The Neighborhood Integrity Initiative is Lying to You

I've already written several articles about why the Neighborhood Integrity Initiative would be disastrous for the future of Los Angeles, but I think my opposition can be boiled down to one fact: The backers of this initiative are liars.

They'd like you to believe that they're fighting for the little guy, preserving affordable housing and sticking it to greedy developers and corrupt politicians. What they really want is to preserve their views and their parking at the expense of anyone unlucky enough to rent a home in our city, and to enshrine into law a 1950s vision of Los Angeles that is no longer sustainable—either environmentally, socially, or economically. By limiting the availability of new housing, they will enrich property owners by further impoverishing renters.

I wanted to convey that point as simply and clearly as possible, and the below image is my first effort at that. Share far and wide, if you would, and make sure that if this initiative goes to the ballot next March, you tell every damn person you know to vote against it.

Downsized: What to Make of the Updated Neighborhood Integrity Initiative

News came out today that the folks behind the Neighborhood Integrity Initiative have retracted their initial submission, due to go on the November ballot, and are planning to put a new, condensed version of the initiative up for a vote in March 2017.

The original initiative was an embarrassment, something I described with no reservations as the Donald Trump of ballot initiatives. It was misleading, disingenuous, and would have accomplished the opposite of most of the goals it claimed to support. This new one is much condensed, and it's... well... hmm. It's still not good... but it's on the right track.

Here's a quick summary of what's changed, what's the same, and how I think city leaders and pro-housing, pro-inclusion advocates should respond.

What's Different

The most important change to the initiative is that they removed many of the restrictions on how communities could be planned in the future. This was the most dishonest part of the initiative, and it made clear that the goal was never to make City Council "follow the law" or "preserve affordability," but rather to freeze Los Angeles in time—to the detriment of affordability, sustainability, walkability, and all those other great "-abilities."

Now, gone is the language that prohibited any changes in the size (bigger or smaller) of "islands of density" within the city, and the requirement that all neighborhoods within 1/2-mile of rail be zoned the same, and that all parcels within 1/4-mile of any other parcel match the prevailing scale, intensity, and height of existing development. In other words, all the stuff that said neighborhoods could never, ever change.

That's great news, and a smart decision on the part of the initiative's backers, because it was completely indefensible.

What's the Same

Other than that, most everything in the initiative is the same.

The limitations on spot zoning have been retained, which in my view is fine. In the short or medium term we need a better solution than ad hoc interventions like spot zoning. Basically everyone agrees that something needs to change, and although this isn't a complete solution, it's a part of one.

They also kept the requirement that the general plan and community plans be reviewed and considered for amendment every 5 years, which is also good policy. It's something we really should have already been doing, but we've lacked the staff for a long time—particularly since the recession, when the Planning department's budget was decimated.

The initiative still has the requirement that environmental review be facilitated through the city. Currently developers can pay consultants to have this done, and the new law would make it so that the city either does the review themselves or, more likely, contracts with the consultant directly, in place of the developer doing so. Nominally this is to ensure transparency, but the consultants are still doing the work and the city has the final review in either case, so I don't really see the purpose or benefit of this. It seems guaranteed to delay the environmental review process and increase overall costs, but that's about it. It looks like poor policy that's motivated solely by a mistrust for government, and I think we can do a lot better.

Still true: When vacancy goes down, rent goes up.

The law also keeps the moratorium on any development that requests a general plan amendment, including projects that were approved before the passage of the law but granted a GP amendment. As the initiative's supporters would point out, this doesn't affect all development, but it would affect a lot of it, and it would put a serious freeze on a lot of development activity at a very inopportune time. The moratorium would last two years (or whenever the general plan and community plans were updated, if that happened sooner, which it wouldn't), and during that time there would be a lot of jobs lost and an almost guaranteed continuance of the city's record-low vacancy rates—and the rent increases that always accompany them.

The language now gives a nod to affordable housing by exempting developments with 100% affordable housing from the moratorium, but it's not clear whether this would prohibit projects with on-site market-rate housing for management. What we can be sure of is that it would not exempt projects that utilize the density bonus to build mixed-income housing, which is a cost-free source of affordable housing for the city.

Last, it continues to force developers to over-build parking, stating that under no circumstances may required on-site parking be reduced by more than 30 percent. Building permanent supportive housing for formerly homeless residents who will mostly never drive? Too bad. Want to try a new housing model that provides ZipCar or Car2Go vehicles for every resident in your building, and to pay for it by cutting back on parking costs? Nope. Looking ahead 10 or 20 years to when driverless vehicles are the norm, and on-site parking is no longer necessary? Sorry, still gotta build it, at a cost of $30,000 to $50,000 per space.

NII: An empty garage for every tower!

What Should Be Done

This initiative went from being about 75% horrible, to 50-50. Maybe even 60-40. There's some good stuff, and some bad stuff, and I think the balance between the two presents an opportunity.

My opinion is that City Council should seize the opportunity by taking the reasonable aspects of this of this initiative and committing to adopt them voluntarily. They could and should do the following three things:

  • Eliminate spot zoning to the degree demanded by the initiative, or to some close approximation. It might be that there are some extreme cases for which city staff think a "spot zoned" general plan amendment would be justified, and those might be retained. Ideally, they would adopt policy as close as possible to that found in the initiative, because it's mostly pretty sensible.
  • Require regular updates of the General Plan and Community Plans. This includes committing to immediately hiring the staff required to actually make this happen.
  • Make an effort toward increasing transparency in the environmental review process. I really don't know if the language in the Neighborhood Integrity Initiative helps achieve this goal in any way, so it could be a good idea for the city to meet with NII representatives to see what they are trying to achieve and how it could best be accomplished.

There would also need to be something that holds the city to these commitments, and forces them to adopt the changes expediently. Transitional policy would be welcome because it would eliminate the need for a moratorium, which is really just the NII supporters using a hammer where a scalpel would be more appropriate.

If City Council adopts these changes, all that's left is the parking regulation. That part is purely bad policy and shouldn't be negotiated. 

After adopting these voluntary changes, I see one of two things happening. Either: 

  1. The initiative's backers are left with very little to rabble-rouse over and the law dies a silent death come March; or
  2. Both sides claim a moral victory and we can move on with our lives.

I would hope for everyone's sake that the latter would occur, and I think that—just maybe—this is the hoped-for end-game of the people behind the NII. If Council adopts the majority of these changes, the supporters can (rightly) claim that they've forced the city to make a positive change, and they can stop wasting money on gathering signatures, which they now have to restart anyway.

The rest of us, meanwhile, can be assured that Los Angeles will still have the flexibility to plan for a better future. As advocates for a Greater LA, I think this is the direction we should be pushing things in the coming months. Feel free to share your comments whether you agree or disagree, and if you think a different path is warranted, please share your own suggestion(s). 

Questions You Should Ask Supporters of LA's "Neighborhood Integrity Initiative"

Last week I wrote about 7 of the most important reasons to oppose the Neighborhood Integrity Initiative (NII), a misguided and deceptive ballot initiative that seeks to halt most new housing development in Los Angeles. It got around to the anti-growth folks at City Watch, and they predictably freaked the eff out. 

Their responses, for the most part, had little to do with the language of the initiative itself—which was the focus of my article—and instead relied on ad hominem attacks and conspiratorial assertions about corruption in City Hall. Based on their comments you'd think we lived in the era of Tammany Hall, and that I was having my undoubtedly lavish lifestyle subsidized by the greedy developers who are tearing our lovely city to shreds. I think their reaction should give readers an idea of how intellectually bankrupt this initiative is.

We know what The Coalition to Preserve LA's future city doesn't look like, but what is their actual vision for the future, and how will the Neighborhood Integrity Initiative help them achieve it? Image from AIDS Healthcare Foundation.

Most of the people I interact with who oppose growth (or investments in bicycle and transit infrastructure, or just about positive change in the city) have a very narrow argument: Someone we don't like is doing something we don't like, and so we need to stop them. What they rarely seem to recognize is that maintaining the status quo is itself an affirmative choice. Preventing new development will not stop change, it will just force that change to manifest itself in other ways.

That's exactly what's happened across California for the past 30 years, as we've continued to grow but built very little housing to accommodate the newcomers—with predictable results. We thought that if we stopped building housing, people would stop coming. As it turns out, the people still came. And instead of having new homes ready to accommodate them, they had to compete with the rest of us for the housing that had been built 30, 50, 80 years ago. Prices for those older homes—which were becoming an increasingly scarce resource—went up. The pressures of evolution and change exist regardless of our efforts; the only power we have is in how we choose to channel those forces, whether for good or for ill.

For this reason, I always respond to these individuals with questions about their vision for the city. How will they channel those forces—or will they just stick their heads in the sand and hope that they disappear? You don't want a subway through your neighborhood, or multifamily housing within a 1/2-mile of your home, fine. Then what? What happens next? What are the impacts of that decision; what is your vision for Los Angeles in 5, 10, 20 years, and how do your proposed policies help us to achieve that vision? Things staying exactly the same as they are today is not an option.

With that in mind, here are some of the questions you should ask supporters of the Neighborhood Integrity Initiative when they try to make the case for their anti-growth agenda.

 

Question 1

Most of the subsidized affordable housing being lost in Los Angeles is due to expiring contracts with the city, not demolition. What will the NII do to increase the supply of affordable housing and protect housing from losing its affordable status?

 

Question 2

Does your initiative have the support of affordable housing developers—those who know the most about what it takes to bring housing to low and moderate income families? What are affordable housing developers saying about the NII?

 

San Francisco: Great character and "integrity"—but a city we want to mimic? Photo by Andrew Napier.

Question 3

Other cities, notably San Francisco, have done a great job of preserving their neighborhood character over the years by limiting new development and density, but they are also prohibitively expensive for all but the most wealthy. What about the NII sets us on a different course from cities like San Francisco? If new people move here, where will they live without displacing lower income households or crowding more people into the same units?

 

Question 4

What will happen to the ~200,000 people employed in the construction industry in Los Angeles County? Will they find work in some related field, or will they lose their livelihood and have to leave the region?

 

Question 5

There are some pretty strict on-site parking requirements in this initiative, and new structured parking usually costs $30,000-$50,000 per space, which means adding about $200-400 per month in rent. What do these parking requirements mean for affordability? And with car-share growing and driverless vehicles on the way, what will happen to all of these spaces in 10 or 20 years?

 

Question 6

If this is really about reigning in City Council's power and preventing them from giving sweetheart deals to developers, why does it have so many other unrelated provisions? Why not just limit spot zoning and stop there, instead of also making it so that communities can't choose to grow their "islands of density," reduce parking requirements, shift toward mixed-use development, etc.?

 

Question 7

What will this initiative do to help the city address its homelessness crisis? We need almost 20,000 permanent supportive homes just for the homeless individuals in our city; where will they go if the NII is passed?

 

More Ideas?

These are just the first few that come to mind. Make your own suggestions in the comments below; if there are some really good ones, I may update the post to add them to the list.

To read my earlier article discussing the top reasons to vote against the Neighborhorhood Integrity this November, click here.

Reviewing LA's Homelessness Report, Pt. 3: Key Housing Recommendations

This is Part 3 of my review of the City of Los Angeles' Comprehensive Homeless Strategy report, focusing specifically on the Housing section, which is home to the largest number of recommendations and the lion's share of the cost associated with addressing homelessness. Part 1 covered some background on the homelessness crisis and summarized the types of shelter and housing programs that the City has historically relied on, and may expect to use in the future. Part 2 looked at the efficacy and cost of different homelessness reduction strategies. In this section I review the specific recommendations included in the report.

Recommendations for Addressing Homelessness Crisis

There are a whole bunch of interesting recommendations in the report, and for the sake of brevity (ha), I'll limit this to a few of the key items.

1. Increase Supply of PSH and RRH; Grow Prevention/Diversion Capacity

Based on the CAO's analysis, it won't surprise anyone to learn that the primary recommendation within the Housing section of the report is to increase the supply of Permanent Supportive Housing and Rapid Rehousing units, and to ramp up Diversion and Prevention efforts. They also suggest that we are currently oversupplied with Transitional Housing; this may present an opportunity for conversion to a more effective use.

Current and proposed resources for several homelessness intervention strategies. Table from Comprehensive Homeless Strategy.

Including beds/units for both individuals and families, they propose the following changes (ten-year cost estimates for each program are in parentheses):

  • Increase Emergency Shelter beds by 371
  • Increase capacity for Prevention/Diversion by 1,230 individuals or households ($22.5 million)
  • Increase supply of Rapid Rehousing units by 3,434 ($294 million)
  • Decrease the number of Transitional Housing units by 1,844 units (N/A)
  • Increase the supply of Permanent Supportive Housing units by 9,895 units ($742 million for construction, $807 million for leases)

The total cost of these programs would be approximately $1.87 billion over 10 years.

The production trends over the next 10 years are graphed below. They show an early dependence on Permanent Supportive Housing leases, which are slowly reined in as new PSH units are constructed. As a long-term housing strategy, construction is favored over leases because it avoids worsening LA's already extremely low rental vacancy rates, which are a major contributor to rising rents. Rapid Rehousing units and Diversion investments are assumed to be made at a consistent rate over the ten-year period.

Projected annual unit production trends over a 10 year period. Graph from Comprehensive Homeless Strategy.

The report recommends an early reliance on PSH leases because construction will take several years to ramp up and we clearly do not have time to wait to address homelessness in the City.

2. Establish Sustainable Funding Stream to Address Homelessness

Many other large cities have established Housing Trust Funds with dedicated funding streams that are reserved for homeless reduction programs. San Francisco is provided as an example: In 2012 the City passed a local ballot measure that captured some of the former redevelopment agency's revenues that had previously been used for affordable housing funding.

The Budget section of the report notes that there are a variety of funding sources potentially available, including a set-aside from the General Fund, affordable/homeless housing benefit fees, increases to parking or hotel taxes, or a bond measure. Regardless of the path our elected leaders take, they should remember that the cost of proactively addressing homelessness must be measured against the cost of doing nothing—in many cases it is far more costly to leave someone on the street than to house them and provide the full wrap-around services that address their challenges directly.

3. Utilize 4 Percent Low Income Housing Tax Credit to Expedite Construction, if Necessary

One challenge to developing over 7,000 units of Permanent Supportive Housing is the ability to secure enough complementary financing (from the state, federal government, etc.) to support the City's roughly $100,00-per-unit contribution. If those non-City funds don't materialize, each new unit would be considerably more expensive. A major hurdle to securing this outside support is Los Angeles' dependence on 9 percent Low Income Housing Tax Credits (LIHTC), which give the City more money but are far more competitive and for which there is limited total funding. An alternative is to finance development primarily using 4 percent tax credits; this option is more expensive for the City—a $150,000 per-unit subsidy rather than $100,000—but is much more easily accessible.

Assuming that every Permanent Supportive Housing unit we build is financed using 4 percent tax credits, the City's development cost would increase from $742 million to $1.1 billion. But realistically, this may be the only way to fund such a large number of PSH units—particularly when we're trying to subsidize thousands of units of low income and moderate income affordable housing at the same time.

4. Expand Adaptive Reuse for Homeless Housing

Taking a cue from the wildly successful Adaptive Reuse Ordinance in downtown LA, which has been widely credited with spurring the revitalization of the area, the authors suggest that adaptive reuse can also be used to expand the supply of Bridge Housing and Permanent Supportive Housing. Aside from providing another route to producing new housing, adaptive reuse has also been found to be slightly cheaper than building new units with similar characteristics.

Homeless housing and service providers already have experience converting buildings from hotel or motel accommodations to housing for the homeless, so the key would be to incentivize continued conversions through additional funding, expansion of Adaptive Reuse Incentive Areas, reevaluation of strict adaptive reuse requirements, and fast-tracking for zoning and permitting processes associated with redevelopment.

The 28th Street Apartments are an adaptive reuse of a former YMCA facility, now equipped with an employment and youth training program and 49 units of supportive housing for the chronically homeless, the mentally ill, and youth exiting foster care. Photo from Architect Magazine.

5. Use Public Land for Affordable and Homeless Housing

The City and County both own a lot of property, and where it isn't be used productively it should be considered as a site for affordable and homeless housing development—especially where underutilized property is transit-accessible. This recommendation aligns with similar policies established elsewhere, such as at Metro, as the growing affordability crisis seems to be turning every governmental body into an affordable housing developer, whether they like it or not.

The upside of developing on public land is two-fold: First, since the City/County already owns the property it doesn't have to spend time negotiating a purchase (or taking through eminent domain) from a private owner. So we get new housing faster. Second, since the land has already been paid for, usually at least several decades ago if not longer, the total cost of development is reduced—an important goal in the face of roughly $2 billion in homeless housing needs.

There's a bunch more in there, but those are some of the most impactful strategies in my view. If you'd like to see the full list, you can download the full Comprehensive Homeless Strategy report and skip to page 119. 

Call to Action

The Comprehensive Homeless Strategy is being presented to City Council's Homelessness and Poverty Committee on Wednesday, January 13th at 3:00 PM in City Hall room 340. If you're able to make it, I strongly recommend that you attend and speak in support of the strategies and goals outlined in this report. I'm hoping to set aside some time to attend myself, so hopefully I'll see many of you there!

Thanks for reading!

Reviewing LA's Homelessness Report, Pt. 2: Efficacy and Cost of Housing Strategies

This is Part 2 of my review of the City of Los Angeles' Comprehensive Homeless Strategy report, focusing specifically on the Housing section, which is home to the largest number of recommendations and the lion's share of the cost associated with addressing homelessness. Part 1 covered some background on the homelessness crisis and summarized the types of shelter and housing programs that the City has historically relied on, and may expect to use in the future. In this section I review the relative efficacy of these different programs, and the cost of each.

Efficacy of Homelessness Interventions

Permanent Supportive Housing, Rapid Rehousing, and Prevention are the three homeless interventions from the above list that are most strongly favored in this report, and the preference for these strategies is backed up by empirical evidence in support of their efficacy. Below is a sample of the data presented in the report in support of each approach.

Permanent Supportive Housing (PSH)

There are approximately 9,000 chronically homeless persons in the City of Los Angeles, including about 950 who are living on the streets with their families. The chronically homeless—identified in the Comprehensive Homeless Strategy report as those homeless for at least one year, or including four homeless events totaling 12 months—consume a disproportionate share of public resources and frequently suffer from debilitating medical conditions or disabilities. For this reason it is chronically homeless persons that are best-suited for Permanent Supportive Housing. 

Unlike shelters and Transitional Housing, PSH is not time-limited and affords residents a degree of stability that allows them to more effectively address whatever medical or social problems they may face. Residents' likelihood of success is further supplemented by case management and, frequently, on-site mental and physical health programs. The success of this approach is reflected in the retention rates for its residents: After 6 and 12 months over 90 percent of individuals, and over 80 percent of families, are still housed.

Retention rates over 6 and 12 months for chronically homeless residents in Permanent Supportive Housing. Table from Comprehensive Homeless Strategy.

Full independence from public support is an unrealistic goal for a number of homeless persons with especially severe disabilities and other challenges. If the goal of our homeless policy is to keep City residents of the street rather than cycling through relatively ineffective sheltering and transitional programs, Permanent Supportive Housing is an essential component of a comprehensive strategy. 

Rapid Rehousing (RRH)

Rapid Rehousing is targeted at homeless persons with a less intense need for public services, and as such it is able to achieve a high rate of success at a lower cost than permanent supportive housing. Since 2013, 93.5 percent of clients served by RRH have remained stably housed.

Prevention

Between September 2009 and October 2011, 4,218 individuals in 1,724 households were served by Prevention programs in Los Angeles. Of these clients, rental assistance was the most common form of financial assistance offered, followed by help with security deposits and utility payments. Every household involved in the Prevention program(s) was engaged in the case management system, and about 60 percent received legal services assistance.

Prevention services are provided at considerably lower cost than sheltering or housing programs; details of the costs for each program type are detailed in the following section.

Costs of Shelter and Housing Programs

A surprising finding from the report (for me at least) is that Emergency Shelters and Transitional Housing are actually more expensive than Permanent Supportive Housing on an annual basis, despite their lower efficacy. Below is a figure from the report that summarizes the estimated cost of many of the programs described above.

Summary of estimated annual costs for several housing programs. Table from Comprehensive Homeless Strategy.

Notice that Emergency Shelter and Transitional Housing, both of which have been de-prioritized by the federal government, are more expensive on an annual basis than PSH. The $15,000 per household for Permanent Supportive Housing includes direct services for residents (such as medical care and mental health treatment) as well as the annualized cost of building new housing or a lease for existing housing. The report estimates a cost of about $351,000 for studio and 1-bedroom apartments and $414,000 for larger units; about $100,000 of that would be picked up by the City. The cost of a lease ranges from about $12,000 to $20,000 per year depending on the size of the unit.

Individuals and families placed in PSH are typically those with the highest Vulnerability Index scores—those deemed highest-priority for housing and possessing the greatest acuity of need. As a result, they are often the most costly in terms of the consumption of public resources such as law enforcement, medical care, and substance abuse treatment programs. As numerous studies have shown, the cost of treating homeless persons on the street can actually exceed the cost of housing them. One such study in Santa Clara County notes that, while homeless residents cost the county an average of $5,148 per person, "individuals with costs in the top 5% accounted for 47 percent of all costs and had average costs of over $100,000 per year." Another, smaller-scale study performed by USC found that providing four homeless individuals with Permanent Supportive Housing actually reduced public service costs by more than $20,000 per person over a two-year period.

In Santa Clara County, homeless residents with public costs in top 5% accounted for 47% of total costs spent on services for the homeless, and individuals averaged over $100k in costs, per person, per year. Chart from Economic Roundtable.

In Santa Clara County, homeless residents with public costs in top 5% accounted for 47% of total costs spent on services for the homeless, and individuals averaged over $100k in costs, per person, per year. Chart from Economic Roundtable.

The cost of Prevention, by comparison, is just $3,500 per household. The report rightly views expenditures on Prevention and Diversion as cost avoidance strategies—by spending money on these Prevention, some individuals and families can avoid the need for a more expensive housing intervention.

Some additional data on the relative costs of each option are provided below. Again, note that for PSH, the City would either pay to have new units constructed (capital cost), or would pay for an annual lease—not both.

Summary of City's capital, service, and rental subsidy costs for several housing programs. Table from Comprehensive Homeless Strategy.

Part 3 is up next, where I'll review some of the key recommendations in the Comprehensive Homeless Strategy.