Yesterday, the Los Angeles City Planning Commission took its first look at draft ordinance which would establish new requirements for on-site affordable housing in coastal communities.
The new ordinance would update the city's implementation of the statewide Mello Act, a 1982 law which 1) prevents cities and counties from approving developments that remove or convert existing affordable housing without offering replacement units and 2) requires that all new housing developments include affordable housing, if feasible.
For over 20 years, the City of Los Angeles has processed developments in coastal neighborhoods - which include Del Rey, Playa del Rey, Pacific Palisades, San Pedro, Venice, and Wilmington - under interim procedures which mirror the statewide Mello Act. The existing process - which was created as the result of a lawsuit relating to a development on the Venice Boardwalk in 1993 - would be replaced by the new ordinance.
On an annual basis, the City of Los Angeles approves approximately 70 Mello Act cases, according to a staff report. Since 2015, these projects have accounted for a total of 970 residential units - including 109 deed-restricted to very low-income households, and an addition six units for low- and moderate-income households. The majority of these developments are located within the Brentwood-Pacific Palisades, Venice, and San Pedro community plan areas.
The draft ordinance considered yesterday by the Planning Commission includes stronger requirements than the decades-old interim procedures now in effect. Under the proposal, developments would not just be required to offer a one-to-one replacement of existing affordable units, but also "like-for-like' replacement, meaning that the new homes would be of an equivalent size and include the same number of bedrooms.
Likewise, the draft ordinance would apply to any project which removes or replaces 50 percent of existing exterior walls, foundation walls, or roof framing for one or more residential units, clarifying an ambiguous definition of "demolition" in the interim procedures.
An existing exception for units that have been vacant for over one year would be curtailed to only apply to owner-occupied units. Non-owner-occupied units would only be exempted if left empty for more than five years.
The draft ordinance would remove the ability for developers to locate replacement affordable units at a different location, and would require that the replacement housing be priced at the same affordability level of the existing units or lower.
Under the proposal, the Mello Act would apply to any housing development - including condominium conversions - with 5 or more residential units, a broader pool of projects compared to the 10-unit minimum in the interim procedures. New projects would be required to set aside affordable units at the following percentages:
- 8 percent for extremely low-income households; or
- 11 percent for very low-income households; or
- 20 percent for low-income households; or
- 40 percent for moderate-income households.
Exemptions from the on-site requirements may be granted by the Housing and Community Investment Department, following a feasibility study conducted by a third-party consultant selected by the city.
The draft ordinance also establishes a new system in which developments with fractional units - meaning on-site requirements of .5 homes or less - are accounted for by a fee based on the square footage of the proposed development. The fee would be paid directly into a new fund, which would go toward the development of new affordable housing in coastal zone neighborhoods.
Lastly, the draft Mello Ordinance would also establish a right of first return policy to residents directly displaced by new developments. That process would also be administered by the Housing and Community Investment Department.
Krista Kline, representing City Councilmember Mike Bonin, spoke in favor of the draft ordinance, but requested several changes to the ordinance - including the removal of moderate-income housing from consideration to focus on lower income levels. Additionally, Bunin’s office - citing similar complaints raised by the Legal Aid Foundation (LAFLA) - asked for a more restrictive definition of "demolition," to prevent developments from being built piecemeal to avoid the requirements of the ordinance, and asked for affordability covenants to be either extended for the lifetime of a project or in perpetuity.
Susanne Browne, an attorney with LAFLA, commented that draft ordinance is not compliant with the statewide Mello Act as currently written, and echoed the changes requested by Bonin's office.
Robin Rudisill, a representative of the Coastal San Pedro Neighborhood Council, argued that the interim procedures have failed to protect or generate affordable housing in coastal zones, and recommended changes which would expressly prohibit the demolition of residential structures for non-residential developments - including hotels and mixed-use projects. Rudisill also urged the Commission to include more robust tenant protections in the ordinance, once again citing LAFLA's proposed revisions.
Planning staff expressed support for the tenant protection measures urged by LAFLA, but stated that they would be enacted through an implementation plan, rather than being incorporated into the Los Angeles Municipal Code through the ordinance.
The inclusion of a moderate-income housing option, according to staff, was intended to align the Mello Act ordinance with the City's Transit Oriented Communities guidelines and other affordable housing incentive programs available to developers.
Commissioners Dana Perlman and Jenna Hornstock expressed concern that the proposed fee structure for developments with less than five residential units could prove cost prohibitive, and ultimately limit housing production within the coastal zone.
Likewise, staff noted that developers of affordable and supportive housing have expressed reservations about a proposal to institute a 99-year covenant on below market-rate units in the coastal zone, as such a requirement could jeopardize their ability to secure funding for future projects. A exception for affordable housing development was suggested by several members of the commission.
Commissioner David Ambroz, speaking in support of a 99-year covenant, suggested that it may result in an adjustment period for developers, but could ultimately be a successful policy.
Commissioners, unable to reach a consensus on a path forward, voted to continue consideration of the Mello Act ordinance to May 13, allowing staff time to make adjustments based on feedback from public comment and the Commission.
The item will require the approval of the full City Council prior to adoption.