Los Angeles unveils plan to allow 250,000 new homes amid housing crisis

(The Center Square) - The Los Angeles City Planning Department released new draft ordinances aimed at zoning over a quarter of a million new housing units as the city faces a major housing shortage. While known for its large homes and laid-back lifestyle, Los Angeles is the most cramped city in the United States, holding more residents per room than even San Francisco and New York.

With housing approvals taking longer than construction, the department’s plan to allow for by-right construction of projects with at least 20% of units affordable to earners of the area median income (a requirement known as inclusionary zoning) is expected to significantly reduce overall development times.

Under the California Environmental Quality Act, review of environmental impact reports can be appealed by nearly anyone essentially indefinitely, leading many developers to give up on projects bogged down in approvals. One of developers’ largest costs is interest on loans — typically used to secure the land and pay for construction — which means delays in project completion lead to even higher costs paid in interest. Reducing approval times could thus significantly reduce development times — and thus housing costs.

“It looks like they're trying to allow by-right, ministerial (non-discretionary) approvals for as much housing as possible,” said Shane Phillips, a housing expert managing the UCLA Lewis Center Housing Initiative on X, formerly known as Twitter.

The city is also expanding its adaptive reuse program — which has since created 12,000 homes in downtown Los Angeles alone — from applying to just buildings from before 1974, to those that are 15 years old. The city opted not to include an inclusionary zoning requirement for its adaptive reuse program, noting, “an inclusionary affordability requirement would render most adaptive reuse conversions to residential uses economically infeasible.” The city also allows for conditional conversions under the adaptive reuse program for buildings at least five years old with approval from a zoning administrator under a conditional use permit.

In light of the region’s 20% office vacancy rate, conversions of unused commercial space could prove to be a boon for commercial property owners and those hoping for more spaces to live. With 4.5 billion square feet of commercial space in Los Angeles, and offices accounting for 16% of most commercial real estate, this means 144 million square feet of office space is likely lying empty at the moment. Should that be converted to the median 800 square feet apartment in Los Angeles, those empty offices could provide space for 180,000 new apartments.

Even if just a tenth of empty offices were converted to housing — many office spaces are simply unfit for conversion due to plumbing and access needs — that would still account for 18,000 new homes.