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In the midst of the sub-prime mortgage crisis and a slowing economy, a bright spot for potential homeowners and tenants is emerging from the Los Angeles City Council. The Council will vote Tuesday on enacting new economic incentives to spur the construction of workforce housing. For working families and future homebuyers, these incentives are vital to growing our city’s middle-class.
The housing incentive ordinance on the agenda is nicknamed SB 1818 after the originating state law. The state, through SB 1818, requires every municipality in California to offer incentives for developers who choose to include affordable, workforce housing in their new projects. For the past three years, a coalition of housing advocates, businesses, non-profit developers and local residents have worked with the city to develop an ordinance that encourages housing production, while protecting the integrity of single-family neighborhoods.
Under SB 1818, depending on where a project is built, a developer may be permitted to add additional square footage and more overall units in exchange for setting aside a certain number of units at affordable prices. This allows fixed costs to be spread over more homes, thereby benefiting both the potential homeowner or renter and the developer.
We all know that there is a significant shortage of affordable workforce housing in L.A. A 2004 study showed that L.A. grew by 65,000 people in that year alone, but only 9,000 new housing units were constructed during the same time—and this was during at the housing market’s apex when construction was at record levels.
The result is that many who work in L.A. live farther and farther outside the city. Police officers, firefighters, teachers and nurses are priced out of living in the community they serve. And longer commutes clog our freeways, forcing us to spend more time apart from loved ones, and hurt our environment.
Earlier versions of SB 1818 worried some who thought 10-story apartment buildings would be constructed next to their one-story ranch houses. Through careful planning and a series of meetings with residents, changes were made to ensure that those scenarios would not happen by implementing design guidelines and protecting historic preservation zones. Instead, higher-density development will be encouraged along new and future transit corridors—part of the larger goal to make public transportation more available to more Angelenos.
Three facts are at the heart of SB 1818:
- The city is required by state law to implement an ordinance based on criteria established by the Legislature.
- L.A. must build more housing in appropriate locations to ensure that the middle-class is not driven out of the city.
- Developer incentives including density bonuses are the best way to encourage more housing production.
We applaud the leadership of Council President Eric Garcetti and Councilmembers Jan Perry and Ed Reyes who were vocal supporters of SB 1818 during a council discussion last week. This initiative is the right thing to do for Angelenos and for the next generation who may have to move away from Southern California unless more middle-class housing becomes available.
Last Wednesday, the Los Angeles Times called SB 1818 “the city’s best bet for expanding the stock of affordable housing”. The Chamber agrees.
And that’s The Business Perspective.
Gary L. Toebben
President & CEO
Los Angeles Area Chamber of Commerce
The Business Perspective is a weekly opinion piece by Gary Toebben, President & CEO of the Los Angeles Area Chamber of Commerce.
Gary Toebben, President & CEO, Los Angeles Area Chamber of Commerce
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