Updated analysis of Senator Scott Wiener's SB 827 Real Estate Deregulation Bill

The “Build More Market Housing” Quack Miracle Cure for Los Angeles

By Dick Platkin*  (Updated from CityWatchLA, Jan. 11, 2018, original)

http://www.citywatchla.com/index.php/los-angeles-for-rss/14670-the-build-more-market-housing-quack-miracle-cure-for-los-angeles

Platkin on Planning:  Los Angeles is heading toward a perfect storm of gentrification, well camouflaged behind spurious claims of boosting transit ridership and addressing LA’s housing crisis through planning, zoning, and environmental  deregulation.

This perfect storm is propelled by huge tail winds from the State Legislature in Sacramento, with big city Democrats fronting for the real estate interests that fund and mentor them.  San Francisco State Senator Scott Wiener and Los Angeles Mayor Eric Garcetti are their current favorites, but many more are lining up at the trough.

To begin, there is a treasure trove of successful programs that they could turn to if they truly wanted to increase transit ridership and address the climate and housing crises, but they are totally mute on these options.  As for their cheerleaders, their silence is also deafening since the following public programs are at odds with their mantra to magically solve LA’s many urban ills: “build more market housing.”

Increasing transit ridership through the following is not on their to-do list:

·      Reduce fares, the UK’s program to allow those over 60 to ride subways and busses for free, is a perfect model for LA.  For that matter, the pols could look closer to home.  Between 1982-85 METRO used Proposition A funds to reduce bus fares to $ .50.  As a result, ridership quickly rose.  But neither elected official nor their kindred spirits ever call for fare reductions.  Apparently, they cannot be used to promote real estate speculation.

·      Real-time Transit Apps.  In cities like New York and London, some riders use real-time mass transit apps, but it is seldom necessary because they know the next bus or subway car will arrive within minutes.  Unlike LA, long headways and unreliable bus schedules are not an issue in those cities.

·      Make stations appealing.  In transit-oriented cities like New York and Tokyo, subway stops have stores and amenities, unlike LA, where passengers cannot even find a candy bar, bathroom, or newspaper vending machine.

·      Make bus stops comfortable.  In LA, most bus stops only offer a sign or a “bum-proofed” bench.  But, if every stop had a bus shelter, the bus riding experience would be vastly improved, especially during rains and heat waves.

·      Transform the neighborhoods around transit stations into Transit Oriented Districts/Communities.  These include comprehensive planning and municipally funded public improvements for mini-parks and playgrounds, enhanced street and pedestrian lights, bicycle lanes and parking, boulevard trees, sidewalk repairs, zebra-striped cross walks, intersection punch-outs, and ADA curb cuts.

·      At subway stations METRO and LADOT could add facilities for buses, cars, vans, taxis and ubers, pedestrians, and bicyclists.

·      Los Angeles could carefully monitor the transportation-related behavior of residents and the demographics of transit passengers to determine which programs work and which do not.

Programs to address LA’s housing crisis:

The programs for fixing LA’s housing crisis are also well known, but are predictably ignored by the build-more-market-housing growth machine of real estate investors, building industry lobbyists, neo-liberal academics, Democratic Party politicians, chambers-of-commerce, contractors, construction unions appended to the contractors, and groupies.   Their goal is to sweep away planning, zoning, and environmental laws that developers don’t like, not spend public money on unprofitable affordable housing projects.  Therefore, they never call for the following:

·      Restore discontinued Federal housing programs, such as public housing projects, as well as 236 and 221d(3) subsidized apartments. 

·      Vastly increase the funding for Section 8 housing.  In Los Angeles, over 600,000 people want Section 8 housing, but only 400 people per year mange to get vouchers and move into affordable units. 

·      Restore the Community Redevelopment Agency’s affordable housing programs.

·      Transform LA’s Rent Stabilization Ordinance into a Rent Control ordinance.  This requires ending vacancy decontrol; applying rent control to all housing, not just rental apartments built before 1978; and restricting rent increases to the real cost of living.

·      Restore and establish public social service and VA programs that treat homeless people afflicted by drug addiction and mental illness.

·      Increase wages in order to reduce economic inequality, a leading factor responsible for homelessness, overcrowding, and rent gouging.

·      Carefully monitor changing housing conditions, as mandated by the General Plan Framework, to determine which affordable housing programs are effective and which are not.

But, instead of these obvious programs, Sacramento and LA’s City Hall have only provided us with real estate-related schemes.  They may have different names, but they are united by a single purpose.  Their goal is to sweep aside zoning, planning, and environmental laws disliked by real estate developers, so they can build what they want, where they want, regardless of the consequences.  These ordinances include the following, with more on the way from the build-more-market-housing crowd’s current Wunderkind, Scott Wiener.

Pay-to-Play is still a reliable way for developers to build what they want because City Hall approves 90 percent of their applications for zoning waivers and General Plan amendments.

Community Plan Updates are appended with lengthy land use ordinances that up-zone and up-plan hundreds to thousands of parcels at one time.

Density Bonuses are the local application of Senate Bill (SB) 1818, which allows, with no effective right of appeal, the waiver of many zoning provisions if developers promise to include a small percentage of uninspected low income units in their buildings.  This ordinance is now being supplemented by a recently adopted Value Capture Ordinance that would require affordable units in exchange for zoning waivers (that will rarely be required under SB 827).  Since neither ordinance contains any on-site inspection requirements, there is no way for the public or the City to verify that any of the new units are affordable and that their tenants are officially registered low income Angelinos. 

Transit Priority Areas (TPAs) implement Senate Bill 743 in Los Angeles.  This State law and its local implementation ordinance apply to nearly all of Los Angeles west, south, east of the downtown because it includes all local parcels located within a half-mile from an existing or proposed rail or bus stop.  In those areas residential, mixed-use, and employment centers are exempted from two California Environmental Quality Act impact categories: parking and esthetics.

  

Transit Oriented Communities, the implementation of Los Angeles Measure JJJ allows increases of up to 80 percent in the number of permitted units in exchange for the inclusion of affordable housing units.  Like similar programs, it, too, does not require any on-site inspections to confirm the presence of dedicated affordable units or qualified low-income tenants.  Like Transit Priority Areas and the proposed Senate Bill 827, described below, this Los Angeles ordinance also applies to neighborhoods that are up to a half-mile from a subway, light-rail station, or frequent bus service.

Transit Neighborhood Plans reduce zoning requirements at light and heavy rail stations, such as the Expo Line.  While they are supplemented by streetscape plans, these off-site, right-of-way improvements are only unfunded guidelines.  They are not backed up by any public funds covering the design, construction, operations, or maintenance of any streetscape features, such as bike lanes, boulevard trees, street lighting, or pedestrian crossing points.

Re:code LA will eventually expand the list of permitted uses on most private parcels by eliminating the need for a Zone Change or Zone Variance to build non-permitted uses.  Furthermore, even though re:code LA is billed as a zoning simplification program, it has already replaced the existing R-1 zone, which applies to about three-quarters of all single-family homes in Los Angeles, with 16 alternate R-1 zones. 

The Fatal Flaws of Scott Wiener’s Perfect Storm:  The perfect storm headed toward Los Angeles is based on proposed legislation sponsored by State Senator Scott Wiener.  His draft SB 827 bill --  subsequently amended – grants cost free and highly lucrative General Plan Amendments and Zone Changes to private parcels up to a half-mile from a subway station and a quarter-mile from bus lines with 15 minute or less service.  Any parcel in these “ transit rich areas” used for residential development will then qualify for the elimination of zoning provisions for design, building mass (Floor Area Ratio), building height up to 85 feet, number of stories, number of units (density), yards, and parking. 

 

More specifically, in practice Wiener’s bill allows all residential projects to evade most zoning requirements in perpetuity.  This legislation will become a cornucopia for those who own private parcels zoned that permit residential projects, including all commercial and three manufacturing zones.  The value of these properties will soar because SB 827 would allow a much larger building envelope and expanded list of uses.  Property owners could then sell their parcels at an enormous financial gain, dodging new property taxes because of Proposition 13.  As for new housing construction, most flippers could care less since their goal is to cash in, not construct market housing.  What a deal!

 

While we can speculate about SB 827’s ultimate provisions, we already know its fatal flaws, including new, but weak, amendments to protect affordable housing and honor hypothetical prohibitions on demolitions:

Flaw #1 – No Consideration of Public Infrastructure and Services:  Senator Wiener and his fans have not given the slightest thought to the additional public infrastructure and public services that new transit-adjacent buildings and residents require.  When the size of buildings and number of residents increase in areas near subway stations and bus stops, these neighborhoods will need more garbage pick-ups, street sweeping, schools, parks, recreation centers, senior centers, libraries, emergency services, and so forth. Their water mains, gas and sewage lines, and storm drains also need upgrading, as well as infrastructure for electricity and telecommunications.  But since no mandates or funding for planning, construction, and maintenance are allocated through SB 827 for these many categories, we can expect a dramatic decline in the quality of life if/when the bill becomes a catalyst for new market-driven mega-mansions and apartment buildings.

Flaw #2 – No On-Site Inspections:  SB 827 does not include any mandates or funding for local on-site inspection programs.  City Hall and Angelinos will have no requirement or method to verify that any pledged affordable units exist and house legitimate low-income tenants. 

Flaw #3 – No Monitoring of Transportation Behavior:  We will also have no way to know, if as claimed by Senator Wiener, his financial backers, and his disciples, that people who move into new, transit-adjacent market and luxury housing routinely abandon their cars to walk up to a half mile to catch a train or bus.  Furthermore, if this behavioral information is eventually collected, based on recent studies, we can assume that most well-off tenants will continue to drive their fancy cars for most trips.  If so, SB 827 contains no repercussions when new tenants never or seldom use transit or when affordable units are rented out at market rates.

Flaw #4 – Guts Existing Specific Plans:  SB 827 would gut many transit corridor Specific Plans in Los Angeles, such as those on Ventura/Cahuenga Boulevard, Crenshaw Boulevard, and Colorado Boulevard, as well as the Vermont/Western Transit Oriented District Specific Plan.  Years of planning that went into these transit corridor plans, that involved local communities and that integrate transportation and land use planning, would be summarily dumped.  Since Wiener’s legislation automatically purges Specific Plan provisions for design, density, yards, number of stories, height up to 85 feet, FAR, and parking, it moves LA in exactly the wrong direction.  These transit corridor Specific Plans should be the model for future planning in Los Angeles, not discarded by a real estate industry bill adopted in and imposed by Sacramento.

Flaw #5 – Politicizes Transit Planning:  Because SB 827 treats transit corridors as accessories to real estate speculation, it will heavily politicize transit planning.  Developers will heavily lobby transit agencies to ensure that the corridors they want to gentrify will be upgraded to rail or frequent bus service.  At the same time, communities interested in stopping mansionization and/or protecting low-rise apartment buildings already housing frequent transit users would be forced to bizarrely lobby for downgraded transit service.  After all, if their local bus service falls below 15-minute headways, then SB 827 would not apply, as well as Transit Priority Areas and Transit Oriented Communities.

Flaw #6 – Ignores Proven Programs:  SB 827 totally ignores the many proven public programs - described above - that would boost transit ridership and increase the supply of affordable housing.  While SB 827 is likely to increase the supply of expensive market housing, it does not increase the supply of affordable housing in California.  This is because its underlying economic theories, filtering plus supply and demand, are bogus.  Increasing the supply of expensive housing would only result in more inexpensive, affordable housing if investors allowed their pricey projects to go deep into the red and become affordable.  But, they don’t, and they won’t invest to lose money.

Flaw #7 - Displacement:  There’s a reason why 37 affordable housing, tenants’ rights, and transit equity groups signed ACT-LA’s letter opposing SB 827.  They’ve seen what the current approach to development has already done to low-income communities: rampant gentrification and displacement.  For them, Wiener’s bill allows developers to ramp up these practices, driving even more families out of their homes and pushing them further away from transit services they already use. 

Flaw #8 - Public Participation Nixed:  Even with Senator Wiener’s amendments, SB 827 still bestows across-the-board, totally free and unscrutinized General Plan Amendments, Zone Changes, and/or Zone Variances on all properties in its coverage areas.  Due process is eliminated, without any notifications, workshops, public hearings, debates, votes by the City Planning Commission and City Council, and rights of appeal.  This bill is shockingly anti-democratic, and it shuts out elected officials and community members from the decision-making process.

Flaw #9 – Environmental Protection:  By circumventing General Plan Amendments, Zone Changes, and Zone Variances, SB 827 also eliminates the application of the California Environmental Quality Act (CEQA) to these planning and zoning discretionary legislative and quasi-judicial actions.  Nevertheless, when developers dump more luxury projects on to our cities, traffic congestion gets worse.  In pursuit of maximum square footage, they convert more green space to hardscape.  As they level infill sites, we see our urban forest receding.  Real estate investors are dying to see CEQA go away, and Scott Wiener is making their wish come true.

Flaw #10 – Out-of-scale residential development, including mega-mansions:  Many of the neighborhoods that are a half-mile from rail and a quarter-mile from bus lines with frequent service (15 minutes headways) are zoned for single-family homes, duplexes, four-plexes, and small apartment buildings.  Since SB 827 eliminates restrictions on design, density, height up to 85 feet, number of stories, and yards in these residential areas, it would eliminate existing zoning, including such zoning overlay ordinances as Historical Preservation Overlay Districts, Residential Floor Area Districts, Specific Plans, and Community Design Overlay Districts.  The result will be four and five story mega-mansions and apartment houses up to 85 feet tall towering over much smaller existing homes.

Flaw #11 – Weak protections from dislocation:  Recently added SB 827 amendments are weak and do not cover most properties in the SB 827 coverage area.  Amendments to protect existing rent stabilized units are unfunded and do not apply to single-family homes (mostly R-1), duplexes (R-2), all apartments built after 1978, most older apartments in which tenants have moved out over the past 40 years, all commercially zoned parcels, and all manufacturing zoned parcels that permit R-3 or R-4 apartments.

Flaw #12 – Weak protections against demolitions:  New provisions that honor existing prohibitions on demolitions would not apply to Los Angeles because the City has no such demolition prohibitions.  Furthermore, requirements to post demolition permits, remediate lead paint, and remediate asbestos prior to demolitions are not enforced by the Los Angeles Department of Building and Safety.  While on the books, developers are totally free to ignore these requirements, without the slightest fear of citations, orders to stop work, prosecutions, or revocations of building permits and certificates of occupancy.

Flaw #13 – Devastates the planning process.  In California, all cities and counties are legally required to prepare, adopt, monitor, and periodically update a General Plan.  The primary implementation tool of these General Plans is zoning, and SB 827 eliminates this implementation process in vast swaths of urbanized California.  Without the ability to implement their General Plans, cities and counties will be unable to plan and properly comply with State imposed planning laws.

Flaw #14 – Ignores the real causes of homelessness.  Homelessness, over-crowding, and rent-gouging are caused by the elimination of Federal and CRA programs to build and operate affordable housing, cutbacks in social service programs, anemic rent control laws, weak controls on evictions (e.g., cash and key), ineffective VA programs to treat PTSD, lack of local enforcement, and soaring economic inequality and growth of poverty.  SB 827 is totally oblique to these and closely related factors.  Its supply-side approach, to ramp up the construction of market housing through deregulation, leaves the major causes of homelessness, over-crowding, and rent gouging in place.

My conclusion about SB 827, by itself, and in combination with the supplemental land use ordinances I reviewed above, is that it is one of the most destructive pieces of planning legislation I have encountered in over three decades of professional work in the city planning profession.  Like all miracle cures, it won’t work.  It might make some landowners and landlords rich, but it fatal flaws will destroy many neighborhoods, without increasing transit ridership or reducing the cost of housing or amounts of over-crowding and homelessness.

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·       Dick Platkin is a former Los Angeles city planner who reports on local city planning controversies for CityWatchLA.  Please send corrections and comments to rhplatkin@gmail.com.