Tall vs. Sprawl — Build Better L.A. Proposition Will Determine Our City’s Future WITH PLATKIN CORRECTIONS IN CAPS

LA Weekly, TUESDAY, SEPTEMBER 27, 2016 AT 6:30 A.M.

BY HILLEL ARON

It was just the sort of attack that the fortress like walls of the Medici were designed to repel: a phalanx of 50 or so union members and affordable-housing advocates, wielding handmade signs (most in the same handwriting) with slogans such as "Good Jobs and Affordable Housing Now" and "NO more luxury development, NO displacement, NO homelessness. YES on Prop. JJJ."

A few bewildered residents of the apartment complex looked down from their balconies, as a clipped call came from a megaphone: "Palmer, Palmer, you can't hide. We can see your greedy side!" The crowd chanted the words back.

The Medici is one of those half-dozen or so faux-Italian apartment buildings built and owned by Geoff Palmer, perhaps L.A.'s most notorious developer, known for — aside from his predilection for gaudy architecture — his opposition to affordable housing. He also happens to be one of Donald Trump's biggest donors, thus the chant by protesters: "We want Prop. JJJ, not Trump's L.A.!"

Proposition JJJ also is known as Build Better L.A., though neither name will be all that familiar to Angelenos. The ballot measure has been rather lost in a riotous campaign season dominated by Donald Trump. The initiative will appear near the bottom of an impossibly lengthy ballot, which will include not only presidential, senate and congressional races but also no fewer than 17 statewide initiatives, including marijuana legalization, and a few local measures, among them two tax proposals to pay for mass transit construction and for supportive housing for the homeless.

Buried though it is, Proposition JJJ lies at the center of L.A.'s most critical and existential debate: What kind of city should it be? Should it be tall and dense, with more mass transit and bike lanes and pedestrian-friendly streets, or more like it was 30 years ago — wide, sprawling, dominated by single-family homes and freeways and cars?  THIS IS A FALSE DICHOTOMY.  THE REAL DICHOTOMY IS THIS: SHOULD L.A. BE PLANNED, OR IT SHOULD IT GROW, WILLY-NILLY, BASED ON THE WHIMS OF PRIVATE SECTOR INVESTORS, REGARDLESS OF EXISTING PLAN, EXISTING, ZONING, EXISTING INFRASTRUCTURE AND SERVICES, AND NEIGHBORHOOD DESIGN?

Both sides — the density hawks, or urbanists, and the preservationists, or suburbanites — have become increasingly polarized, and can be seen fighting pitched battles from Venice Beach to Boyle Heights.  ANOTHER FALSE DICHOTOMY.  MANY URBANISTS WANT PLANNED DEVELOPMENT, NOT SOMETHING BASED ON THE IMPULSES OF RICH INVESTORS.  AND MOST PRESERVATIONISTS LIVE IN OLDER LOS ANGELES NEIGHBORHOODS, NOT SUBURBANITES.

Perhaps neither vision is truly possible — at least, not in our lifetimes. But the debate has been given a sharp immediacy by the city's near-crippling housing crisis, which has sent home prices and rents soaring.

The debate may not reach its apogee until March, when the Neighborhood Integrity Initiative will go before voters. That measure seeks to limit development by curtailing so-called "spot zoning," the practice of giving construction projects special exemptions from the city planning code. It's being backed by a group calling itself the Coalition to Preserve L.A. (funded, controversially, by the AIDS Healthcare Foundation). They, of course, are the preservationists, and they're opposed by the urbanists. THERE IS NO EVIDENCE THAT OPPOSITION TO SPOT-ZONING AND SPOT-LEGISLATIVE ACTIONS HAS ANYTHING TO DO WITH BE A PRESERVATIONIST.  THE PRESERVATIONISTS ARE CENTERED IN THE CONSERVANCY AND THEIR FOCUS IS HISTORICAL PRESERVATION.

Meanwhile, Build Better L.A. is somewhere in the middle. Like the Coalition to Preserve L.A., it seeks to paint developers — or at least some of them — as the enemy. Hence the protest against Geoff Palmer.

But instead of trying to halt development (ANOTHER WHOPPER. THE NEIGHBORHOOD INTEGRITY INITIATIVE ONLY SEEKS TO STOP UN-PLANNED DEVELOPMENT, THAT IS PROJECTS THAT ARE ILLEGAL UNTIL THE CITY COUNCIL MAKES THEM LEGAL THROUGH SPECIAL, PARCEL SPECIFIC ZONE CHANGES, HEIGHT DISTRICT CHANGES, AND/OR GENERAL PLAN AMENDMENTS), it seeks to gain concessions from developers. It proposes to let developers construct apartment buildings taller than the planning code currently allows for, on two conditions: One, that the projects devote a certain number of units to affordable housing; and two, that they pay their workers according to something called the "area wage standard."  THEY ALREADY DO THE FIRST THROUGH S.B. 1818.

It's being backed by an unusual coalition of labor unions and affordable-housing advocates. They're all for density — as long as they get something out of it.

"Build Better L.A. says, in a situation where the city is giving value to developers, we want something back," says Alan Greenlee, executive director of the Southern California Association of Nonprofit Housing, which represents the builders of affordable housing. "The private sector is not engaged in a material way in solving the affordable housing crisis. They're not building for poor people. Build Better L.A. brings the private sector to bear on the problem."

Developers, of course, see things differently. They don't see spot zoning as a gift bestowed on them by the city. They see it as a necessary, if imperfect, remedy to the city's obsolete planning code, which nearly everyone (including Mayor Eric Garcetti) thinks is in desperate need of an overhaul.  WHAT IS OBSOLETE ABOUT THE PLANNING CODE IS THAT THE AUTHOR IS CONFUSING IT WITH THE GENERAL PLAN.   IT IS THE PLAN’S INFLATED POPULATION NUMBERS THAT ARE THE PROBLEM, NOT L.A.’S EXISTING ZONING, WHICH WAS COMPLETELY REVIEWED IN THE LATE 1980S AND EARLY 1990S THROUGH THE A.B. 283 ZONING CONSISTENCY PROGRAM. WHEN THE A.B. 283 PROCESS FINISHED IN ABOUT 1991, IT CALCULATED THAT THE RESULTING ZONING CODE COULD ACCOMMODATE 5,000,000 ADDITIONAL PEOPLE.  THE FRAMEWORK WROTE THAT THIS IS ENOUGH BUILD OUT POTENTIAL TO SUSTAIN ALL GROWTH SCENARIOS THROUGH THE 21^ST CENTURY.

"We shouldn't be using inefficiencies in the system as a way of creating affordable housing," says Mott Smith, a developer. "We should just create affordable housing."  BUT, TO CREATE AFFORDABLE HOUSING IT IS NECESSARY TO REINSTATE FEDERAL PROGRAMS THAT WERE CUT TO PAY FOR THE VIETNAM AND SUBSEQUENT WARS.  TO USE LYNDON JOHNSON’S WORDS, IT IS NECESSARY TRADE-OFF BETWEEN GUNS AND BUTTER.

As for the backers of Build Better L.A., Smith says: "It's clear the people they're really serving are the people who build this stuff, not the people who live in this stuff."

Though most of Build Better L.A.'s campaign will focus on the creation of affordable housing, it's the unions that are paying for its campaign — which has a nearly $1 million war chest — and it's construction workers who likely have the most to gain from its passage.

"It's literally an initiative written by labor," says David Abel, publisher of urban planning trade publication The Planning Report. "It's a gift from the L.A. County Fed to their craft unions, who rarely get much from the Federation."

Rusty Hicks was an unlikely choice to be the head of the powerful union umbrella group known as the L.A. County Federation of Labor. His predecessor was Maria Elena Durazo, a short, charismatic organizer who came from the hotel workers union. She succeeded her late husband, Miguel Contreras, a wily kingmaker who turned Southern California's labor movement into a political dynamo.

Hicks is different. Born in Fort Worth, Texas, he's a political strategist. He has no natural connection to the labor movement; it's just where he ended up after running a few state assembly campaigns and running Assemblyman Ted Lieu's district office. He's been working for the County Fed since 2007, and he's run it since January 2015.

His first big fight was getting the city's minimum wage raised to $15 an hour, a task he achieved with startling efficiency. The victory was somewhat soured, however, after Hicks tried, at the last minute, to insert a clause into the bill absolving union labor from the new wage standard.

It was a strange provision, one that appeared to be "a weapon to pressure companies to unionize," in the words of the USA Today editorial board. After a sharp backlash, labor withdrew the opt-out provision, and the minimum-wage law passed (it will be phased in over the next four years).

For Hicks, the episode, which made national news (even Gawker took a jab at the County Fed, writing, "You are the shittiest labor leaders I ever heard of!"), still stings.

When asked about it by L.A. Weekly, he says, his languid cadence tightening a bit, "Well, the last time I commented on that particular moment in time, I think it was May the 26th of 2015. So you'd have to go back and look at my previous comments on that particular issue because I've got nothing else to say about it."

He says he doesn't remember what media outlet he said it to. But the date still sticks in his mind. In fact, he appears to have spoken with a group of journalists, including former L.A. Weekly reporter Gene Maddaus, on May 29, saying, "I take responsibility. ... I always assumed, incorrectly, that this standard legal language [would be included]. ... I assumed wrong."

Even before the minimum-wage law passed, Hicks says, he saw that the housing issue was becoming a crisis.

"We were hearing so many stories about how it didn't matter how high the wage went, that rents were moving faster than wages were ever going to move," he says. "And that addressing the housing conversation was the logical next step."

Los Angeles is often declared the nation's most unaffordable city in which to live. According to the rental website ApartmentList.com, the average cost to rent a two-bedroom apartment is the seventh highest in the country. Meanwhile, the city's wages remain well behind those in more expensive cities such as San Francisco and New York. And L.A. has the highest poverty rate — nearly 16 percent — of any big city in America.

That's why there are so many homeless people sleeping on the streets.

But the housing crunch has other knock-on effects. For instance, more people are sharing apartments, sometimes in cramped conditions.

"People are doubling up in buildings, which is bad for health," Greenlee says. "Or they're moving out to Riverside or San Bernardino. Have you seen the 10 West in the morning? It's a fucking nightmare."

Traffic also has helped to push the politics of housing to the forefront of voters' minds.

"It wasn't too many years ago that the most important issue to most voters was transportation," says Dan Schnur, director of the Jesse Unruh School of Politics at USC. "There seems to be a dawning realization that you can't fix the transportation problem until you fix the housing crisis."

Build Better L.A. Coalition organized a protest against prolific local developer Geoff Palmer at his new Medici apartments near downtown. Soqui

Developers have a simple solution to the housing crisis: Build more, and build taller. Flood the market with supply, and the prices will drop. Traffic will get worse, sure, but then more people will use public transit.  THERE IS NO EVIDENCE FOR THEIR CLAIM, THAT MORE LUXURY HOUSING CREATES AFFORDABLE HOUSING IN LOS ANGELES EITHER THROUGH TRICKLE DOWN, CALLED FILTERING, OR BY REDUCING THE PRICE ON NON-LUXURY HOUSING TO CREATE AFFORDABLE HOUSING.

The approach has some pitfalls. Newer housing tends to be more expensive than older housing. And at a neighborhood level, new housing can displace lower-income tenants.

A study from the UC Berkeley Institute of Governmental Studies found that while "both market-rate and subsidized housing development can reduce displacement pressures ... subsidized housing is twice as effective as market-rate development at the regional level." In other words, to prevent displacement, you need to build affordable housing.

During the New Deal, the federal government built public housing projects to house people who couldn't otherwise afford a home. For example, Jordan Downs, in Watts, was built by the government, first as veterans housing, and is now run by the Housing Authority of the City of Los Angeles. Nearly 22,000 Angelenos live in public housing, paying an average rent of $352 a month.

Nearly 90,000 Angelenos receive rent vouchers, also known as Section 8, a program where the tenants pay 30 percent of their income in rent and the federal government covers the rest. That program, created in 1974, serves more than 2 million Americans, although it has been drastically cut over the years. In most cities there is a long waiting list to enroll, and more and more landlords are refusing to accept Section 8 tenants, especially in Los Angeles, where the amount of money the housing department pays isn't enough to cover the cost of most rental units.

In Los Angeles, 4,464 people are on the Section 8 waiting list — a list that has been closed to new applicants since 2004.

In 2004, the California Legislature passed SB 1818, a law that grants density bonuses to developers, allowing them to build up to 35 percent more units per square foot of lot size than the planning code allows if they set aside a number of units as affordable. In the last three years, density bonuses have created nearly 1,000 affordable units in L.A.      YET, ACCORDING TO JOHN SCHWADA’S  RESEARCH, THERE IS LITTLE EVIDENCE THAT THESE 1000 RESIDENTS ARE OCCUPIED BY LOW INCOME PEOPLE.  IT IS REALLY JUST A WAY FOR INVESTORS IN RESIDENTIAL PROPERTY TO GET A BACKDOOR VARIANCE, AS WELL AS MORE RENTABLE UNITS.

Proposition JJJ would, in effect, act as a density bonus law on steroids. Projects built within a half-mile radius of a "major transit stop" (light rail and certain bus stops) could be built taller and denser than the zoning code allows for — in theory, as tall as the developer wants (though in practice the height would be limited by the planning commission) — as long as the project fulfills a number of requirements.

First, the building would have to reserve 15 percent of all of its units for lower-income residents — those earning 80 percent of the area's median income. Of that 15 percent, some units would be reserved for even lower-income residents. Developers also could choose to pay money into an affordable-housing trust fund, in lieu of building affordable units.  AN INTERESTING CHANGE. AFFORDABLE HOUSING IS 60 PERCENT OF THE MEDIAN INCOME, NOT 80 PERCENT.  MAYBE THIS IS WHY THEY USE THE TERM LOW INCOME.

The project also would have to meet certain work requirements. All workers would have to be paid what Hicks calls an "area wage standard" — something akin to a prevailing wage, which would be set by the city. There are a plethora of other work requirements — at least 30 percent of the workers would have to live in Los Angeles.

And, crucially, at least 60 percent of the workers would have to have completed a "joint labor management" apprenticeship program — which all construction union members have — or have enough hours of on-the-job experience required to have graduated the program.

In practice, most of the people who qualify for either of these two provisions would be union members.

It is, in short, a very long (more than 10,000 words) and complicated law.

"You gotta be a planning guru to understand it," says city budget watchdog Jack Humphreville, a self-described "uber gadfly" and "professional bellyacher." "And even then, you have problems."

When the City Council passes a bill, it can amend the law at anytime. But a ballot measure, passed directly by the voters, can only be amended by another ballot measure. Which is what makes them so dangerous. Build Better L.A. has a sunset provision for this very reason — the law will cease to exist 10 years after going into effect.   BUT THE CITY COUNCIL RESERVES AT LEAST ONE PRIVILEGE.  IT CAN REDUCE THE AFFORDABLE/LOW-INCOME HOUSING COMPONENT IF A DEVELOP COMPLAINS THAT 15 PERCENT REDUCES HIS OR HER PROFIT TOO MUCH. NO CRITERIA ARE GIVEN, SO THE COUNCIL WILL HAVE TOTAL FREEDOM TO ADJUST THE AFFORDABLE HOUSING REQUIREMENT WHEN AND WHERE IT WANTS.

But until then, any unforeseen consequence would be impossible to weed out without another ballot measure.

The dual nature of the law is designed to follow the dual nature of L.A.'s unaffordability problem — housing and wages. Which means the law has two constituencies — affordable-housing advocates and labor.

"It's certainly a broad coalition," says Harold Meyerson, executive editor of The American Prospect. "If it were just construction unions, it wouldn't stand a chance in hell of passing."  It also has two sets of critics.

First there are the preservationists. They support the Neighborhood Integrity Initiative and regard new development as the enemy, a tool for displacing low-income tenants.  THIS IS TOTAL NONSENSE.  THE NEIGHBORHOOD INTEGRITY INTIATIVE SUPPORTERS MAY OVERLAP WITH PRESERVATIONISTS, BUT THAT IS NOT THEIR FOCUS SINCE PLANNED DEVELOPMENT IS THEIR FOCUS.  THEY HAVE MADE IT CLEAR AGAIN AND AGAIN THAT NEARLY ALL PROJECTS SUBMITTED TO LADBS WILL GO THROUGH THE CITY’S APPROVAL PROCESS WITHOUT DIFFICULTIES.  THE ONLY ONES FACING PROBLEMS ARE THOSE PROJECTS THAT WANT THE ZONING AND/OR GENERAL PLAN DESIGNATION AND/HEIGHT DISTRICT CHANGES FOR AN INDIVIDUAL PARCEL.

Elizabeth Blaney is co–executive director for Union de Vecinos, a tenants-rights group based in Boyle Heights. She says Build Better L.A. will create very little affordable housing, and doesn't give priority to tenants whose buildings are torn down to make way for new construction.

"Those tenants who are there, they need to have the right to come back," she says. "Otherwise, they're just being displaced." And, she adds, "It still allows for the demolition of rent-control housing."

But most of Build Better L.A.'s opponents come from the other side of the ideological spectrum — developers, business groups and urbanists who favor a more freewheeling densification.

"The initiative states, as its goal, to create affordable housing," says Stuart Waldman, president of the Valley Industry and Commerce Association. "In reality, it's a handout for unionized labor. It will mean increased labor costs, which will mean higher housing costs. Which adds to the problem."

It's unclear just how many future projects Build Better L.A. would affect. Large scale projects — the ones with hundreds of units, which take enormous cranes to build — already use union labor. Smaller projects of between 20 and 100 units, however, would likely see their costs increase (buildings with fewer than 10 units would be exempted from Proposition JJJ).

To this point, Hicks says: "I would probably disagree with the viewpoint that paying a qualified workforce to construct a project necessarily results in the project being more expensive and less affordable."

But a study from the UC Berkeley Program on Housing and Policy, published in 2005, concluded that a prevailing-wage law (which is similar but not identical to Hicks' "area wage standard) would increase the costs of projects by 10 to 35 percent.

Even Greenlee says smaller projects would see their labor costs "significantly increase" if Proposition JJJ passes.

"I do think there's some reason for concern in that context," Greenlee admits.

Developers say that California's panoply of building regulations and environmental laws — particularly the California Environmental Quality Act, which allows anyone to file a lawsuit against a development — serve to slow down individual developments for years. That means investors don't get their money back for years. Which means they demand an even greater return. Which incentivizes larger, more profitable projects — i.e., luxury towers, the very thing that the protest at the Medici was aimed at.

"We've demonized developers and made it so difficult to build, so that the only people who can develop are the developers we hate the most," says Shane Phillips, an urban planner. "We scared away all the little guys. [Build Better L.A.] is one more step in that direction, and that bothers me." IF A PROJECT BUILDS ACCORDING TO THE CODE, IT EITHER IS TOTALLY EXEMPT FROM CEQA OR IT WILL QUALIFY FOR A MITIGATED NEGATIVE DECLARATION (MND).