Will This Time Be Any Different?
Last week Mayor Karen Bass issued her third executive directive to maximize use of city property for temporary and permanent housing.
Declaring that “I am making sure that the City of Los Angeles holds nothing back when it comes to bringing people inside and providing them with the support they need to stay inside for good,” Mayor Bass said. “To save lives, restore our neighborhoods and house Angelenos immediately, we must urgently prioritize underutilized existing city-owned property.”
This is welcome news, since so much has been written about this topic for a number of years now. The LA Times posted an Op-Ed by me in 2018: Why does so much city-owned land sit idle in Los Angeles? and I followed it up with a document that highlighted 25 city-owned parcels that sat vacant for more than a decade.
I spent sometime tonight looking up those parcels and it was great to see that some of the long promised projects have been successfully completed or are moving toward completion, providing homes to those Angelenos most in need.
Yet, some of the properties remain vacant, all these years later.
Eight years ago staff for the former Mayor’s Operations Innovation Team went through 58 separate excel spreadsheets, holding inadequate data on the City’s real estate assets and put together the most comprehensive data base in decades for city leaders evaluate. The former City Controller also used this information to create a public database that begun to share these findings with the public.
The big question is what will become of this new directive because most insiders and communities already know what city-owned property is not being utilized to its full potential. I have heard plenty of stories of residents who see long-term vacant city-owned properties in their neighborhoods and have called on elected officials to act, to no avail.
The road block, from my vantage point, is the fact that the City has refused to do what other major cities and large counties in the United States have done, centralized authority, or appointed a CEO of Real Estate, for its real estate portfolio to better execute a long-term strategic comprehensive vision around its assets. It makes sense, the City of LA owns more land in the region than anyone…8,000+ parcels.
For now one of the main choking points is linked to this part of the Executive Directive.
Within 20 days of this order the City Administrative Officer’s (CAO) Asset Management and Development Services (AMDS) shall identify and deliver to the Mayor and the Chief of Housing and Homeless Solutions a list of all City-owned property within the control of any City department or bureau, including rights of way, that are vacant, surplus, or underutilized.
AMDS has been around for more than seven years and consists of one or two city analysts (from what I have seen) who are known to go beyond their level of expertise, telling city councilmembers and affordable housing developers who have walked certain properties and see opportunity for development, that their plans are not viable.
Asking the same people for the same information will do what?
The fact of the matter is that the City’s management, operations and maintenance of its assets is way out of sync with industry best practices.
Today is a great opportunity for the Mayor to appoint a newly created CEO of the City of LA’s Real Estate Portfolio tasked with the develop a comprehensive strategic asset management plan for all of the city-owned assets.
This effort would mitigate current costs and drive more revenue to the City budget, helping the City advance a more inclusive economic and community developmentstrategy, that includes the building of more affordable housing units, parks and mixed-use structures, to name a few.
And it would help the City skillfully manage supply and demand and maximize long-term revenue, for itself and the public good.
It would also allow the City to do two other important things…a post-covid workplace analysis that shows where the City could reduce its footprint due to remote workers and secondly, spark a conversation on which City departments could possibly relocate some of their staff from the civic center to locations within the communities they serve. LADWP would be a great test case for this new economic development initiative. Bringing city services and jobs into communities long overlooked.
Lastly, this new structure would better facilitate much needed interaction between City Hall and the private sector, non-profit sector, and the philanthropic community to help the City move towards utilizing real estate data analytics to derive insights and empower the City to make faster and more informed real estate decisions.
As I have always said, we do not lack for good ideas, it is the City’s lack of capacity and culture that is impeding progress.
The report Scaling Up Equitable Housing on Public Land, showed that in 2016, HCIDLA created a Land Development Unit to build affordable housing on land transferred from the former redevelopment agency.
The team worked closely with the City Administrator’s Office, the City Attorney, the Chief Legislative Analyst, the Mayor and Council Offices to expand development opportunities and streamline the housing development on public land.
In five years, HCIDLA’s Land Development Unit negotiated development agreements on 36 sites, placing more than 1,800 units into the City’s affordable housing in the development pipeline.
Despite these successes, this system cannot be scaled to meet the need. There is no strategy to the land selection process. The land disposition rules are overly complicated and the approvals process is cumbersome—it takes five trips to City Council to go from site selection to project development.
There is no funding for infrastructure, yet many public sites have built-in costs, such as replacement parking, contaminated soil and obsolete buildings with asbestos that need to be removed.
These problems often cost more than the value of the land, so the projects get stalled out looking for subsidies. Tax Credits and funding programs are highly competitive and not guaranteed.
So, after jumping over numerous administrative, logistical and funding hurdles, we typically end up with a 49-unit project that took seven years to complete and costs close to $600,000 per unit. If we keep doing public land development this way, we will fail to produce affordable housing at the necessary scale.
City Hall should embrace the recommendations of this report to accelerate the development of at least 10,000 new housing units on public land, providing Angelenos most in need a home sooner than later.