At its meeting on December 10, the Los Angeles City Council voted unanimously to adopt a suite of new land use regulations aimed at carrying out the goals of its 2021-2029 housing element.

The four ordinances, which collectively comprise the Los Angeles Housing Element Rezoning Program, are as follows:

The Citywide Housing Incentive Program (CHIP), which incorporates

  • updates to the state density bonus program;
  • a Mixed-Income Incentive Program to generate so-called "missing middle" housing typologies and new development on opportunity corridors; and
  • an affordable housing incentive program to provide development incentives for 100 percent affordable housing developments, especially in higher resource areas.

The Housing Element Sites and Minimum Density Ordinance, which enacts state housing laws for opportunity sites identified in the city's approved 2021-2029 Housing Element, including requirements for replacement, by-right development of projects with 20 percent affordable units, and minimum densities.

The Resident Protections Ordinance, which creates new protections for renters, including longer affordability terms of up to 99 years, as well as housing replacement requirements and occupancy protections.

The Citywide Adaptive Reuse Ordinance, which will create a by-right approval process for the conversion of commercial buildings that are at least 15 years old into housing, as well as a discretionary process for buildings between 5 and 15 years old.

The vote by the Council directs the City Attorney to draft a final ordinance to effectuate the housing element rezoning program. The City of Los Angeles must adopt those final ordinance by mid-February in order to maintain compliance with its state-approved housing element. Failure to meet that deadline could have consequences, including the so-called "Builder's Remedy."

As reported by the Los Angeles Times, a push by housing advocates and Councilmember Nithya Raman to extend the housing incentive program to incorporate the single-family zones were shot down on a 10-5 vote. A recent study by UCLA researchers found that the new regulations would likely generate just 30 percent of the more than 250,000 homes planned by the housing element without including single-family areas. Single-family zones make up more than 70 percent of the city's residential-zoned land.

Another report released this week by the Western States Regional Council of Carpenters notes that the city's own feasibility study, conducted by AECOM, also concluded that the incentives offered by the new ordinances were not robust enough to meaningfully increase housing production in light over other headwinds such as increased costs and the Measure ULA transfer tax. Subsequent analysis by RCLCO determined that new developments were feasible on just 7.2 percent of opportunity corridor sites, many of which would not be redeveloped due to other constraints or existing buildings.

Likewise, AECOM's study found that the mixed-income incentive program will likely result in developers opting to build extremely low-income housing in lieu of low-income or very low-income units, as has been the case with projects using the Transit Oriented Communities incentives. Although low- or very low-income units generate more revenue than extremely low-income units, incentive programs require fewer extremely low-income units to achieve the same type of development incentives. This leaves a larger number of unrestricted units that can be rented at market rate, making an extremely low-income set-aside the more profitable alternative over the lifespan of a project.

At the same meeting, city officials also voted to approve a spending plan for revenue collected under the controversial Measure ULA tax - popularly known as the "mansion tax." The tax, which applies to sales valued at $5 million or more, has generated approximately $480 million to date. The city's plan allocates $158 million in funding for fiscal year 2024-2025, the bulk of which will go toward the construction, renovation, and preservation of affordable housing.

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