fell swoop, rather than through a Sisyphean, years-long effort at the neighborhood level.