Mayoral Candidates Weigh In On Moratoriums, Homelessness And Keeping Businesses In LA
Los Angeles residents have a big decision to make this summer. The city's mayoral primary is slated for June 7, and if no candidate wins a clear majority — which a new poll indicates is very likely — the city's next mayor will be determined in a November runoff election between the top two candidates.
Los Angeles' next mayor will have a lot on their plate. Some of the concerns most pressing for Angelenos are complex problems (homelessness, housing affordability) that have only been exacerbated over the last two years amid the coronavirus pandemic.
Bisnow reached out to the top seven candidates — Karen Bass, Joe Buscaino, Rick Caruso, Kevin de León, Mike Feuer, Ramit Varma and Mel Wilson — with questions about how they would approach issues central to commercial real estate, including eviction moratoriums, homelessness, increasing the housing supply and making LA more business-friendly.
Here are answers from two candidates: LA Council Member Kevin de León, who represents Council District 14, and San Fernando Valley-based real estate broker Mel Wilson.
The following has been lightly edited for style and clarity.
Bisnow: Recent corruption scandals have created greater scrutiny about the relationships between developers and city politicians, especially when it comes to campaign donations. These scandals have stoked what some have called an anti-development sentiment in the city. Do you think that LA is hostile toward development and developers, and, if so, is that something that needs to be addressed? How would you thread the needle between growing and improving the city and rebuilding the public trust around new projects and the firms that propose them?
de León: As you may know, I took office in the wake of a corruption scandal surrounding my predecessor. I understand that people have a lack of trust and faith in government officials, because I was elected to restore that trust in my district. While I don’t think there is an anti-development sentiment — everyone acknowledges the need for affordable housing development — there is a sense that some developers are playing by different rules than everyone else. That they are gaming the system to only cater to the wealthiest Angelenos. At the same time, I do understand the very real complaint that developers and builders have around the confusing morass of housing regulations and permitting hoops they have to jump through to get a project built. I have proposed a number of ways to streamline that process both in my homeless housing action plan as well as my A Way Home LA package of motions.
Wilson: I think that many LA residents, Neighborhood Council members and community stakeholders are hostile towards development and developers. This is something that needs to be addressed immediately.
I have a master’s degree in commercial real estate. I have been the housing advocate for the Southland Regional Association of Realtors, an 11,000-member Realtor trade association, for 30 years. I understand the tug-of-war between housing production/commercial development and community stakeholders. I also understand LA City Council members are unwilling to make the tough decisions to approve worthy development projects. I understand the community planning land use and zoning process. I served as president of the Los Angeles Countywide Citizen Planning Council. LACCPC served in an advisory role to the Los Angeles County Regional Planning Department. LACCPC paved the way for formation of the cities of Agoura, Calabasas and Santa Clarita. We aided LAFCO, the county formation agency.
Neighborhood groups want to protect their hard-earned residential lifestyle. These groups and individuals perceive that any new development, whether it's residential or commercial, is a threat to their lifestyle. They want to preserve their single-family lifestyle in Los Angeles. These groups organize to protect open space, neighborhood parking and congestion relief.
As the housing advocate, I know that LA is woefully short on adequate housing to accommodate the growing housing needs.
I thread the needle by educating these groups and appealing to their desires to protect their neighborhoods while enlightening them about the need for workforce housing to meet the needs of LA’s workforce, their children and grandchildren. They want housing that’s affordable for themselves and for LA workers, many of whom are their children and grandchildren. I keep it simple by sharing the facts about the shortage of housing production compared to the housing needs. Housing production in LA has had a 10,000-unit shortfall annually for the past two decades. I explain that there is a supply-and-demand crisis that is causing the prices of homes for sale and apartments for rent.
As mayor of LA, I will be an advocate for housing and commercial development, while promoting open space, walkable communities and transit-oriented communities. As a Metro Board member, I convinced Mayor Villaraigosa to appoint me co-chair, along with LA City Planning Commission President Bill Roschen, to LA City Transit Oriented Corridor Cabinet. We worked with the housing and commercial real estate industry and created over 170 tactics that were adopted by the City Council and created TOC ordinance for the LA City Planning Department.
Bisnow: Homelessness in the city of Los Angeles rose during the first year of the pandemic. Although county homeless count figures for 2021 are not available, anecdotally, the number of people unhoused and living on city streets continues to rise. What do you believe is the most significant action you could take as mayor to reduce the number of people unhoused in Los Angeles? What role, if any, should the commercial real estate sector play in those efforts?
de León: There is not “one” action that a mayor can take to solve homelessness. Homelessness is the nexus of many different issues — losing one’s home is merely the last and most visible symptom of this crisis.
My approach involves taking a few different pathways: one is to make housing more affordable, and to that end, I will mandate affordable housing in every new housing project. Second, we know that we need permanent supportive housing with wraparound services, but this type of housing can take years to build. We need emergency housing now, which is why the City Council approved my 25x25 plan to build 25,000 emergency units by 2025. I’m not waiting for the title of Mayor to get started on this important work; I am already building high-quality emergency units throughout my district, such as our two “Tiny Home” projects, as well as the hotels that our office has purchased and converted to temporary housing. While these are not permanent fixes, this allows people who are currently unhoused to have a roof over their heads and a door they can lock behind them. Third, I believe the City of Los Angeles must have control over its own destiny when it comes to addressing public and mental health issues. That’s why I’ve proposed creating the City Department of Public and Mental Health to bring the responsibility for providing addiction and mental health services to our unhoused neighbors in-house.
Currently, all those functions are the responsibility of the county, which means that, ultimately, we — as the second-most-populous city in America — do not have control over the services we are providing to our unhoused, or even how we are budgeting for those services. By centering these functions within the City of LA, we can not only create our own continuum of care to draw down state and federal funds; we can create departments that are ultimately responsible to the mayor and the people of Los Angeles — not the entirety of LA County.
Wilson: The most significant action I will take to reduce the number of unhoused people is to lead the way to work with every level of government to determine the combined resources available to house our unhoused neighbors.
Second, my team and I will work with the commercial real estate industry and identify industrial and commercial space for adaptive reuse development. Commercial brokerages will connect the private and public sector clients to the properties for a fee. Within six months, we will have hundreds of shelter beds ready for moving unhoused people into temporary supportive and ultimately permanent supportive shelters.
We will engage public, private, nonprofit and faith communities to collaborate. We will use public and private sector funds to finance construction and retrofitting of industrial buildings and abandoned or underutilized commercial space into 30,000 shelter beds. The nonprofit sector and faith community manage the facilities providing supportive and spiritual services. We will ask faith community organizations to consider using their excess land for temporary and permanent shelter facilities for a fee. The private sector will build, and the public sector will purchase or lease these adaptive reuse facilities for a reasonable return on investments.
Bisnow: A residential and commercial eviction moratorium has been in place for two years in the city of Los Angeles. Though efforts are being made to prepare for the moratorium’s eventual rollback, there isn’t yet a date for when that might happen. When do you think those moratoriums should sunset, and what concurrent steps must be implemented to ensure that the transition goes as smoothly as possible for tenants and landlords?
de León: For many people, the eviction moratorium has been the only thing keeping a roof over their head. We also recognize how hard this period has been for property owners, which is why when the city's dispersion of rent relief became bogged down. I worked with AAGLA to get renter/landlord relief funds administered from the state level where that money could get out to landlords more quickly. As a City Council, we will re-examine the moratorium, but at a time when its elimination will not simply add more people to the ranks of the homeless on our streets.
Wilson: The COVID-19 Emergency eviction moratorium has been in place too long without just compensation for property owners. The moratorium should sunset by January 2023. This will give property owners and their tenants time to negotiate agreements between themselves.
Many businesses were shut down too long, making it nearly impossible to stay open. I believe the city has a duty to help business owners to stay afloat. My plan is to offer forgivable business loans to help make up back rents and retrofit businesses for the now and for the future. Businesses that hire people at wages at 20% above minimum wage for a year or more will become eligible for loan forgiveness.
Bisnow: LA residents are among the most rent-burdened and most overcrowded in the country. Whether the city’s problem is that LA is woefully short on housing units, short on housing units that residents can afford to live in or both depends on who you ask. What is the main hurdle to easing the housing crunch, and what can be done in the short term to begin to alleviate that crunch?
de León: In the short term, I have proposed mandating affordable housing in every new residential project. This will not only create more desperately needed affordable housing stock, but it will give some predictability to the building and permitting process for developers. We also need to upzone commercial corridors to have more vertical space to build affordable units. So much of that valuable real estate was lost after those areas were downzoned. By upzoning, we can quickly create more affordable units in areas that have lacked them.
Wilson: LA has a housing supply shortage crisis. There are several major hurdles. The Regional Housing Needs Assessment Allocation requires LA to facilitate nearly 500,000 new housing units.
First, the city needs to increase the clerical support staff to alleviate the backlog of plans that are stacking up on the city planner’s desk. LA City development fees (affordable housing linkage fee, Quimby and many other fees) combined amount to $50K to $60K per unit before a builder can break ground to build. Second, I will work with the City Council and offer a waiver and/or deferment of these fees in lieu of builders developing affordable workforce housing and low-income housing units. As mayor, I will use my platform to educate stakeholders and city officials of the urgent need to rapidly increase the production of housing at every price point. Third, I will push the City Planning Department to create a process for a master planning environmental impact study (EIS). These EIS in each community-planning area can be used by developers through the timeline of the adopted community plan.
Bisnow: Los Angeles has far fewer below-market-rent apartments than it has people who need those units. It is slated to lose thousands more over the next two years as affordability covenants on almost 3,700 income-restricted affordable units in the city of Los Angeles expire, clearing the way for those affordable units to be rented out at market rates. What streamlining measures and other steps to facilitate the construction of income-restricted affordable housing in the city of Los Angeles would you take as mayor?
de León: Again, I would go back to mandating affordable housing in every new development. And that mandate will be at significantly higher rates than we are seeing today. The market, left to its own devices, will not create more affordable housing; we’ve seen that time and time again. In my A Way Home LA package of motions, which were approved by the City Council, we have put together a menu of standardized plans for modular multifamily housing, accessory dwelling units and affordable housing. The plans are pre-approved by all relevant departments, greatly streamlining the permitting and building process, and lowering their overall cost. These types of pre-approved plans add much greater predictability and affordability to the process of building new affordable units.
Wilson: We offer incentives, expedite the development and building permit process. We waive and defer development fees. The lower the cost of the end unit, the more we discount, waive and defer development fees. We assign caseworkers who will be responsible for each low-income project from each relevant department, from start to finish. We create ombudsmen who break through the red tape on these high-priority projects. We fund a strong advocacy program to obtain funds from county, state and local governments to fight for more public funds to subsidize these development projects.
Bisnow: Over the last two years, a number of high-profile companies, including CBRE and AECOM, moved their headquarters out of Los Angeles. What would you do to bolster economic development in the city and incentivize businesses to stay and grow in LA?
de León: We cannot expect economic growth if we do not address our homelessness crisis. That will be my first priority. I also believe that we have to make Los Angeles a more affordable place to live. Part of my plan to make LA more affordable is a proposal to convert the gross receipts tax into a tiered system. Essentially, this would allow smaller businesses to pay less than large corporations, allowing these businesses to keep more of what they earn and in turn, help grow the city’s economy. I am also supportive of creating a Los Angeles Public Bank to free up more capital to lend to more Angelenos. This is an idea that has broad support in California and has been made possible by a new California law. We will also be expanding LA’s CleanTech hub to bring more good-paying jobs of the future to our city.
Wilson: I served on a nine-member LA City Business Tax Advisory Committee (BTAC) for four years. Our task was to reform the LA Gross Receipt Tax Code with the condition that our solution must be revenue-neutral. We engage the services of Dr. Charles Swenson from USC, a foremost expert in municipal revenue accounting. BTAC worked on a pro-bono basis with representatives from the accounting, entertainment, hotel/hospitality, real estate and nonprofit industry.
We came up with a plan that met the revenue-neutral requirement. BTAC members voted unanimously to eliminate the LA Gross Receipt Tax. Our research discovered that eliminating LA Gross Receipt Tax would send a message that LA was open for business. The replacement revenue for the business tax revenue would be achieved through the increase in sales volume, user fees, utilities taxes, real estate transfer taxes and property taxes. Our model showed that in three years, LA would annually generate more than the 5% of lost revenue from eliminating the business tax.
We saw that car dealers, Fortune 500 and other firms were leaving LA City to neighboring cities and other states. At that time, CBRE and AECOM were still located in LA. Unfortunately, Mayor Garcetti was unable to make the decision after instructing us to work on this important task.
As mayor, I will lead the way and focus on attracting and retaining firms that are within LA’s strategic industry clusters. We will promote an area in the city that will serve as a campus for strategic industries. We will collaborate with local universities, community colleges, trade schools, high schools and labor groups.