Approved by voters less than a month ago, affordable housing and labor initiative Measure JJJ has not even gone into effect yet, but some real estate experts are already telling the Real Deal that it’s slowing down the Los Angeles development market.
Uncertainty over how the law, which mandates percentages of affordable units in many new construction projects and requires that developers hire local laborers, will be implemented is bound to give some investors pause. The impending vote on the Neighborhood Integrity Initiative, which would all but halt major development for two years, is also likely feeding into this perceived chilling effect.
But, as the Real Deal notes, Los Angeles developers might not have anything to worry about—that is, if the state gets involved.
California legislators could potentially negate many of the mandates stipulated by JJJ, including many of the labor requirements, by maintaining that setting the prevailing wage is the state’s responsibility alone. A more direct approach from legislators—and one that would also block the Neighborhood Integrity Initiative, should it pass in March—would be creating a new requirement that zoning rules be approved by local government officials alone.
If state lawmakers aren’t keen on these ideas, there’s always good old fashioned litigation. Land use attorney David Waite tells the Real Deal that JJJ may be vulnerable to a challenge on the state’s single subject matter rule, which requires that ballot measures address only one issue. Since JJJ includes requirements for both affordable housing and labor, it could be nullified for not focusing on a single matter.
That’s good news for developers, and it could be good news for LA residents if investors really are as concerned about JJJ as some have claimed. In spite of recent surges in development activity, the city is still in the midst of a severe housing shortage that is driving up prices and forcing many to move out of state.
Measure JJJ passed by a wider margin. More than 60 percent of LA residents voted for it—clearly establishing a mandate for more affordable housing and better labor practices. At this point, the labor requirements imposed by the measure seem quite vulnerable, but the affordable housing component could still be preserved in some form.
Even if legal action or legislation at the state level strikes down JJJ, the city council is (slowly) moving to create its own affordable housing ordinance with similar requirements. If passed, those new rules could be much more difficult to challenge.
- See you in court: How Build Better LA and the Neighborhood Integrity Initiative could be challenged [The Real Deal]
- Measure JJJ: Angelenos overwhelmingly support affordable housing mandate [Curbed LA]
- Why aren’t some housing advocates supporting Measure JJJ? [Curbed LA]
- Ballot Measure JJJ [Curbed LA]