(The Center Square) – Amid the worst housing shortage in the entire nation, Los Angeles Mayor Karen Bass announced a new executive order to reduce permitting time for housing by 25-30%, a move that could significantly expand housing production in the long run.
Given that developments are funded by loans that accumulate interest, reducing the time to procure permits would make it much easier for more developers to build in the city. Combined with the pending codification of Bass’s earlier executive order allowing for the streamlined production of higher-density affordable housing, the city says the measure could make significant strides toward alleviating its housing crisis.
According to an analysis from the Los Angeles Times, there are more people per room in Los Angeles than New York and San Francisco, making it the most overcrowded city in the nation — and thus the city with the greatest housing crisis. Housing experts say that the two main impediments to increasing housing production are permitting times, which makes projects more expensive and untenable by increasing interest costs, and land use regulations, which prevent the production of types of buildings that are financially feasible given the price of land and construction.
Noting that Los Angeles is currently on track to meet only 40% of its housing production goals required under its state-submitted housing plan, Bass ordered the city to reduce discretionary review, a process larger projects are subjected to that increases their permitting time due to required hearings and easily-filed lawsuits and adopt rules to reduce California Environmental Quality Act review thresholds that can increase the cost of environmental impact reports from tens of thousands to hundreds of thousands or millions of dollars in the case of lawsuits. Bass also ordered the city to reform building code requirements preventing the conversion of existing buildings into housing, a salient feature amid the city’s record-low commercial real estate occupancy rate but an ongoing shortage of housing. Lastly, the order also requires that the city reduce permitting times for mixed-income housing by 25-30%.
“The trajectory of our city’s future, as well as the overall well-being and economic prosperity of Angelenos hinges upon our collective commitment to confront the housing crisis facing Los Angeles,” said Bass in the order.
Housing experts supported Bass’s order and expanded on how both ED 7 and her first executive order, ED 1, could make major breakthroughs in reducing the time and increasing the choices in homebuilding.
“Permitting in Los Angeles is far more expensive, unpredictable, and politicized than it needs to be,” said California YIMBY research director Nolan Gray to The Center Square. “It’s great to see Mayor Bass taking the housing shortage seriously and leading on reform.”
“ED 1 was transformative. When it was written the expectation was that maybe it would result in a few thousand affordable units mostly by nonprofit developers,” said Los Angeles housing regulations expert Joseph Cohen May to The Center Square. “Instead, in the report the city released two days ago with the new draft ordinance, they announced there were 12,383 units in the pipeline under ED1, and from the analysis I have done, around 85% of them are privately funded. That’s more affordable homes than have been approved by the city over the decade from 2011 to 2021, all in a single year.”
Bass’s first executive order, ED 1, significantly reduced permitting and zoning requirements for projects deemed 100% “affordable” by area median income. Because ED 1 is only active as part of the city’s declaration of emergency on homelessness, Bass has instructed the city to create a draft ordinance to codify the order into law. It’s possible that ED 7 will also go through a similar process by which ordered changes will be codified into law under a new city ordinance drafted by the officials and voted upon by city council members.