SMa.rt chronicle: A tale of two cities

The city of Santa Monica is surrounded on three sides by the city of Los Angeles. Therefore, although the jurisdictions are different, the development processes, pressures and outcomes are very similar. This article by SMart guest columnist Dick Platkin explains what is happening in Los Angeles as these two cities struggle to implement the implausible and impossible affordable housing numbers required by the community development and housing mandates of the State of California to build over the next 8 years. years. Many of the things he describes here about Los Angeles apply directly to Santa Monica. This article first appeared in city ​​watch ( June 23, 2022. Dick Platkin is a former Los Angeles city planner who writes frequently on various city planning issues that often appear in City Watch:

Garbage In, Garbage Out
PLANNING WATCH – If you’re wondering why LA’s housing crisis is steadily getting worse, you need look no further than the old adage: “Garbage in; garbage cans.

If you start from a flawed theory to explain the housing crisis and devise its supposed remedies, no one should be surprised that the number of people living on the streets of Los Angeles continues to rise.

Therefore: The faulty theory is that zoning, planning and environmental laws are responsible for the lack of affordable housing. If cities and states revoke these laws, they could restrict zoning, planning and environmental reviews of private building projects. There would then be more housing and prices would fall. Voila, the housing crisis would become history.

Unfortunately, this theory is totally disconnected from reality. With or without deregulation of zoning, planning and environmental laws, real estate developers build high-end housing because it remains very profitable. Deregulation does not increase wages or reduce rents, mortgages, property taxes and the cost of utilities. So it doesn’t solve the homelessness crisis, and the housing data for Los Angeles shows that very clearly.

According to Redfin, in the three years between May 2019 and May 2022, the average price of a home in Los Angeles rose from $700,000 to $1,000,500. This same period not only saw the selective enforcement of zoning laws, but also the automatic approval of density bonus applications and the 90% approval of zoning waivers.

Same story for rents, despite a jump in vacancy due to the Covid 19 pandemic. According to Zumper, between March 2021 and June 2022, the average rent for a one-bedroom apartment in Los Angeles went from $1,900 to $2,371. The rent for an average two-bedroom apartment rose from $2,650 to $3,200 over the same period.

What explains these significant increases in the cost of housing even as the population of Los Angeles is in decline and the construction and supply of housing is booming? The answer is that new apartments are expensive, and they also make existing housing unaffordable for low-income Angelinos, including those in full-time jobs. So much for the fable of supply and demand reducing housing costs! In Los Angeles, the huge housing demand for low-income people goes unmet while expensive homes are permanently vacant, some intentionally.

Q) What prevents homeless people from moving into vacant apartments? A) They can’t pay the rent.

Over a slightly longer period, from 2015 to 2022, the Los Angeles Department of Planning reports that City Hall approved 184,826 new residential units, 14% of which were affordable. At the same time, the population of Los Angeles grew from about 3.9 million to 3,724,000 people. The addition of tens of thousands of high-end housing units during a period of population decline and a building boom has failed to reduce prices.

Nonetheless, these counterproductive housing policies are fully entrenched in the New Los Angeles Housing Element, the proposed Sacramento Housing Legislation, and the articles and editorials of the LA Times. Their common denominator is supply-side economic practices, better known as Reaganomics. But Reaganomics didn’t work in the 1980s, and it doesn’t work now, despite being fully embraced by nearly every Democratic and Republican leader. It remains, however, a great cover story for real estate investors and their appendages to line their pockets through get-rich-quick zoning schemes.

Like those of the Reagan era (1981-89), these true believers remain blind to the evidence. The housing crisis is not the result of insufficient housing construction, but of a lack of money in the pockets of people who need housing but cannot afford it because “the rent is too expensive”.

This counterproductive formula, however, is repeated over and over again, especially in California, where failed housing policies quickly turn into anti-camping orders and police raids on homeless encampments, as well as other deregulation and privatization initiatives:

By relying on private developers to build unprofitable low-cost housing, costs have increased to the point where some affordable housing projects now cost $1,000,000 per unit. According to the Los Angeles Times, there are “many factors within the control of state and local government that are to blame for the high cost of building affordable housing in California.” By many factors, the LA Times singles out union wages, environmental laws, and hired consultants who get financial subsidies for private developers. Trapped in a neoliberal consensus that ensures an ever-worsening housing crisis, the Times never considered restoring funding to the old HUD and ARC public housing programs. Without the need to make a profit and hire consultants, they could easily cut costs compared to private developers.

In Sacramento, the 2011 Assembly bill is also based on similar deregulation provisions to expedite construction of new housing in empty retail and office sites, strip malls and parking lots. These residential projects would be exempt from California’s environmental quality law, lawsuits, and zoning waivers passed by the city council. Despite the hype, it is doubtful that this legislation will work. First, it does nothing to increase the income of potential tenants so that they can afford new apartments built in former commercial areas. Second, in Los Angeles, developers can already build apartments on commercial lots. LA’s endless low-rise commercial avenues could become bustling residential transit corridors. Additionally, these new apartments could avoid most zoning regulations because they qualify for transit-oriented communities (TOC) density bonuses. Yet, in Los Angeles, developers are leaving these dev sites available untouched, leading to an obvious question: why would they behave any differently in other cities?

The answer is that they would behave no differently. Private developers focus on maximizing their profits, not on producing unprofitable cheap housing. To argue otherwise might justify planning policies that financially benefit property investors, but deregulation cannot turn them into their opposite, local housing authorities designed to build and operate non-market public housing.

By Dick Platkin

SMart Santa Monica Architects for a Responsible Future
Thane Roberts, architect, Robert H. Taylor AIA, Ron Goldman FAIA, architect, Dan Jansenson, architect and building, fire and life safety commission, Samuel Tolkin, architect and urban planning commissioner, Mario Fonda-Bonardi AIA and urban planning commissioner, Marc Verville MBA, CPA (inactive), Michael Jolly, AIR-CRE.
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