In-demand neighborhoods should have even more affordable housing, councilmember says

One of LA’s incentive programs for developers is successfully putting taller, apartment buildings with affordable units near rail and bus lines.

But at least one local elected official is acknowledging that “there are areas where [the program] has failed.”

In some cases, Los Angeles City Councilmember David Ryu says in a proposal introduced today, residents are being displaced to make way for new buildings where they cannot live.

That’s either because their incomes disqualify them for the development’s low-income units or because they don’t make enough to swing the market-rate rents that the rest of the project’s units command.

Now Ryu is calling for a significant tweak to the Transit Oriented Communities program.

The councilmember wants to raise the number of affordable units that the city requires in buildings constructed in “high-market areas,” such as “Greater Wilshire” and Hollywood—neighborhoods, he says, “where real estate is more lucrative for developers, and market-rate rent is more out of reach.” Rents across the city remain high and being able to afford housing is a growing concern for many Angelenos citywide.

The TOC program has come under fire from several sides, including preservationists and tenant advocates. The program is also at the heart of a lawsuit against the city of Los Angeles filed by Fix the City, a group that has opposed other local proposals that aim to increase density.

Ryu says part of the problem with the TOC program is that it didn’t account for the varying costs of land across the city.

“In areas with high land values,” Ryu says in the motion introduced today, property owners and developers receive a “substantial windfall” from new development but the surrounding community does not gain a “commensurate value” in income-restricted affordable housing units.

The current guidelines require that up to 25 percent of units in a TOC development be set aside for income-restricted housing, depending on how affordable the units are and what kind of transit the project is close to.

Ryu is asking the city’s planning department to see how the system could also consider how in-demand a neighborhood is when determining how much affordable, income-restricted housing a project there must include.

There is a precedent for asking higher-rent neighborhoods to contribute more to the city’s push to increase the stock of affordable housing, Ryu says. He points to the city’s “linkage fee,” which the city charges developers of certain residential and commercial projects based on the size of their projects. (The revenue from that program goes into the city’s affordable housing fund.)

In 2018, the linkage fee was tweaked to make developers of projects in “high-market” areas contribute more money to the city’s affordable housing fund than those working in less expensive areas—it’s the model Ryu wants the TOC program to follow.

The motion still needs to be approved by the city’s planning and land use management committee, as well as the full council.