April 30, 1990 - From the April, 1990 issue

Let’s Put an End to Single Issue Planning in Los Angeles

Los Angeles City has attempted to resolve many land-use and transportation issues with piecemeal solutions: from TFAR to Trip Equity Plan. Charles E. Loveman Jr. and Larry Kosmont, real estate consultants with Kosmont & Associates specializing in entitlements services, argue that issues facing Los Angeles City's neighborhoods will be best tackled with a holisitic approach—lest, the City wishes to continue in gridlock forever. 

Transfer of Floor Area Ratio. Flex Density. Trip Equity. Housing Linkage. Balanced Growth Element. Mixed Use.

Considering these and other exotic planning mechanics currently under consideration by the Los Angeles City Council, it appears that the city has entered a new era of sophistication and comprehensiveness in its planning and physical development. Or has it?

Are we embarking on a new era in which, through planning, we can solve the problems associated with continued growth, or instead are we repeating the same mistakes we made in the past? These mistakes, encompassed in our previous approach to zoning, emphasized single purpose solutions and a strict segregation of uses.

The results have been long commutes and congested traffic, because of our past practice of encouraging isolated residential areas located long distances from employment centers, or a poor physical integration between adjacent uses, owing to a zoning which, for example, concentrated retail strips next to a single family neighborhoods.

The past fifteen years have been turbulent times for city planning in Los Angeles. Given a framework of planning controls, consisting principally of a zoning ordinance dating to 1946 and various plans and policies adopted in the early 1970’s which together constituted the General Plan, in retrospect Los Angeles was poorly equipped to deal with the tremendous office and retail growth and strong demand for housing which occurred since 1975. Along the way, fundamental changes in our system of government decision-making related to real estate development occurred, making an already inadequate set of planning tools even less effective. Such changes have included:

  • Proposition 13, which since 1978 has dramatically altered the sources (and hence uses) of municipal revenue, and for many cities throughout California has changed the view of commercial real estate development from something to be regulated to something which provides the major source of new revenues.
  • Assembly Bin 283, which required Los Angeles by both an action of the State Legislature in 1979 and by a Superior Court order in 1985 to make its General Plan and zoning consistent with each other, and which caused the wholesale rezoning of the city to conform to the land use and height district designations of the applicable Community Plan.
  • Proposition U, adopted by the voters in 1986, which overnight halved densities for commercial areas throughout the city from FAR’s of 3:1 to 1½ :1.
  • The TRIP (traffic reduction and improvement plan) ordinance, adopted by Council in 1987, which established a process for preparing specific plans for areas of the city impacted by traffic, and led to the adoption of transportation impact fees, which fees currently range from a low of $4,900 to $5,600 per PM peak hour trip for those districts now governed by ICO’s.
  • The Friends of Westwood decision (1987), which changed the “rules” for what constitutes a ministerial versus a discretionary approval for projects, and thus significantly lowered the threshold size for projects subject to EIR’s, site plan review, and other forms of discretionary review.
  • Regulation XV, adopted by SCAQMD in 1987 to improve regional air quality and reduce traffic congestion, which requires all employers of 100 or more persons to promote employee participation in trip reduction and ridesharing programs, and whose effects on commuting patterns, tenant location decisions, and property development have yet to be felt.

However, notwithstanding these substantial changes to the political and planning landscape, the number of planning-related crises keeps increasing. Depending upon who you talk to, we are in the midst of at least one of the following: a traffic crisis, an air quality crises, an affordable housing crises, an infrastructure crisis, or a neighborhood protection crisis. In fact, all of the preceding falls under the umbrella of out “quality of life” crisis.

Our collective response to all these problems is to continue to tinker with the bundle of controls and approvals which constitute the entitlement process for commercial development projects. The focus increasingly is to attempt to correct a problem through a number of single-purpose solutions, be they geographically specific, say traffic congestion along Ventura Boulevard, or city-wide, say affordable housing.

However, in all these cases, Los Angeles seems to be confronting a single problem with a narrow solution, without taking into account the interdependencies, the spill­overs, and the unintended effects which inevitably result.

For instance, consider a handful of the mechanisms currently being considered to address our city’s various problems:

  • Trip Equity: To address the traffic congestion along Ventura Boulevard,  the so-called trip equity plan is a zoning system in which individual properties are allowed to generate a specific number of traffic trips. Given this trip allowance, a developer is free to construct a project, provided the project complies with certain use and height constraints, and does not exceed the traffic threshold.
  • Flex Density: A variant on the trip equity approach, flex density is a concept contained in the proposed Wilshire Center Plan which sets property development rights according to traffic level of service or housing performance criteria. As traffic congestion increases, or as the balance between jobs and housing worsens, property development rights decline accordingly.
  • Transfer of Floor Area Ratios (TFAR): This mechanism, proposed for Downtown’s Central Business District, enable desirable below-market land uses, such as housing, historic buildings, and open space, to compete on a level playing field with highest and best market uses. Since the below-market uses typically do not fill up the entire height and bulk envelope allowed them by zoning, TFAR permits these properties to sell their unused development rights to another property, thus providing a means for them to economically co-exist with high-rent offices.
  • Development Fees and Exactions: Housing linkage fees, traffic impact fees, Metro Rail benefit assessment fees, TFAR public benefit fees, public art fees, sewer permit fees; all these are fees assessed on new development to fund a specific public objective, e.g., affordable housing, rapid transit construction, upgraded infrastructure, etc. Presumably, there is a relationship between the dollar amount of the fee being assessed and the additional need for the particular public objective caused by the development of the new project. What can’t be presumed is that the authors of one linkage fee proposal have taken into account all the other adopted and proposed fees, and evaluated a project’s ability to carry the extra cost burden in light of underlying market. rent, land price, and other relevant economic conditions.
  • Mixed Use Ordinance: A proposal from the Mayor’s office to “encourage developers to provide housing, commercial use, and parking facilities under one roof, ... [in order to] improve the quality of our air and reduce traffic congestion ...”

What is missing from all of these mechanisms is an overriding sense of how all the parts are connected to the whole. Just as with our approach to zoning originally put in place 45 years ago, which emphasized single and separate uses, and underestimated the need for interconnectedness among these uses, so our current approach tries to solve one problem while overlooking its relationship to others.

For instance, what happens when we zone property along the Ventura corridor based on the traffic-generating characteristics of the use, and collect impact fees to pay for transportation improvements necessitated by the new traffic? According to the planners and traffic engineers, the Boulevard’s traffic problems are solved.

In reality, what is likely to happen is property will develop in office uses, because offices generate half as many peak hour trips as retail. The ambience of the retail space which remains may be destroyed by the street widening (and sidewalk narrowing) which will be carried out as part of the transportation improvements package.

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And retail and office uses will quickly intensify along neighboring corridors, such as Sepulveda, in order to avoid the fees and restrictive height requirements imposed by the trip equity plan. As these uses relocate, they will take with them the traffic congestion the plan was intended to solve, in effect dispersing the problem over a wider area.

What is likely to happen when the City adopts a flat $5 per building sq. ft. housing linkage fee? One effect may be that commercial development in areas where the City wants to encourage growth may become economically infeasible. Downtown projects, with their high rents, may be better able to afford the linkage fee than secondary market areas, where the flat fee represents a higher percentage of rent.

However, since only a small segment of office tenants can afford Downtown rents, Los Angeles may be inadvertently encouraging the flight of smaller, entrepreneurial businesses to Glendale or Burbank or Long Beach. And as this office space moves out of Los Angeles, so does the City’s ability to capture an appropriate amount of fees to support housing.

Finally, what happens when the proposed mixed use ordinance, say a project consisting of affordable housing on top of retail, meets up with Proposition U. In order to carry the land cost burden to make the housing affordable, the retail component must build out at the maximum density of 1½ :1 FAR. But having done so, there may be no development rights left to accommodate the housing component.

These examples are meant to show that, frequently, two or three or more public policies are working at cross-purposes, with the effect that only the most conventional, least creative project is permitted.

We need to think systematically how the city’s development patterns work, so that we will understand the effect on office development in North Hollywood when another impact fee is proposed Downtown, or can predict where we are encouraging retail or office development to locate when our entire planning approach is based on minimizing traffic congestion, or are aware of what impact we are having on affordable housing production when we limit commercial development opportunities in secondary centers.

Likewise, on the positive side, we must better understand how the city’s uses, markets, and functions interact so that we will know what combination of incentives and controls will attract growth to the areas where we want it.

For instance, how do we encourage growth, consistent with our other public objectives, along major transportation corridors where we are making massive public investments in transit and traffic improvements?

We believe Los Angeles is at the beginning of a new era—but we don’t yet know whether it’s an era of orderly planning or accelerated chaos. It’s true that the past fifteen years have taught many lessons, and with them our palette of planning tools has expanded. However, these tools, when applied to solve only a single issue, miss the point. Why are we only applying a trip equity approach along Ventura; why are we only using TFAR Downtown?

What is called for now is learning how to apply these tools in combination, so that we are encouraging growth where we want it, and are leveraging private development to create the public objectives we otherwise can’t afford.

Furthermore, we must also begin the massive job of integrating our existing land use based zoning system with the new generation of performance-based planning regulations. Clearly this is no small effort. To do the job properly, it will involve an overhaul of our entire system of planning and zoning, and challenge us to understand our city in a way we never have before, as a unified set of locales, functions and markets.

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