The Rough Road to Building Housing in L.A.
As officials across California grapple with a growing affordable housing crisis, real estate brokers and executives say one of the largest impediments to addressing the problem is the California Environmental Quality Act, or CEQA.
The CEQA statute, which was enacted in 1970 after a federal environmental law, requires local and state agencies to determine what environmental impacts a project will have and then work to mitigate them. While the act has helped California achieve its reputation as an eco-conscious state, it is often employed by opponents of development who file lawsuits alleging projects violate portions of the act as a tool to stall or halt them entirely. Today, the stat
e of California is 3.4 million units short of producing needed housing, as measured from 2000 to 2015 by the Washington, D.C.-based Up for Growth National Coalition, a nonprofit that focuses on researching the housing affordability crisis nationwide.
Clyde Holland, chief executive and chairman of Vancouver, Washington-based real estate company Holland Partner Group, who is also chairman of the board of Up for Growth, blamed, in part, a vocal contingency that includes wealthy residents who do not want affordable housing, or in some cases even market-rate rental units, in their communities – often referred to as NIMBY, or "Not in My Back Yard."
"That’s $20 billion of [property tax] revenue that the state of California is losing because of the under investment in housing, and it’s exclusively nailed down to people who don’t want those people living in their neighborhood," he said at last week’s 2018 Mayoral Housing, Transportation and Jobs Summit at the UCLA Meyer and Renee Luskin Conference Center. "It’s wrong."
Many developers lament how easy it is for people to stop projects by exploiting the act. To file a CEQA lawsuit can cost as little as $50, potentially stopping a $100 million project, according to Holland and Up for Growth National Coalition. Holland and others argue CEQA litigation is impeding many affordable housing projects that officials agree are badly needed in Los Angeles and elsewhere.
"Just to think that we can have expedited CEQA litigation review for sports stadiums, and we can’t do it for housing, something’s wrong there," Brad Cox, senior managing director at real estate development firm Trammell Crow Company, said at the summit to a round of applause. Exceptions have been made for some sports facilities. Gov. Jerry Brown signed a bill last month to fast track the proposed Los Angeles Clippers basketball arena in Inglewood, California, and a ball park for the Oakland A's that would protect the two projects from lengthy litigation over environmental concerns.
Los Angeles Mayor Eric Garcetti pointed out the perceived abuse of CEQA needs to be addressed statewide.
"The sooner that we can cut red tape that’s standing in the way, the sooner the state can help us on CEQA abuse reform, which has to be a priority for our new governor and for this next legislature," Mayor Garcetti told the crowd of around 500 people during his keynote speech.
Part of the solution could be found in transit-oriented communities. Garcetti pointed out that rezoning has taken place around the new Metro Expo Line light rail, adding capacity for more than 6,000 new units of housing.
"Our transit-oriented developments, the biggest uncovered and unreported innovation in this city, is going gangbusters," Mayor Garcetti said.
Lew Horne, divisional president of Southern California, Arizona and Hawaii at Los Angeles-based brokerage firm CBRE, who spoke separately at the event, said that in order to solve the housing crisis and homelessness, minds have to be changed.
"We’ve got to change the narrative with the three major constituencies – elected officials, business community and change the common citizen’s attitude toward NIMBYism," Horne said at the summit. "We’ll pass the laws. We’ll pass the taxes. But all of sudden, [some people say] if it’s going to be built next door to me, I don’t want to see it. I want to solve this without seeing it. We’ve got to solve that."
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