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Los Angeles Group Spells Out Reforms To Speed Housing Production, Attract More Construction Spending

Projects Took Nearly Four Years To Build As Residential Crisis Deepens, LABC Study Finds

Housing Production Construction Spending

The city of Los Angeles has a state-mandated goal of accommodating more than 450,000 units from 2021 to 2029. Los Angeles is among the most expensive places to live in America. (Getty)

By Jack Witthaus CoStar News May 17, 2023 | 3:49 P.M.

In Los Angeles it takes nearly a full presidential term for a housing project to be permitted and built.

That's too long of a timeline for many real estate investors and developers, further exacerbating Los Angeles' housing crisis and making the city one of the nation's most unaffordable places to live, according to a study by a local business group.

But two citywide reforms may speed the process of building thousands of new homes and further attracting more real estate development spending in Los Angeles.

The Los Angeles Business Council, an influential organization, said in a study this month the city should update its site plan review ordinance to accelerate production of projects as large as 200 units, up from the current 50 units. In addition, the city should eliminate site plan review and require permitting to be completed within 60 days for mixed-income housing instead of just affordable housing projects.

The study comes as Los Angeles Mayor Karen Bass extended an emergency declaration for the city's homelessness crisis on Wednesday as L.A. grapples with an growing unhoused population caused in part by a lack of residential inventory.

Meanwhile, cities across the U.S. are examining policies to speed housing production. In San Francisco, Mayor London Breed rolled out legislation in April to accelerate more home construction.

Seeking Developers

Mary Leslie, president of LABC, said the study's reforms would not only help spur construction but would attract more developers to L.A. to build. Currently, L.A.'s drawn-out apartment construction process is frightening away some investors and developers who can't finance years of waiting for approvals to build in the city, she said.

"If you create certainty, you will increase production," Leslie said.

These reforms may help L.A. get closer to its goal of building 456,643 housing units from 2021 to 2029. That figure was created through a state-mandated process known as RHNA, or the Regional Housing Needs Assessment, which requires California cities to accommodate projected housing growth.

The goal appears to be a stretch these days based on historical and current construction data. Los Angeles produced a mere 83,865 units between 2010-2019, according to the study.

“This study clearly indicates that we need to streamline the approval process if we want to meet our housing goals,” City Council President Paul Krekorian said in a statement. “We're already moving in this direction. I’m pleased to say the planning commission has approved my motion to forgo site plan review for affordable housing projects, and for many mixed-use and mixed-income projects with a substantial affordable housing component."

Los Angeles ranks in the top-20 most expensive U.S. cities to live, with average asking rents topping $2,218 per month, according to CoStar data. San Francisco maintains the top spot in the U.S. with an average asking rent of $3,033.


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