The urban sprawl that defines Southern California also makes for overlapping layers of government regulation that could threaten the region's future economic growth, some business leaders warn.
Unlike San Francisco or New York, where the geographic boundaries are contained and long-established and government more centralized, Los Angeles County alone covers 4,070 square miles and includes 85 cities. In the last 10 years, five cities that once were just part of the county have incorporated, setting up their own rules and red tape, and another three communities currently are pushing for cityhood.
What does this mean for business? It means that a business must abide by various zoning and permit regulations set up by the local jurisdiction, even if the regulations are quite different from those in a neighboring city.
Rent control, for example, may fix rents on one street at $400 a month for a year, while rents for similar apartments three blocks away--in a different city--may rise according to what the market can bear.
On top of city or county rules, as well as federal and state regulations, there sometimes are regional bodies that can affect how certain businesses operate. A board of education often encompasses several cities, and the South Coast Air Quality Management District, which establishes air pollution standards for commercial and industrial facilities, covers Los Angeles, Orange, Riverside and San Bernardino counties.
Such complaints by business about government regulation are an old song, and in fact the Southland has made some progress in recent years to alleviate the overlap. But some leaders now say the Southland's reputation for crazy-quilt regulation could force out some businesses and keep others from coming in.
This "strangulation of regulation," as one business spokesman dubs it, is illustrated by problems in the region's construction and movie industries.
There's a spot near Toluca Lake that best demonstrates Dan Slusser's frustration with local government regulation on the film business.
Slusser, senior vice president and general manager at Universal Studios, points out a corner near the studio that is within the boundaries of the city of Los Angeles. "Then you walk across the street and you are in the county of Los Angeles. Another corner, and you are in Burbank. And all three jurisdictions, of course, have their own permits and requirements for filming."
For example, the processing fee in the city of Los Angeles is $115; $110 in Los Angeles County, and $100 in Burbank--not including the additional insurance, police and fire and per day charges that could be added.
Slusser says there has been some progress in persuading local governments to simplify such regulations, but it's still not enough to keep a fair number of productions from going elsewhere--where costs and regulations are reduced.
Representatives of the construction industry are also sounding alarms about local regulation.
"In Los Angeles, they have a fee for whatever you want to do," says Dick Wirth, executive director of the Building Industry Assn. "In the cities within the county, their fees for building permits and plan checks are 23% higher than the cities within Ventura, Riverside and San Bernardino counties."
But what Wirth calls "the strangulation of regulation" is not as easily solved as tossing out the rules. Those who regulate--the council members, supervisors and legislators--say they have to balance business' economic needs with constituent demands. And that need to balance is only going to increase, some say.
"More and more, it has come down to 'What is happening to the quality of life on my street?' or 'What is being built next door to my own house?' " Los Angeles City Council President John Ferraro says. "At the local level, we are now attempting to balance the economic survival of business with the everyday quality of life of our residents."
But Michael D. Antonovich, chairman of the Los Angeles County Board of Supervisors adds: "Government ought to be in position of expediting the location of business here." He notes that to help, the county several years ago instituted a one-stop center to simplify the building permit process and a one-stop filming permit office. The city has similar sorts of one-stop centers.
In Orange County, "it's getting tougher to get construction started because of the regulations and permits required," says Bob White, Orange County zoning administrator. "Years ago, if zoning permitted it and you knew the building codes, you could build. Now there are many discretionary permits that may depend on a planning official, commission or elected official; for instance, road fees may be required . . . (and) library and fire station fees mandated by the county."
Jim Kaprielian, a building supervisor in the city of Los Angeles, agrees. "It is getting much more involved obtaining a building permit than 10 years ago, or even five years ago," he says.
More clearances are needed from other agencies, such as zoning, and the department of transportation, and more fees like those for fire hydrants, school districts and fees connected to the state's requirement for building access for the disabled.
There are new ones, such as the city's residential development fee of $300 per dwelling unit. And, in some cases, depending on where and what a developer wants to build, an environmental impact report could be required to assess the effect a new building could have on sewers, traffic and schools, for example. That process often takes six months to a year, Kaprielian says.
As critical as some business leaders are of local government regulation, however, they don't lay the blame solely at the feet of politicians.
"Los Angeles and the state are aware of the red tape problem and are reacting," Slusser says. "The city, county and state film permit offices are now all in the same location and that expedites things. But I also know political people don't want to deal with angry calls from constituents who don't want to deal with a little inconvenience on their street because of filming. It's the people who seem to forget the importance this industry has to this city."
In the Southern California construction industry, politicians have raised fees partly in reaction to funding cutbacks mandated by voter initiatives, Wirth acknowledges.
"I understand that cities have been in a bind since spending limits were imposed," Wirth says. "But if local fees are adding $14,000 to the cost of a house now, who will be able to afford to live here in the future? We shouldn't put all the cost on the future residents and workers of certain areas. We can't close the floodgates. This area will never be a pueblo again."