Affordable Housing Set for Debate

A controversial proposal that would require housing developers to offer below-market units will be introduced today in the Los Angeles City Council, the first step in what may be a long road toward passage.

For the last year, a policy known as inclusionary zoning has been a contentious issue in Los Angeles, either praised or cursed for its potential effect on the housing market.

Advocates for the poor characterize the policy as a tool to increase the city’s stock of affordable housing, while developers argue that the policy stunts housing development by driving up costs.

Until today, the debate has been conceptual.

Councilman Ed Reyes, who introduced the ordinance, said it addressed the concerns of both advocates and developers, and would change the lives of families who struggle to find housing.

“It’s going to mean that people who clean up buildings, people who assist our doctors, people who attend to public safety will not have to drive between two and four hours a day just to get to work,” Reyes said. “It will mean a relief of congestion and traffic.”

On Monday, two business groups -- the Central City Assn. and the California Building Industry Assn. -- released a report that sharply criticized a city-commissioned study that examined the feasibility of inclusionary zoning in Los Angeles.

“We agree that there is an affordable-housing crisis,” said Ray Pearl, executive director of the Los Angeles/Ventura Building Industry Assn. “But inclusionary zoning is the one way to ensure that the crisis continues, because it does nothing to help solve the problem.”

Mayor James K. Hahn, however, is among those who argue that the proposal is just a beginning and needs more work.

During Hahn’s administration, the city has produced about 9,000 units of housing, of which 44% have been affordable, said Renata Simril, the mayor’s deputy for economic development.

“We don’t want to slow down the tremendous progress that’s been made over the past 2 1/2 years,” Simril said. Hahn “wants to make sure that we’re sending the right message to the development community, that ‘we want you to build here.’ ”

Nationwide, more than 100 municipalities have inclusionary zoning policies. In general, municipalities require that units be set aside and, in return, offer incentives designed to offset the associated costs.

The ordinance to be introduced in the City Council today would be mandatory citywide and target developers of five or more rental units. Such developers would be required to set aside 12% of the units in their projects for low-income households, or 10% of units to participants in Section 8, a federal program that subsidizes the rents of low-income families.

Developers of five or more condominiums and single-family houses would be required to set aside from 20% to 40% of the units for below-market buyers.

The ordinance would offer developers the options of building the below-market units at a different site, or of not building and paying a fee to the city.

In exchange, developers would receive deferrals of building permits and fees; a reduction in the number of parking spaces required; an increase in the number of units that may be built; and a loosening of other restrictions that hamper development.

The proposal also offers expedited permit processing. If the city fails to act on an inclusionary application within 180 days from the date an application is deemed complete, the request will automatically be approved.

“The objection [from developers] is, ‘We can’t afford to do this because it takes too long to process,’ ” Reyes said. “What we’re saying is ... ‘Inclusionary-related projects will have a priority.’ ”

Those incentives have not satisfied developers and others, such as Carol E. Schatz, president and chief executive of the Central City Assn. “We’re going to have to fight,” she said. “We understand what pushes some to do this, but the economic realities are that it will suppress the housing market for some period of years.... This particular ordinance is draconian.”

Councilman Bernard C. Parks criticized the option that allows developers to build below-market units in a different location from market-rate units.

“As long as you have that ... we’re going to continue building affordable [housing] in poor areas and market rate in wealthy areas,” Parks said.

But proponents say inclusionary zoning is desperately needed. The Los Angeles Inclusionary Zoning Coalition, which consists of 64 organizations throughout the city, including labor unions, tenants groups and housing advocates, supports the ordinance.

“The proposal is more modest than what the coalition was proposing, which was 20% of units,” said Beth Steckler, policy director of Livable Places. “But I think it’s a really balanced approach. I think it has a really good chance of passage.”

Councilman Eric Garcetti, a backer of the motion, expressed confidence that officials will craft a policy that will not scare away developers.

“This city has been too slow to assist good developers [in] building housing, and we’ve also been too slow to catch up with the housing crisis,” he said.

Supporters of the proposal will hold a rally this morning on the steps of City Hall. They will be joined by council members Reyes, Garcetti, Antonio Villaraigosa, Cindy Miscikowski and Martin Ludlow.