A few weeks ago, I wrote about the City Council’s mandate for low-income housing. This week, the Downtown News has a big piece on the Mayor’s Plan for requiring new developments to include affordable housing, and the uproar it’s causing with developers who say they are already suffering in the current housing/credit crunch:
Mayor Antonio Villaraigosa last month quietly released a proposal that would require nearly every new housing project in Los Angeles, including privately financed developments, to contain some affordable units. As the effort progresses, few outside city government are satisfied.
The so-called Mixed-Income Housing Policy is still a work in progress, but has already caused sharp division among the handful of business, development and housing advocates who have seen it. Some say it could further hamper an industry already suffering from the nationwide credit crunch, while others say the affordable housing moves do not go far enough.
But the Mayor can’t win, because on the other side, affordable-housing advocates say the plan isn’t bold enough:
Meanwhile, Paul Zimmerman, executive director of the Southern California Association of Nonprofit Housing, called the proposal “a bit timid” and said he hopes to see it strengthened in the coming months.
“Housing affordability is one of the top two or three major dilemmas we face in this city,” Zimmerman said, “and we need a really substantial ordinance to start tackling that issue.”
If it was ever implemented, the plan seems like it would have an impact on developments. Here’s what it calls for:
developers of rental projects would have to include some level of affordable housing. They could choose between reserving 12.5% of their units for very low income households earning up to 60% of the county’s area median income (less than $35,000 per year), 17.5% for low income households earning 60%-80% of the median income ($35,000-$47,000 per year) or 22.5% for moderate income households earning 80%-100% of the median income ($47,000-$60,000 per year).
Developers of for-sale projects could reserve 12.5% of their units for low income households making 50%-100% of the average median income ($29,000-$60,000 per year) or 22.5% for moderate income households earning 100%-180% of the average income ($60,000-$107,000 per year).
Interestingly, the low-income units wouldn’t have to be part of the actual project—developers could build them elsewhere in the neighborhood, or even just give the city land to build them.
But with downtown prices falling so hard so fast, it does seem like developers would be hard pressed in that area to make this work. Units in downtown are already selling in the $200,000 range in some cases—and there are a lot of empty, developer-owned units languishing out there, not to mention dozens of short sales and foreclosures. It can’t be a fun time to be in the loft-building business. Here are a few examples:
- Bartlett Building for $225,000: On the market 50 days
- Little Tokyo Lofts for $298,845: On the market 266 days
- Little Tokyo Lofts for $249,000: On the market 94 days (there are a lot for sale in this development)
- And just for fun, my favorite building, the Eastern Columbia: A 2/2 fo r$735,000, on the market 3 days. Despite the market conditions, I’d still be tempted to buy here. The listing says it was designed by Thomn Felicia of Dress My Nest. Not to be too catty, but the photos make it look a little like Overdress My Nest.