From the Field: Affordable Housing Development Incentives Will Be Decided by Los Angeles Voters

The Los Angeles City Council voted to place an affordable housing ballot initiative before voters in November. Voters will decide whether proposed developments will receive allowances for exceeding height, density, and other zoning restrictions if the developers commit to producing a certain percentage of their housing units as affordable and to meeting certain workforce standards. This key ballot initiative, known as the Build Better LA Initiative, is advanced by a coalition of more than 50 labor and housing organizations, including the Southern California Association of Non-Profit Housing (SCANPH), an NLIHC state partner.

To gain access to the ballot, Build Better LA collected 94,238 petition signatures between February and June, considerably more than the 61,487 needed to qualify. After signatures were verified by the Los Angeles city clerk, the City Council had three weeks to decide between passing the measure outright or placing it on the ballot in November, 2016 or March, 2017. The City Council elected to place the initiative on the November 8 ballot at their meeting on June 21. 

Affordable housing advocates are excited about the potential for this proposal to generate new affordable homes. The proposed legislation will require that for any development larger than 10 units, 5% of new apartments must be affordable at the extremely low income threshold, meaning rents set at 30% of gross income for households earning 30% of area median income. An additional 6% must be priced as affordable at the very low income rent threshold (50% of area median income) or 15% at the low income rent threshold (80% of area median income). There are also alternatives for developers who do not wish to build the required affordable housing in the same property as market rate housing, as is common of local inclusionary zoning ordinances. If a developer chooses to build the affordable units off-site, the number of affordable units required increases by 1.25% if they are built within two miles of the primary development, and increases by 1.5% if built between two and three miles away. Additionally, developers can pay a substantial in-lieu fee to the city’s Affordable Housing Trust Fund (AHTF) rather than developing the affordable housing themselves.

The proposed legislation also incentivizes local hiring practices for all developments that receive density bonuses and zoning exceptions. For any new developments built under this proposal, 30% of all construction hours must be provided by workers who live in the city of Los Angeles. Ten percent of such construction workers’ hours must be performed by “Transitional Workers” who live within 5 miles of the proposed development. A Transitional Worker is defined as one who lives in a designated Economically Disadvantaged Area and faces multiple barriers to employment which include, among others, being homeless or a single parent. All proposed developments must also commit to paying a prevailing wage. The employment requirements of the proposal have been a successful means for bringing labor and housing advocates together to provide momentum for passing the initiative.

Build Better LA goes to the ballot before a similar direct-legislation initiative that aims for the opposite result. The Neighborhood Integrity Initiative seeks to prevent the City Council from having any authority to approve exceptions or changes to local zoning codes and would place a two-year moratorium on most forms of large construction. The proposed moratorium does, however, exclude 100% affordable housing developments.  The anti-development Neighborhood Integrity Initiative has intentionally delayed their petition gathering so that they can have their proposal on the March 2017 ballot, seeking a smaller voter turnout to boost the likelihood of passage. The dueling ballot initiatives have compelled Mayor Eric Garcetti (D) to commit to an overhaul of the city’s zoning codes, which have not been updated for several decades.

“The November election can be a turning point for affordable housing development in Los Angeles,” said Alan Greenlee, Executive Director at SCANPH. “The Build Better LA Initiative creates a path that ensures development of homes at all income ranges throughout the city by providing certainty for developers who want to develop vibrant and diverse communities.”

For more information about the Build Better LA Initiative, contact Alan Greenlee at: agreenlee@scanph.org

SCANPH’s fact sheet on the Build Better LA Initiative proposal is at: http://bit.ly/28YftgJ