By Jan Breidenbach, PhD
Proposition JJJ is an important LA City initiative on next week’s ballot that I support; but with much attention on candidates’ races and state measures, voters may just now be studying it. As someone who’s worked for 25 years on issues of housing affordability (and spent 10 years prior to that in the labor movement), I’ve been tracking the public discussion about Prop. JJJ and find opposition to it confused and not based on facts.
Prop. JJJ puts new requirements on residential developers in Los Angeles when they want to build projects that are bigger than allowed by current zoning. To have these projects go forward, developers often need a zoning change or a General Plan Amendment. These changes increase the value of the project and developers’ profits. They are not automatic, however, they are the City’s to grant. Prop JJJ sets up a process that recoups some of this increased value by requiring developers to include some affordable housing in these projects, pay decent wages to the construction workers building it and hire some of these workers from our neighborhoods.
However, the opposition to Prop. JJJ would have us believe that if it passes, all housing development will screech to a halt, we will have more homeless people, fewer homeowners and higher unemployment. The reality is developers will continue to do what they do—build. With Prop JJJ, they will build and help out with our greatest challenges: lack of affordable housing and income inequality.
Opposition argument #1: Prop. JJJ’s inclusionary requirement will stop development. Our State history shows otherwise. Over 250 jurisdictions in California have inclusionary requirements (many of them mandatory) but California builders still build. Santa Monica and Pasadena have had inclusionary housing policies for a long time, but builders still build. San Francisco has an inclusionary policy, but builders still build. Last year the California Supreme Court ruled that inclusionary requirements are a valid way for cities and counties to address their affordable housing crises. Further, the LA County Department of Public Health, projects that Prop. JJJ will provide quality housing to tens of thousands of individuals who would otherwise not be able to afford it.
Additionally, developers will have choices in how they provide the affordable housing. They can include more or less units based on the incomes of the potential residents (i.e., the lower the income, the fewer the units). They can also pay a fee into the City’s Affordable Housing Trust Fund instead of adding the units.
Development in Los Angeles will not stop because of a voluntary inclusionary policy.
Opposition argument #2: Prop. JJJ’s requirement for decent wages and local hire will stop development. Those opposed to Prop. JJJ often state that common sense wage requirements result in huge cost increases. Again, history shows otherwise. The Furman Center in New York found that the modest amount of prevailing wages is around 10 percent, but they also reduce contractor extortion, limit off-schedule delays and stem losses due to shoddy work done by an unreliable work force. Furthermore, labor costs are offset by the value gained by the types of entitlements that trigger JJJ and land values adjust as well. Respected real estate research firm Keyser Marston found that zone changes created millions of dollars in additional profit for developers in Los Angeles.
Construction is a low-wage industry, which exacerbates LA’s income gap. A 2014 statewide study found 25 percent of all construction workers in California were paid $13/hour or less. This means those who build LA’s housing are often too poor live in it and require deeply affordable housing units themselves. It should never be City policy to provide incentives to developers and their contractors when they pay poverty wages and engage in predatory employment behavior.
“Trickle Down Housing”. In the end, the objections to Prop. JJJ—from the Los Angeles Chamber of Commerce and some private developers—rest on a fallacy called “filtering,” a theory that assumes higher-income households move “up” into newer housing and lower-income households take their place. The problem is, it doesn’t work. Recent data from San Francisco showed it can be 30 to 50 years before “filtered” housing is available to low-income families. Even then, there is no guarantee that this housing is affordable.
Add gentrification and filtering theory goes completely awry. Instead of leaving older neighborhoods for new ones, higher income households are often moving the other direction, looking for a denser, more urbanist community. Low-income families do not find lower-cost housing. They find themselves displaced.
Los Angeles is a great City made less so by high housing costs and widening income inequality. We need forward thinking that recognizes both our problems and our potential and that moves the City forward—for everyone. Prop. JJJ is just that.
Jan Breidenbach is an Adjunct Professor in the Sol Price School of Public Policy at the University of Southern California (USC) where she teaches housing policy, land use and urban/community development, with a specialty in affordable housing.