Developers Troubled by Charter Reform Plans

A drive to reform the Los Angeles City Charter has triggered some concerns in the real estate and building industry about the future of property development.

Much of the anxiety has been provoked by proposals to create neighborhood councils as part of an effort to empower residents. Under one scenario, the neighborhood councils would have no decision-making powers and simply serve as an appointed advisory board to each City Council member. But some proposals would create powerful elected neighborhood boards that would review and have control over community development.

The notion of elected boards being included in the city charter--which establishes the city’s government and power structure--has drawn opposition from some of Los Angeles’ most prominent business leaders, including developer Robert Maguire of Maguire Partners and home builder Bruce Karatz of Kaufman & Broad Home Corp. The issue is now being debated by two charter reform commissions, and voters might get to vote on the subject next year.

“If a developer is subject to a project-by-project review . . . that could potentially give neighborhood councils the right to go beyond land-use and get [control over] design issues and even color issues,” said Los Angeles developer Wayne Ratkovich. “It would be too unpredictable.”

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The planning and review process is already unpredictable and complicated as it is, according to many developers, builders and designers. Besides filing and paying for numerous permits and fees, developers must often negotiate deals with individual City Council members, persuade planning commissioners and woo homeowner groups before their projects get off the ground.

It’s not clear yet how neighborhood councils would get involved in the process. But many in the real estate business fear local councils would make it easier for small groups of residents to block developments of citywide or regional importance and make development more costly and less profitable. That could deprive the city of new investment, real estate executives say.

“We would end up with no place for low-income housing, no place for industrial uses, no place for police or other operations,” said Robert Harris, professor of architecture at USC. “Those [projects] are voted against in all of the wealthier communities and end up in less-affluent neighborhoods. So city planning ends up distorted.”

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Kaufman & Broad executive Glenn Brown said it is common for new housing projects to be opposed by neighborhood advisory boards where they exist. That’s no surprise, since the immediate neighbors have to deal with the inconvenience and disruption of construction as well as long-term increases in traffic congestion and population density. But developers have better luck appealing to elected officials and planning commissions that must deal with larger, regional issues.

“Fortunately, for our part, [neighborhood advisory councils] don’t have any power,” said Brown, who is vice president of land development for Kaufman & Broad’s greater Los Angeles division. “Very often a project that was turned down [at the neighborhood level] is still approved at the planning commission level.”

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But some planners and developers say that under a different scenario, the councils could play an important role by creating neighborhood zoning and development plans that have broad community support. As a result, a developer would have a relatively good idea whether his project would win public support and government approval, eliminating some of the risk and uncertainty that now surrounds the process.

If that were the case, even Ratkovich could endorse the arrangement. “Then the developer would know what they would get,” Ratkovich said. “It would be a terrific way to do it.”

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