An industrial-strength conundrum for L.A.

At a time when the local economy is shrinking and City Hall is already struggling to close a $406-million budget deficit, L.A.’s growing population is putting increasing pressure on city officials to build more affordable housing and create more middle-class jobs.

Unfortunately, these needs sometimes conflict with one another, and they are conflicting today in what was once the industrial heart of Los Angeles near downtown and in Hollywood. There, City Hall has lately opted for housing over jobs by using L.A.’s industrially zoned land for purposes other than originally intended.

Here’s the problem: With the aerospace industry largely gone, the two greatest sources of middle-class jobs in the city today are the garment and entertainment industries. By allowing more industrial land to be used for retail and housing, the city effectively limits the growth of those industries -- and the jobs that come with it. At a certain point, the garment and entertainment industries may even leave town.

Industrially zoned property -- which makes up about 8% of L.A. -- doesn’t get a whole lot of love from urban planners. It is usually separated into limited (warehouses or machine shops), light (furniture manufacturing or lumber yards) and heavy (car factories or rail yards) manufacturing, and is home to such things as old movie and television studios and auto repair shops.

Much of the industrial land is concentrated where you would expect it to be -- around LAX, the port of Los Angeles and in the garment district south of downtown along the L.A. River. But strands of it turn up in unexpected parts of town. There is, for instance, a major strip of land zoned for light industry that follows the freight rail lines running through the middle of the San Fernando Valley and ending in the Chatsworth industrial district. A large portion of the land in Hollywood is industrially zoned and houses support services for the entertainment industry.

In 2005, Mayor Antonio Villaraigosa declared to his department heads that “these industrial areas are a precious resource that, if lost or severely compromised, will be impossible to re-create.” Yet in the years since, the city has continued to chip away at the land.

Its gradual erosion can be traced to two factors. The first is the city’s need to generate more sales-tax revenue. Retail development, by law, has always been permitted on at least 75% of the city’s industrial land, and developers have increasingly pursued the opportunity to build and operate big-box stores on it. Over the last decade, about half of the new development on industrial sites has been for commercial purposes.

More recently, a second assault on industrial land has come from the city’s quest to add housing, both affordable and otherwise. Unlike retail, building housing on industrial land requires getting variances in the zoning laws, which the City Council has been increasingly willing to grant. One of the biggest such developments is Playa Vista, near Marina del Rey, which was once the site of an aerospace manufacturing facility but is now home to about 3,200 new housing units, with at least 2,000 more planned.

It’s not hard to understand why residential and retail developers are increasingly eyeing industrial land in Los Angeles. A 2006 study by Keyser Marston Associates, a real estate consulting firm, looked at the price of land in the downtown area. It found that industrially zoned land -- valued at about $38 a square foot -- was far cheaper than comparable residentially zoned land -- about $177 a square foot. That price difference has some affordable-housing builders, as well as market-rate developers, looking at sites in the garment district and in Hollywood that they previously would have ignored.

The city seems all too willing to give up its industrial land. Two recent cases illustrate the point.

In the first, the City Council, in pursuit of more affordable housing, overturned a Planning Commission decision that would have blocked construction of an 180-unit live-work loft project in the garment district. As a result, 2.5 acres of industrial land was lost, a possible location for future jobs.

In the second case, the Planning Commission approved a 210-unit market-rate housing development on three acres of land that was previously the site of a local television studio. The commission’s rationale was that the new housing would be located near major bus lines, encouraging residents to use public transportation rather than cars.

One problem with allowing residents to live in industrial areas is that once they become exposed to the noise, air quality and other environmental issues presented by their industrial neighbors, they often push for new, stricter regulations that effectively limit future use of the surrounding land for industrial expansion and job creation.

It is certainly reasonable for the city to use industrial land to produce new revenue and create more affordable housing. But those gains must be weighed against the potentially more significant long-term cost to the city’s ability to give the garment and entertainment industries space to grow.

Consider the entertainment industry. The small support businesses -- lighting, sound, scenery and special effects -- and major postproduction facilities in the county help keep the industry anchored to Southern California. And they are primarily located on available light-industrial land in Hollywood, the Valley and on the Westside.

If L.A. doesn’t bank industrial land to support growth in the entertainment industry, that growth may go elsewhere. Because much of the entertainment industry these days is digitalized, it doesn’t matter if workers who put together movies, soundtracks and TV shows are looking at monitors in Hollywood, Phoenix or Salt Lake City.

Garment manufacturers also may be squeezed out of their L.A. niche if residential complexes or big-box stores are built adjacent to them. And the same can be said for other industries -- Web-based information services, biomedical research, green industries -- that will fuel future job growth in the city.

The city Planning Department and the Community Redevelopment Agency have been struggling to define a coherent industrial-land policy ever since Villaraigosa declared these areas to be a precious resource. The two came up with a draft in 2007 that puts the city’s industrial land into categories: either “to be protected,” “potential [for] mixed use” or “[in] transition.” It’s not hard to see that, under such a policy, the City Council could readily find a “community benefit” in converting industrial land to another use, further eroding the city’s industrial base and the jobs it supports.

It makes little sense to talk about preserving the city’s industrial lands while at the same time approving selected housing and mixed-use developments on old industrial sites. Such a policy will generate revenue and add housing, but the wage-earners needed to fill the mixed-use projects will probably be working in Arizona, Colorado or Utah.