A Market Solution to LA's Housing Crisis — Livable Communities Initiative

A Market Solution to LA’s Housing Crisis

Los Angeles is going to see an investment of hundreds of billions of dollars in the next few years as we build our housing deficit of 500,000 homes. We have an opportunity to guide that investment– do we want it to go to big developers building mega-projects or do we want to create a market where local mom & pops build smaller projects across the city? Does it have to be car-dependent, or can it be car-light or car-free? And given the shortage of public funding, what can we build without taxpayer dollars?

The Livable Communities Initiative wants to create a profitable market to build small-scale, high-quality, low-cost apartments in “15 minute” communities across LA– so housing gets built without relying on taxpayers, big developers, or the wheels of government.

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Background: The housing and homeless crisis in LA is tragic and has filled our sidewalks, parks and playgrounds with tents. What happened? Several forces conspired to make it unprofitable to build housing in LA – so the market stopped building. A housing scarcity followed, which led to rents skyrocketing (2X what they should be). The most profitable way to build became suburban sprawl, creating a traffic/air quality/climate nightmare. And worse – fear of more traffic activated neighbors to fight housing – and they are primarily fighting more traffic coming into their neighborhoods. They do this by trying to vote politicians out of office, despite the work of many brave leaders, this has a paralyzing effect on the system.

The LCI proposal is to create a new typology that sincerely addresses neighbor/NIMBY concerns, while dramatically bringing down the cost of building to create a highly profitable market. The new typology is small apartments built over retail without onsite parking or amenities (pools, gyms, rec rooms, etc). The housing is quick and inexpensive to build, and affordable to rent or buy: it can cost ¼ the price of buying a single family home on a residential street a block away. The critical component is this is car-free living in a “15 minute” community. This typology is for people who want to live in LA without a car, and walk and bike to everything they need – work, errands, and a transit stop to get around the city.

It is not for everyone – but a surprising number of people want this– especially young people, young families, seniors who age out of driving and people who love to walk and bike. Walking and biking neighborhoods are healthy, make people happy, and keep people in shape - a big priority for many. It is a far more affordable lifestyle (a car costs $10,000/year all in – $20k/year in savings for a couple). Walkable neighborhoods are the #1 driver of real estate, and raise surrounding property values significantly – and the fewer/slower the cars and the more calm and leafy the street, the more people will love the neighborhood. The Highline in NYC created one of the most beloved linear parks in the world, and raised surrounding property values by 2X-3x.

In order for there to be a similar effect, cities needs to invest in a legitimate, evidence-based and thoughtful street transformation to create a safe and lovely environment — turning this into this:

We want to create a stunning street with a beautiful architectural vernacular that holds its value. We want to simplify every aspect of the process so individual commercial property owners on a designated LCI street are incentivized to build the housing we want (sustainable, parking-free, high-quality units, etc). A property owner has easy access to ready-to-use architectural plans that have already been entitled – and come with a 24 hour permit. Builders can “dial in” the process, raising quality and lowering the time and cost (builders estimate a pre-fab LCI can go up in 6 months and Standard buildings cookie-cutter approach to build above retail on specifically-designated blocks that fit a certain criteria: in a major job center, at a transit stop, and on an under-utilized street with existing small retail – leveraging existing walkability, legacy family businesses and local charm and community.

The LCI is a detailed plan to make all of these changes at the same time to create the underlying circumstances for a market to thrive. The changes include:

Housing: Streamlining and cutting red tape for builders to build small, high-end apartments; giving parcel owners low-cost pre-entitled architecture plans
Street: Design guides to transform the street
Mobility: Best practices and case studies to ensure the mobility work (ie, locate an LCI next to a transit stop and along a street that already has lots of local shops)

Here is the detailed plan.