Monday, March 14, 2016

The Devil’s in the Details – LA Speculators Can Still Scam the System in the Build a Better LA Initiative

 

LOS ANGELES

Scam #1. Label neighborhood opponents NIMBY’s, which stands for Not in my Backyard. The implication is that the only problems with the speculators’ projects are their locations in areas where local luddites are so stuck in their backward ways they just cannot get on board with big, beautiful, trendy projects. 
Scam #2. Layer on zoning and environmental conditions. To overcome local opposition to such discretionary actions as zone changes, zone variances, General Plan Amendments, and their accompanying environmental reviews, City Planning’s staff reports and approval letters add on pages of conditions – mostly boilerplate -- to mollify critics. As most LA neighborhoods have discovered, however, these conditions are not enforced by the Department of Building and Safety. Furthermore, the Department of City Planning does not have any enforcement authority. The result is that few conditions are implemented, and to make even that happen, neighborhoods must launch waves of complaints to Buildings and Safety, City Planning, and Council offices. When that fails, some communities then go to court to make sure that projects comply with the conditions that padded their approval letters. 
Scam #3. Adopt zoning overlay districts. In combination with case-by-case zoning and environmental conditions, LA also has an alphabet soup of overlay zoning districts, such as Specific Plans (SPs), Historical Preservation Overlay Zone Districts (HPOZs), Residential Floor Area Districts (RFA), and Interim Control Ordinances (ICOs). What they and all other overlay districts have in common is their small area. They are also precise enough to deal with localized opposition to a citywide zoning problem though superficial fixes, such as design review. This scam then either keeps existing zoning in place or slightly modifies zoning in a small area, allowing most of Los Angeles to stay open to unrestrained real estate speculation. The squeaky wheels get a squirt of oil, while everything else creeks and groans onward. 
In combination, various zoning overlays now apply to 60 percent of the private parcels in Los Angeles. Since this massive mosaic is nearly impossible to enforce, many projects manage to squeeze through. Plus, all of these conditions and overlays have formal escape hatches that allow developers to circumvent them. When these real estate speculators really want their way, few overlay restrictions ultimately make a difference. 
Scam #4. The zoning ordinance loophole, a refinement of Scam #3. In these cases, overlay districts or even city zoning ordinances are front-loaded with wonderful “Whereas” clauses and appealing zoning provisions. But, the devil is in the details because the small print invariably contains loopholes that completely subvert the ordinance. Imagine a large wooden beam that has been totally hollowed-out by termites. It looks like beam on the outside, but there is nothing on the inside. 
Consider these examples. 
  1. In the case of Beverly Grove, where I live, local residents were able to meet former Councilmember’s Jack Weiss’s arbitrary level of 70 percent local opposition to mansionization, as measured by petitions. Like the Egyptian Pharaoh in the book of Exodus, good ol’ Jack eventually relented, but he still got his way through a loophole. He made sure that the Beverly Grove Interim Control Ordinance he sponsored only prohibited McMansions larger than those that his real estate buddies were building and selling. 
  1. The Weiss loophole strategy evolved into even more effective loopholes when, in 2008, the City Council adopted the Baseline Mansionization Ordinance. It, too, had wonderful “Whereas” clauses and appealing provisions. But, it was riddled with so many loopholes that it allowed houses to legally swell up by 42 percent through a combination of bonuses and exceptions that permitted the very McMansions that this ordinance was supposed to stop.  
  1. The same loophole strategy may now be at work for the amendments to the Baseline and Hillside Mansionization Ordinances that that the City Council directed Department of City Planning to prepare. Despite clear instructions from the City Council to remove any and all exceptions and bonuses that promote mansionization, City Planning’s initial draft keeps the proportional stories bonus, without any convincing rationale. And, even worse, their draft amendments allow unlimited balconies, decks, and breezeways, as long as they have a lattice roof or are uncovered. These architectural features have no size restrictions whatsoever. 
Loopholes in the Build Better LA initiative countering the Neighborhood Integrity Initiative 
But, all of these loopholes are child’s play compared to the loopholes in the Build Better LA counter-initiative to the Neighborhood Integrity Initiative that I and other CityWatch writers have favorably written about in recent weeks. 
For a quick review, the Neighborhood Integrity Initiative will prohibit the City Council from taking any legislative actions, specifically zone changes or General Plan Amendments, to approve mega-projects at the parcel level. It also requires a comprehensive update of LA’s General Plan, and it will only allow future zone changes and General Plan Amendments to apply to large areas, not individual parcels. 
The counter initiative follows the loophole strategy refined in the previous examples. It leads with wonderful Whereas clauses that accurately describe LA’s housing crisis, and it would allow parcel level zone changes and General Plan Amendments for projects that contain certifiable affordable housing and are built by unionized workers. 
So far so good. Who can oppose the construction of affordable housing, and who can oppose hiring construction workers who have the benefits of bargaining units and resulting contracts that ensure fair compensation, safe working conditions, job protection, and other perks, such as health insurance? 
But, before you wax too positive over this counter-initiative, you need to carefully read the counter-initiative’s major loophole because that is where the devil resides. After the introductory pages of background information and ordinance language describing LA housing crisis and the need to use unionized labor, the sneaky loophole, of course, innocuously appears. It is, true to form, buried at the end of the document and undermines every wonderful provision that preceded it. So there will be no confusion on how this loophole works, here is its exact wording: 
“Sec. 11.5.11.(g) The City may, by majority vote of the City Council, adjust the affordable housing percentages set forth in this section upon a showing of substantial evidence that such adjustments are necessary to maximize affordable housing while ensuring a reasonable return on investment for Developers.” 
In other words, when affordable housing requirements conflict with the self-defined bottom line of developers, the developers can make a bee-line for City Hall, undoubtedly with envelopes in their pockets for Councilmembers’ Office Holders Accounts. Given the Councilmembers’ aspirations for second and third terms, as well as to higher offices, legal and quasi-legal campaign contributions should also be expected. 
In effect, the exact pay-to-play practices that have prompted the Neighborhood Integrity Initiative will continue through the Build Better LA Initiative. The power of the City Council to enact parcel levels legislative ordinances will be increased, not reduced, through this loophole. Given the loophole’s vague language (i.e., “reasonable return on investment”), the lack of any precise threshold of profitability, the non-existent standards of financial evidence, the missing formal review process, and the failure to hold public hearings and appeals on developers’ requests for the City Council to waive affordable housing requirements on a project-by-project level, this loophole well deserves Jill Stewart’s alternative title, “The Backroom Bonanza Initiative.” 
In future columns I will examine other loopholes in the Build Better LA/Backroom Bonanza Initiative. In particular, I will look at the vague language expanding the Density Bonus program that I discussed earlier to all areas within a half-mile of a subway station or major bus stop. As with SB 1818, City Planning will again automatically grant all such requests. Evidence requirements, if any, will be determined at a later date in the form of regulations prepared by the new Director of Planning. The normal scrutiny usually given such criteria, when they are prepared as ordinance, will not take place. 
In other words, there will be no public documents, no staff reports, no public hearings, no debates and votes by the City Planning Commission and the City Council, and, naturally, no right of appeal by anyone who objects to the standards and procedures ginned up by City Planning to implement the Initiative. Likewise, the actual waivers will be totally insulated from any type of public review. 
We can assume that the real estate speculators behind this counter-initiative are the same people who will request exemptions from the ordinance’s provisions. They will also be hard at work behind the scenes at City Hall to ensure that City Planning’s waiver requirements are as flimsy and permissive as possible. 
At this point, it is only a question of time until the corruption and fraud that prevails at City Hall, which would get a vital transfusion through the Build Better LA/Backroom Bonanza Initiative, are uncloaked for public view. 

(Dick Platkin is a former LA city planner who reports on local planning issues for City Watch LA. Please send any comments or corrections to rhplatkin@gmail.com.) Prepped for CityWatch by Linda Abrams. 

Neighborhood Integrity Initiative Won’t Block Affordable Housing – Critics Should Back up their Claims!

 

LOS ANGELES
PLATKIN ON PLANNING-If you are concerned about planning issues in Los Angeles, then you have undoubtedly heard about the Neighborhood Integrity Initiative, and perhaps a counter-initiative, the Build Better LA Initiative. 
Affordable housing: You have may have also heard the repeated claims by the Neighborhood Integrity Initiative’s opponents that it would block the construction of affordable housing. Nice try, but it takes far more than repetition of a talking point to actually make it true. 
This is why I still stand by my previous Citywatch articles: the critics have not yet presented evidence that LA's zoning laws and General Plan designations impede the construction of affordable housing projects. While Neighborhood Integrity Initiative supporters are already looking under every rock for any relevant data, we also invite those who make the “affordable housing argument” to back it up. 
More specifically, I have repeatedly reached out for evidence, in particular the addresses and case numbers of affordable housing projects that required City Council legislative actions to pull building permits. Until advocates, experts, or CityWatch readers can furnish data such supporting these affordable housing claims, I will assume that the critics are only blowing smoke. 
Filtering: A related affordable housing argument is called filtering. It is based on the parallel claim that new, expensive housing filters down to eventually become old and affordable, given enough housing construction and time. Ergo, we should open the floodgates for luxury housing construction in order to meet the housing needs of everyone else. 
The State of California, through a recent report from the Legislative Analyst’s office, has argued that filtering takes a generation to actually work. Under perfect conditions this could be true, but I would go much further than the Legislative Analyst to rebut the filtering argument for Los Angeles. (Note photo above showing old housing in Angelino Heights --not yet affordable after a century.) 
In LA, the price of older housing is going up, not down, and since 1980 the cost of LA’s housing has more than doubled in constant dollars. Even if we accept the caveat that filtering only works when there is substantial construction of new housing, it is still a phantom in LA. Porter Ranch is one of the few LA neighborhoods with substantial construction of new housing over the past 25 years, but where is the evidence that nearby communities with older housing, such as Chatsworth, Northridge, or Granada Hills, have, therefore, had a decline in housing prices or rents? For that matter, what about the vast stretches of post-war homes and apartments in the Valley that are now more than 50 years old? Has any of it filtered down to become affordable housing? 
According to Appfolio, exactly the opposite has happened despite large amounts of aging housing. Apartment rents in the south Valley went up 9 percent in 2015. 
To date I have only heard second-hand anecdotes about apartment buildings whose landlords let buildings deteriorate, especially those near USC. In these cases, however, landlords deliberately ran their apartments into the ground so existing tenants would voluntarily leave. Once they did, however, the landlords made basic repairs and then leased the same units out to students, but at a much higher rents. The result is filtering upwards, not downward. 
But such anecdotes about such landlords are not hard data, and as we continue to look, we also patiently wait for the critics of the Neighborhood Integrity Initiative to finally document filtering in Los Angeles.  
Free market fables: So far, the claim about filtering, like the affordable housing argument, is just another free market fable thrown at the Neighborhood Integrity Initiative to see if it sticks. At one time this Pollyannaish belief in the cure-all properties of deregulated real estate markets was confined to the recesses of Ayn Rand and the editorial pages of the Wall Street Journal. But, these myths have now oozed into the deep crevices of the Democratic Party, including nearly all elected officials at City Hall and even some affordable housing advocates. 
Free market myths and fables, however, cannot substitute for hard evidence when it comes to setting public policy. 
If the Neighborhood Integrity Initiative’s opponents were truly concerned about affordable housing – instead of using it as a weak stalking horse for the needs of real estate speculators to build luxury mega-projects -- their time might be better spent advocating for alternative affordable housing programs, such as these: 
1) Inclusionary zoning. Many cities already have zoning requirements that force developers to include about 20 percent affordable housing units in all apartment and condo projects. LA only has a density bonus ordinance, and John Schwada has shown that it has produced few genuine affordable units. 
2) Housing preservation.  Each year LA loses thousands of affordable units to demolitions to clear sites for high-end projects, such as McMansions. This has to stop, but calls for the preservation of existing affordable and lower cost housing are sparse. 
3) Rent control changes.  At present landlords can automatically raise rents by 3 percent per year. This, too, must stop. Likewise, vacancy decontrol must go. This loophole allows landlords to raise rents to whatever level the market will bear when a tenant moves. 
4) More resources from the Federal government. Affordable housing requires the restoration of Federal housing programs, as well as State programs, such as community redevelopment agencies. While a collection basket for LA's Affordable Housing Trust Fund is always welcome, it cannot substitute for well-funded public housing programs. 
None of these approaches conflict with the Neighborhood Integrity Initiative, offering further evidence that it does not stand in the way of affordable housing.

(Dick Platkin is a former LA city planner who reports on local planning issues for City Watch LA. Please send any comments or corrections to rhplatkin@gmail.com.) Prepped for CityWatch by Linda Abrams.

Ball is Now in the Court of LA’s New Director of Planning


 

LOS ANGELES
PLATKIN ON PLANNING-Vince Bertoni, the new Director of Planning, has only been on the job a few weeks, but the ball is already in his court. No one predicted that the Mayor would have told his processor, Michael LoGrande, to clear off his desk, and the Mayor’s reasons have not yet been made public. 


Despite the appearance of murky power plays at City Hall, the new Director of Planning has no choice. He must quickly take of the reins of power at the Planning Department and he must then marshal available and new resources to remedy a planning process so dysfunctional that it has spawned two separate planning-related initiatives: the Neighborhood Integrity Initiative and the Build Better LA Initiative. 
At this point, Mr. Bertoni, therefore, has several choices … all daunting. 
As indicated in his interview in The Planning Report, the new Director of Planning will apply some spit and polish to the practices of Mr. LoGrande. In essence, this means a more sophisticated program of empowerment, the use of outreach techniques to give the public the subjective feeling of participating in land use decisions -- but without actually granting them or their organizations, such as Neighborhood Councils, any real decision making power. 
In Los Angeles, the empowerment tools that Mr. Bertoni can work with include public hearings, workshops, focus groups, Design Review Boards, formal and informal office meetings, Neighborhood Council Community Impact Statements, and solicitation of letters and public testimony. He could even revive now defunct Plan Advisory Committees. 
Presumably his immediate goal will be to draw enough people into the plan and project review processes to hammer out a compromise between real estate developers and local critics. As for his long-range goals, that will include efforts to fend off future lawsuits and more planning-related voter initiatives. Or in Vince Bertoni’s coded words, “My job is to bring people together, to find out where the common ground is, and to see where we can have thoughtful change.” 
Given the LA public’s enormous distrust of City Hall, including City Planning, I think it is doubtful that more citizen participation will turn the tide. After all, the likely passage of the Neighborhood Integrity Initiative would upend planning-as-usual in Los Angeles. For example, it would enact a two-year moratorium on City Council legislative actions (zoning changes, height district changes, and General Plan Amendments.) This means that most mega-projects would be on ice until 2019. 
When, as many people anticipate, LA voters approve the Neighborhood Integrity Initiative, the new Director of Planning will then face three tough choices: 
Choice #1 is to go with the flow at City Hall. This means stalling or stopping the Initiative through litigation. Developers would undoubtedly pay the legal bills, but they have enough influence at City Hall to make sure that City Planning dawdles in their implementation of the Initiative, stretching out time-lines and undertaking the least amount of work possible within the confines of the Initiative. This approach might hide behind such clich├ęs as “we are waiting for the Courts to decide.” But the meaning is obvious. LA would continue to be “planned” parcel by parcel, based on investors’ impulses, not by any long-term plan. 
Choice #2 is to adhere to the voter-approved Initiative(s). This means refusing to process all parcel level legislative actions headed for the City Council: zone changes, height district changes, and General Plan Amendments for a two- year period. It also means that City Planning must accelerate the arduous process of updating LA’s General Plan. This not only mean updates of the Land Use element (i.e., the Community Plans); but also the other required General Plan Elements: Housing, Circulation/Transportation, Conservation, Open Space, Public Safety, and Noise, as well as important optional elements, Air Quality and the General Plan Framework. Two years of dedicated work will give this enormous project a good head wind. 
Adhering to the Initiative also means that all future of land use ordinances and regulations must be consistent with the city’s updated General Plan. If Planning followed the intent of the Initiative, it would also place re:code LA, a multi-year, five year, $5 million program to amend all of LA’s zoning, on hold. Left to own devices re:code LA would produce an enormous series of land use ordinances -- transforming zoning in Los Angeles based on an old and indefensible General Plan. To be properly sequenced, any changes to the City’s zoning should follow, not precede, the updated General Plan mandated by the Neighborhood Integrity Ordinance. 
Choice #3 is for Vince Bertoni to take the lead on planning issues, and not wait for the public to adopt an Initiative that points a metaphorical gun at City Planning’s head. In addition, to begin updating the General Plan’s Elements before November 2016, City Planning could use the Initiative’s two year timeout period to finally focus on several other long overdue planning projects. Of course, the actual to-do list is much longer, but these three projects stand out because their continued neglect undermines any credible planning process, old or new, for Los Angeles. 
Monitoring: Any plan is only as good as its monitoring program, and the General Plan Framework Element carefully prescribed what the monitoring unit should monitor and how these data should be applied through an annual General Plan evaluation report. That monitoring unit and it annual report took a breather beginning in 1999, and it is now time to wake up LA’s own Rip Van Winkle. This time, however, the annual monitoring report needs to review the demographic data underlying the updated General Plan, as well as the success or failures of the rolled-out programs that implement the General Plan. 
Enforcement: City Planning layers on pages of zoning and environmental conditions in its land use decisions, but its new Enforcement Unit only enforces Conditional Use Permit conditions imposed on stores selling alcohol. While this is important, it is only a tiny part of the approval conditions attached to land use decisions, and they all should be methodically and pro-actively monitored. 
Transit Oriented Development vs. Transit Adjacent Development vs. Transit Oriented Communities: The City of LA has a haphazard approach to the detailed neighborhood planning that makes transit a success. This would require City Planning to surpass its minimalist concept of permitting Transit Oriented Development (i.e. building expensive apartment houses with ample automobile parking near transit stations), or more accurately, Transit Adjacent Development. It would require planning to work closely with METRO in the design of Transit Oriented Communities. This was the approach of City Planning and METRO/SCRTD when the original MetroRail was designed in the early 1980s. Some of that work is begging to be reused in a concerted effort to design Transit Oriented Communities. If done correctly, it would make sure that all of the components for good, local, transit-oriented planning were in place and then implemented. 
The pro and con campaigns for the Neighborhood Integrity Initiative and possibly the Build Better LA initiative will shine much light on the City of LA’s hobbled planning process over the next 10 months. If either or both of the initiatives passes, the light might be glowing white-hot long afterward and it will continue that way until the Initiative(s) are faithfully implemented. 
Let us, therefore, make sure that City Planning takes the proactive approach.
(Dick Platkin is a former LA city planner who reports on local planning issues for City Watch LA. Please send any comments or corrections to rhplatkin@gmail.com.) Prepped for CityWatch by Linda Abrams.