City Proposes Strategies to Meet Required Housing Targets

To help address the current housing crisis, and to make up for decades of slow new housing production, the City of Los Angeles is now being required by the state of California to create more than 450,000 new housing units by 2029.  To make sure it can hit that target, the city is also now in the process of revising the Housing Element of its General Plan, known as the Plan to House LA, to take a two-pronged approach to stimulating housing production:  zoning changes that will make more housing legal in more places across the city, and specific kinds of incentive programs that won’t change any underlying zoning, but will promote specific kinds of housing, and/or housing production in specific areas.

To help explain this process and why it’s necessary, and to collect feedback on the city’s efforts so far, the Department of City Planning launched a new Housing Element Rezoning website and held a series of public webinars in March.  The Buzz sat in on the third of these sessions, held on March 30.  According to a live poll taken by the meeting staff, the attendees were almost equally divided between renters and homeowners, from more than 30 zip codes around the city.

Why Planning for Housing is Critical for LA’s Future

According to City Planning Associate Betty Barberena, who opened the March 30 presentation, almost two thirds of Angelenos are renters, and Los Angeles is now the most unaffordable rental market in the country. As of January, 2023, households need to earn at least $126,000 per year to afford the median rent for a 2-bedroom apartment.

And when you combine those prices with the city’s current lack of housing, it has also resulted in LA becoming the “Most overcrowded major city in the U.S.”

In other words, Barbarena said, Los Angeles now faces one of the most severe housing crises in the country, including the highest rate of unsheltered homeless persons, the fewest number of homes per adult in any major U.S. city, intense displacement pressure, unattainable home ownership (the average price to purchase a home in Los Angeles is now $890,000), longer commutes to work (which adds to air pollution), and many young adults either not having children or leaving the area to raise their families.  So planning for and building more housing is “critical to LA’s future,” Barbarena said, as is dealing with the economic, social, and health inequities that go along with the housing crisis.

And those inequities are significant. According to Barbarena, the housing shortage is felt most dramatically by women, youth, and people of color.  For example, in every ethnic group, women spend a higher percentage of their income on rent than men…and among the unhoused, 42% are Hispanic/Latino, 33% are Black/African-American, and only 20% are white.  And housing disparities, Barbarena noted, tend to feed inequities in other aspects of people’s lives.

The Housing Element and RHNA – What are They and Why are They Important?

Barbarena explained that the city undertook a comprehensive revision to the Housing Element of the city’s General Plan between 2019 and 2022, and the new Housing Element establishes the city’s official goals, policies, objectives, and programs for housing its residents for the eight-year period from 2021-2029.

Barbarena also explained that amount of new housing the city needs and will be required to build is determined by something called the Regional Housing Needs Assessment (RHNA), which is calculated by the state, and uses several factors to determine if a city will have enough development capacity to meet its housing needs.  According to the RHNA, Barbarena said, the City of Los Angeles needs to produce 486,379 units of new housing by 2029, but can only create 230,964 units under current zoning limits…which means it needs to re-zone various parts of the city to allow for an additional 255,433 units.

Senior City Planner Matthew Glesne also explained that the RHNA numbers are much higher this year than the last time they were calculated eight years ago, because the state changed how the targets are formulated.  In the past, Glesne said, the major factor was population change, but this time around, he said the focus was how many people vs. how many housing units each city has…which may give a better picture of the growing housing shortage over the last few decades.

Also, to put the numbers in a different perspective, Barbarena reported that to meet the new RHNA goals, Los Angeles will need to permit at least 57,000 new housing units per year for the next eight years…while it’s currently producing only about 20,000 new units annually.

And, yes, there will be penalties if the city doesn’t reach its targets.  One of those could be the “Builder’s Remedy,” which would require the city to approve any proposed housing project, as long as it includes a certain number of affordable units.  (The City of Santa Monica has had a Builders Remedy in place since October of last year.)

Zoning Changes

Because the city will now be required to produce more housing than its current zoning allows, Barbarena said the recent Housing Element revisions were done with an underlying assumption that many parts of the city will need to be re-zoned to allow more housing.

She said the re-zoning, which must be adopted and in effect by 2025, will be handled mostly through revisions of the city’s 16 Community Plans and three Neighborhood Plans.  Some of those, such as the Hollywood Community Plan (which has been approved but not yet implemented) will be revised later to reflect the zoning changes, while other community plan updates (such as our Wilshire Community Plan) will be done between now and 2029, after the new zoning goes into effect, so those plan updates will incorporate the new zoning scheme in the update process.

Barbarena said the rezoning strategy proposed in the new Housing Element for Los Angeles will be based on several factors:

• Rezoning requirements created by the State of California’s Housing Element
• Affirmatively Furthering Fair Housing (AFFH) objectives
• Citywide housing priorities developed while drafting the new Housing Element
• Input from both the public and the Los Angeles City Council.

Also, she said more than half of the newly re-zoned areas must be suitable for low-income housing and:

• Allow multi-family housing by right
• Allow at least 20 housing units per acre (and at least 16 units per site)
• Have access to all utilities
• Be more than 50% on residentially zoned sites (or all sites must allow 100% residential use, with no commercial use)

Finally, Barbarena said, the rezoned areas must “Affirmatively Further Fair Housing” (AFFH), which means “taking meaningful actions to combat discrimination, which overcome patterns of segregation and foster inclusive communities free from barriers that block access to opportunity.”

In other words, the rezoning must increase residents’ access to various kinds of opportunities, to make up for historic inequities.  (In the past, most of our densest housing was built in low-income, low opportunity areas, and only 20% of land in high opportunity areas was zoned for multi-family housing.)

She said the City Council has endorsed these goals of the new rezoning program (as did 79% of the webinars in a live poll taken at this point in the session).

Finally, though, Senior City Planner Blair Smith clarified, in response to a question from the audience, that this doesn’t mean the Planning Department is now discouraging density in low opportunity areas.  Many fairly dense developments are still happening in those areas, she said…but because density has been more frequent in low opportunity areas for decades, the city is now shifting its focus to increasing density in high opportunity areas citywide, where it’s always been harder to build new housing because of generally lower-density zoning.

The Citywide Housing Incentives Program

Taking over the presentation at this point, City Planner Elizabeth Gallardo explained that in addition to the zoning changes outlined above, the other major effort being developed in the Housing Element Rezoning Program is a new housing incentive scheme, which doesn’t change any underlying zoning, but which will provide development strategies and incentives to increase housing production, and can be targeted to specific parts of the city through the updated Community Plans.  In general, Gallardo said, the city is developing six housing incentive strategies: Adaptive Reuse,  Updates to Affordable Housing Incentive Programs, Opportunity Corridors, Affordable Housing Overlay Zones, Missing Middle Housing, and Process Streamlining.

Adaptive Reuse

Adaptive reuse is the conversion of empty or under-used buildings (of which there are many since COVID-19 hit) to residential use – such as the current Farmers Insurance building project recently approved on Wilshire Blvd.

Gallardo said this is the most environmentally friendly way to create new housing units, and it’s already been successful in certain parts of the city (especially downtown, where many old office, retail, and hotel buildings have been converted to residential lofts and apartments). So the rules developed for those areas, she said, can be expanded for use in other parts of the city.

A new Adaptive Reuse Ordinance, Gallardo said, would remove barriers to residential conversion of commercial buildings, and would streamline and accelerate the approval process by providing by-right permission for adaptive reuse of buildings at least 25 years old, allowing more flexibility in unit sizes, and providing relief from existing development standards.  The new ordinance is still in the works, but Gallardo said a draft is expected to be released for public comment later this spring, and Senior City Planner Michelle Levy said the Planning Department will hold a webinar about it at that time.

Gallardo did say, though, that while the city does want to simplify adaptive reuse conversions in commercial zones, it doesn’t want to open the door to housing in some other areas, such as industrial/manufacturing zones, because of potential health effects and other unintended consequences.

Updates to Affordable Housing Incentive Programs

Another way that more housing can also be encouraged without zoning changes, Gallardo said, is by updating current affordable housing incentives such as the city’s current Density Bonus and Transit Oriented Communities programs, which offer developers additional density, height, and parking relief in exchange for including a certain percentage of affordable units in their projects.

According to Gallardo, the Density Bonus and TOC programs have been very successful so far, generating more than half of all units proposed to the Planning Department between 2018 and 2022. More specifically, she said, more than 50,000 new units have been proposed under the TOC program, including more than 10,000 affordable units…and more than 21,000 new housing units have been proposed under the Density Bonus program, including more than 7,000 affordable units.

Glesne also explained, in response to a question from the audience, that the current version of the TOC, established after voters passed Measure JJJ in 2016, is scheduled to expire in 2026, so the city will be incorporating elements of the original program, more specifically aligned and refined for specific communities, into the updated Community Plans moving forward.  Glesne said these inclusions in the Community Plan updates will provide an opportunity to build on the success of the current TOC program (such as targeting many new housing units for Extremely Low Income residents, who are not served by other housing incentive programs), and to build on it in other ways, such as creating different affordability levels, especially in higher market areas.

Opportunity Corridors

Gallardo explained that “Opportunity Corridors” are streets currently under-used for housing, but which have “important lifestyle amenities” such as services, transit access and jobs.  So the goal on these high opportunity streets and thoroughfares, she said, would be to provide both the opportunity to build housing, and incentives for the inclusion of affordable units in new developments.

A new Opportunity Corridors Program would prioritize corridors near transit, tailor specific incentive programs for both residential and commercial corridors, scale development opportunities for both low and high density areas, and create transitions between the corridors and adjacent residential neighborhoods, where there could be things like slower streets, shade trees, and healthier environments.

Affordable Housing Overlay Zones

Gallardo said creating overlay zones to incentivize affordable housing was first explored in a planning report adopted by the City Council in 2022.  A new Affordable Housing Overlay would create tailored incentives in the overlay area for 100% affordable housing, especially in places where it’s hard (or too expensive) to build affordable housing now.  These incentives would help developers save time, money and risks, while also furthering AFFH opportunity goals for affordable housing.

Gallardo AHO incentives could include things like an 80% density increase, half the parking requirements per unit, and one additional incentive chosen from a list of four possibilities.  AHOs within half a mile of a major transit stop and in a low VMT area, Gallardo said, could also offer unlimited density for 100% affordable developments, no parking requirements, and a 33′ or 3-story height increase over current zoning.

An AHO program could also provide additional incentives in higher and moderate resources areas, or in lower opportunity areas not currently eligible for other incentives.  And it could be tailored in various locations to include land owned by faith-based organizations, publicly owned land, and parking zones.

Missing Middle Housing

According to Gallardo, “missing middle” housing “refers to low-scale buildings that contain more than one housing unit, and are usually built to the “middle” in form, scale, and affordability between single family-and larger multi-family buildings.

This type of housing  can include bungalow courts, duplex/triplex/fourplex and six-plex buildings, townhouses, courtyard apartments, and walk-up rowhouses.  Many of these already exist in various places throughout the city, Gallardo said, but there are also many areas where they are not currently found.

Gallardo said the goals for missing middle housing are to:

• Integrate housing more seamlessly into existing neighborhoods
• Cultivate a more walkable urban environment to support local retail, public transportation, and hub jobs
• Provide more diverse housing sizes
• Provide more naturally occurring affordable and income-restricted affordable housing in opportunity-rich areas
• And to create new ownership opportunities

She said the city will explore different kinds of low-scale multi-family housing, different potential locations, and different ways to create it, such as:

• Behind commercial corridors and on residential corridors in Higher Opportunity Areas
• Developing form-based tools for projects already eligible for incentives to encourage a lower scale citywide
• And update the city Accessory Dwelling Unit (ADU) ordinance

Smith also explained that because most housing incentive programs target those at the lowest end of the income scale, who have the deepest needs, there are no current incentive programs for rental units for people with moderate incomes…or for spaces large enough for families.  But those are definitely needed, she said, as many families are currently leaving LA.  Smith said that if we do meet our low income housing targets, we might be able to get some new incentive programs for middle-income housing…but low-scale developments are hard to make economically feasible for developers, so missing middle incentive programs will have to find ways to address that.

Process Streamlining

One big barrier to new housing development right now, Gallardo explained, is “lengthy and complicated entitlement and permitting processes” (see chart below) which cause delays, increase uncertainty, and increase costs for developers.  As a result, many potential housing projects never get approved, and never get built.

So the city’s final strategy to increase housing production without requiring zoning changes will be streamlining approval processes to remove procedural barriers and create more efficient and expedited approvals. This means more ministerial sign-offs, especially for projects that include affordable units, which will be both faster and more transparent.

Smith said city officials introduced 45 new proposals for streamlining housing approvals last year.  The proposals address things like removing barriers, ministerial approvals, clearer review standards, and general increases in clarity throughout the process. “This is a major process issue we need to resolve,” she said.

Next Steps

Gallardo said the city is currently in the “listening” phase of the Housing Element Rezoning program.   In addition to the three webinars in March, this phase will also include presentation and feedback sessions for each of the various strategies described above, including a webinar on a new Adaptive Reuse Ordinance in May, and sessions later this spring and summer on Tenant Protections and Process Streamlining, an Affordable Housing Overlay, Opportunity Corridors, and Missing Middle Housing.

Gallardo said the Planning Department plans to share a first draft of its new rezoning ordinance sometime this fall.  And that will be followed by another round of outreach and feedback, a revised draft published next winter and, if all goes well, final adoption next spring – a schedule that will hold the city to its state-mandated February, 2025 deadline.

Q&A

In addition to the topics above, attendees at the March 30 webinar had questions about several issues related in various ways to increasing housing production which weren’t specifically addressed in the presentation.  These included:

How is the city helping to preserve trees with such big increases in development and construction?

Levy said the city is working on several tree-related programs at the same time the Housing Element is being revised.  These include a Protected Tree Ordinance and the Wildlife Ordinance for hillside areas.  She said the city also now requires a tree disclosure statement for all housing projects, and developers are not automatically allowed to remove street trees.  Also, said Levy, the Bureau of Public Works is now taking a stronger stance on trees, and the city is updating its Landscape Ordinance to help preserve additional mature trees (a draft of that one will be available later this year).

What is the city doing to address vacancy rates, and how do vacancies affect the need for new units?

Glesne said vacancies are definitely considered in the calculations of new units needed…but LA vacancy rates are actually among the lowest in the state and nation right now – currently in the “low 3%s.”  A healthy vacancy rate, he said, is considered to be 5-7%.  Glesne said that’s one reason rents are so high these days.  But the city does want to make sure homes are used for housing and not for things like short term rentals, though the percentage of those has gone down in recent years.  He said one strategy to help drive down vacancy rates even further could be a vacancy tax.

How can Planning prevent displacement of low income workers in high opportunity zones?

Glesne said this is not only very important, but is “built in as one of our top-line considerations” in the various strategies for encouraging new housing.  He said the city is definitely considering tenant benefits and protections such as no-net-loss replacement of affordable units.  But such provisions do stop some new housing projects from happening.  Currently, Glesne said, the replacement ratio for affordable units is 3:1…but if we push it to 1:1, it could affect the number of new projects.  At the same time, though, he said we do need to preserve affordable housing where it’s actually needed, especially in high opportunity areas, so the city is doing a feasibility study, and considering measures such as tenant right-to-return policies.  Also, he noted that the city did just pass new tenant protections, which are among the strongest in the U.S.

How are you taking environmentally sensitive areas into consideration?

Smith said each of the six strategies discussed above does attempt to balance housing needs with other considerations…but because the city is focusing on promoting new housing in areas with transit, jobs, and other services, the proposed strategies shouldn’t really affect wildlife and other environmentally sensitive areas.

How can planning ensure we don’t overwhelm our existing infrastructure and other resources?

Smith said state law requires developers to demonstrate that there is adequate infrastructure to support their proposed projects.  And new developments are required to install and pay for any new infrastructure that’s needed.  She said that during the planning phase for each project, there are coordinated meetings with all city departments to make sure all infrastructure needs are taken into consideration.  Also, she said, much of the money for new parks and open space actually comes from developers – every project contributes.

What is the definition of a “major transit stop”?

Glesne said there are several definitions, but the most common phrase, used in the Transit Oriented Communities and other development programs, is location near “high quality transit” –  which means within half a mile of either a rail or Bus Rapid Transit (BRT) stop, or from the intersection of two bus routes on which buses run at least every 15 minutes in the same direction.

Will there be design guidelines for the new incentive programs?

Smith said the city is considering design standards, but not guidelines.  She said this is a tricky subject, especially for missing middle housing, but without getting too prescriptive about aesthetics the city can set requirements for things like height, open space, and amenities requirements, which it is working on.

What if your home is in an area identified for rezoning?

Glesne said there is a map of sites that may be candidates for rezoning, which the city was required by the state to produce, but it’s still subject to refinement through the process this discussion is part of.  Glesne said the city still wants feedback on the rezoning proposals, and at this point, “everything is up for refinement.”  Also, he said, there’s a concept survey tool on the city’s new rezoning website.  And there will be many more opportunities to provide feedback on the rezoning proposals in the next few months.  So nothing is final yet.

What about undoing existing downzoning that was previously done with tools such Q conditions?

Glesne reiterated that the new Housing Element itself won’t change zoning, but will instead suggest zoning changes and tailor incentive programs for different kinds of areas throughout the city.  The actual zoning changes, he said, including those to possibly remove Q and D conditions, will be done in the new Community Plan updates, especially in high opportunity areas.

What if there’s opposition from stakeholders on rezoning in their areas? What are the steps for engagement?

Glesne said participating in these webinars is the first step, and the city is eager to gather stakeholder input.  He said there will also be many other opportunities to explore and understand the concepts involved, and with deeper follow-up discussions on specific topics.  He said Planning will also reach out to the public through various local organizations, and through public events such as Ciclavia.  People can also submit feedback through the new rezoning website, and there will be several public hearings on the proposals as they make their way through the city legislative process.  “We’re just getting started,” he said.

Stay Connected

A full recording of the March 30 webinar is available at https://www.youtube.com/watch?v=J4L3D9XtIdk.

More information is available at the new Housing Element Rezoning Program website at planning.lacity.org/housing-element-rezoning-program.

If you still have questions or would like to submit comments, email [email protected].

Finally, you can also sign up to receive updates about the evolving program at https://planning.lacity.org/plans-policies/housing-element-rezoning-program#contact.