The Los Angeles City Council has adopted two ordinances today that seek to address the region's ongoing affordable housing crisis.
The first, the so-called "Value Capture" ordinance, builds off of an initiative first introduced by 13th District Councilmember Mitch O'Farrell in 2014. It is billed as a way to "close the gap" in Measure JJJ, in which projects applications using a Conditional Use Permit or requests for height and area changes were not required to provide on-site affordable housing.
According to a statement from O'Farrell's office, any affordable units created as a result of the ordinance would be covenanted for a term of 55 years. Additionally, any replacement housing for existing rent-stabilized units would be required to result in a "net gain" of affordable housing.
The ordinance was approved today on a 14-1 vote, and is scheduled for a second reading next year.
At the same meeting, the Council also approved the Linkage Fee affordable housing ordinance, which its backers say will generate over $100 million in annual funding for affordable housing construction through a new fee on commercial and market-rate housing developers.
In a press release, 14th District Councilmember and Planning and Land Use Management Committee Chair Jose Huizar stated that “The City has long-needed its own funding source to ensure that our residents and families who have lived in Los Angeles all their lives, can continue to call the City that they love home. Our primary goal is to provide hundreds of millions of dollars to keep people in their homes and protect affordable housing covenants set to expire, as well as to build new affordable homes for workers and families. It’s been my honor to craft this policy along with my colleagues on the City’s Planning Committee, and I applaud the City Council, as well as the Coalition for a Just LA and Mayor Garcetti for their support.”
The Linkage Fee's backers, which includes many non-profit developers, argue that it is a critical move to provide a dedicated funding stream for affordable housing, and that similar ordinances are already in effect in most peer cities across the country.
Its opponents, including market-rate developers and various industry groups, contend that the additional fees are another barrier to development in Los Angeles, and that incidental costs will drive up rents in new construction.