Toward the very end of 2005, the Los Angeles City Council unanimously approved a temporary measure that required apartment and condominium developers in Warner Center to devote a portion of their projects to those unable to afford market-rate homes. The move was widely seen as a harbinger of things to come. Developers braced for a citywide inclusionary housing ordinance a law that would mandate that developers provide a portion of any new housing stock, rentals and homes, at below-market rents in order to solve an increasingly troubling housing affordability crisis in the city. Barely more than a year later, at least one developer is challenging the Warner Center ordinance, and throughout the rest of the San Fernando Valley and the city, the idea of inclusionary housing has been all but forgotten. “We really haven’t done much since the threat of the ordinance has been mitigated, although there’s nothing to say it wouldn’t rise again,” said Lawrence A. Scott, senior vice president, development at AvalonBay Communities Inc., who was actively participating in the inclusionary housing ordinance discussions several years ago. “What happened was a lack of support from the full council to push it forward.” Resistance from developers, concerns from community groups and a growing sense that such mandates will not solve the housing problem have virtually erased the idea from the public agenda. Even those who once championed the notion of inclusionary housing have backed away. A spokesman for Los Angeles City Councilman and chair of the city’s planning and land use management committee Ed P. Reyes said he wasn’t available for an interview for this story. In a written statement, Reyes, who was perhaps the strongest backer of inclusionary housing among city officials, said, “Los Angeles isn’t a city where you can apply a one size fits all model for our housing needs. “The challenge has been to come up with a policy that addresses a city of diverse housing markets and income levels, while respecting individual neighborhoods. Our challenge remains to achieve that level of consensus.” If the political will to intervene in the city’s housing problems has evaporated, the problems themselves have not. If anything, they have worsened. Just-released projections for housing needs by the Southern California Association of Governments show that the city of Los Angeles will need some 113,698 new housing units by 2014, up from a projected 60,000 needed for the prior seven year period for which SCAG collected data. That doesn’t factor in surrounding areas like Santa Clarita, Burbank or Simi Valley, which add more than 75,000 units to those totals. Of those 113,698 units needed in the city of Los Angeles, SCAG figures that 27,436 will need to serve very low income households; 17,620 will be needed for low-income households; 19,443 units will be needed for moderate income earners; and another 49,199 units will be needed for those at above moderate incomes. Forget that nowhere near 60,000 new units were built between 1998 and 2005 to meet what SCAG predicted at the time would be the housing shortfall as of 2005. Between 2004 and 2005 the number of housing permits issued in Los Angeles County actually decreased by 5 percent or 1,300 units, SCAG’s most recent housing report found. At the same time, median home prices have risen dramatically while household income remained relatively stagnant. By 2005, home affordability had declined seven percentage points to 14 percent in L.A. County. And the average rent in the San Fernando Valley rose 8 percent to $1,500 per month. “With rent increases significantly exceeding household income growth, rental cost burden has continued to rise,” the SCAG report authors wrote. Meanwhile, the continued rise in land costs, coupled with a persistent increase in the cost of building materials has made it virtually impossible for developers of single family homes, condos or rental apartments to produce new units in anything but the highest price categories. The problem has not been lost on most of the cities surrounding Los Angeles. The cities of Thousand Oaks and Agoura Hills have both begun work to study ways in which they might provide affordable housing. “The lack of affordable housing is a problem throughout California,” said Mike Kamino, director of planning and community development for Agoura Hills. “To sustain the economy, there’s got to be places where people can live.” Until very recently, the Southern California region has spread outward, and employers and city governments were content to have workers commute over long distances to places of employment. But that sprawl has created traffic problems so severe many argue they are disrupting the economy and, at the very least, being dumped in the laps of politicians for governments to solve. Reasons for the change So why has the city bagged efforts to provide affordable housing? For one thing, developers launched a pretty credible campaign against inclusionary housing, questioning why they should be the only group to foot the cost of solving the housing problem and demanding concessions such as the ability to build higher-density projects in order to offset the costs. The current situation in Warner Center is a case in point. Since the passage of the temporary control ordinance, one developer, AvalonBay has agreed to set aside the required 25 percent of units at below-market rates for moderate income households. But another, Simms Development, which has plans to construct about 430 apartment units on the current site of the Canoga Park Swap Meet at Eton and Variel avenues has launched an appeal to the city council. “In principal, it’s clear to me and many others that this 25 percent requirement is illegal, plain and simple,” said Benjamin M. Reznik, a partner and chair of the land use group at Jeffer, Mangels, Butler & Marmaro, who is representing Simms. “The city never performed a study, never conducted any sort of an analysis or justification for how they get to impose such a huge requirement.” Los Angeles City Councilman Dennis Zine, who shepherded the Warner Center ordinance, says he did so to deter housing developers until planners could complete a study on the neighborhood to determine future needs. But even he concedes that requiring developers to absorb the cost of providing affordable housing may be unrealistic. “The bottom line is someone’s going to pay for it,” Zine said. “Building costs have skyrocketed and developers want to make a profit. Government doesn’t have the funds to provide housing.” Developers have long said that they would be willing to provide some of these lower-priced units so long as they were allowed to build more total units to make up the revenue lost. But higher density projects put city officials at odds with community and neighborhood groups, particularly in the Valley where single-family home neighborhoods have been prized. Perhaps most important, even to those willing to endure the political battle that would surely come, there is a growing realization that forcing developers to include lower-priced units in their developments would do little to solve the housing shortage. Even in cities that have passed an inclusionary housing ordinance, the number of units set aside rarely represent more than 10 percent of the project. With most of the city built out, most of the housing that can be built in L.A. is infill, and those projects are rarely larger than 200 or 300 units. “Inclusionary zoning ordinances simply don’t solve the problem,” said Samuel R. Staley, director of urban and land use policy for Reason Foundation, a public policy research group. “They are a political band aid. We’re not bringing enough units on line targeting enough income levels quickly enough. At the end of the day, inclusionary zoning ordinances don’t generate enough units at those targeted populations to make enough difference.”
