Council Rejects Appeal by Luxury Developer on Low-Income Housing

The Los Angeles City Council has voted unanimously to uphold a city requirement that 15% of units in new residential developments near downtown be set aside for low-income residents, effectively ending a months-long effort by a luxury apartment builder to gain an exemption to the rule.

Upon the recommendation of the council’s Planning and Land Use Management Committee to close loopholes in the 1991 Central City Specific Plan, the council last week rejected developer Geoff Palmer’s appeal of the housing requirement. He had sought the exemption for his proposed 300-unit Visconti project at 3rd and Bixel streets.

“This was a critical vote to reaffirm our commitment to require housing that meets the needs of all income levels,” said Councilwoman Cindy Miscikowski. “We have a variety of jobs downtown, whether in the high office buildings or taking care of high office buildings. We want inclusionary housing.”

G.H. Palmer Associates has clashed repeatedly with affordable-housing advocates over the requirement, saying that the proposed development is not financially viable under the Specific Plan.

The developer plans to file a lawsuit challenging the City Council decision, which he claims imposes a penalty in excess of the project’s impact, said Palmer Associates Executive Vice President Peter Novak.

“If a project causes an impact, the city is allowed to ask for remedy,” Novak said. “In this case, the city’s demanding a remedy in spite of the fact that the project itself is a remedy.”

Affordable-housing advocates say developers should not be discouraged from taking on high-density downtown projects and that bond financing and tax credits are available.