Related California CEO Bill Witte on how LA developers should navigate development-curbing proposals

Related California CEO Bill Witte and a photo of the DTLA skyline by Hunter Kerhart
Related California CEO Bill Witte and a photo of the DTLA skyline by Hunter Kerhart

Updated, July 22nd, 2016, 12:33 p.m.: It’s an awkward time to be a developer in Los Angeles, as proposals are planned for the next two ballots that could slow most building to a halt.

There’s the Neighborhood Integrity Initiative, which seeks a two-year moratorium on developments that require zoning changes associated with density, and is headed to the ballot in 2017. There’s also the Build Better L.A. Initiative, which would require that any development seeking a zoning change have a percentage (up to roughly 20 percent) of affordable units and pay local workers prevailing wages. That one goes to voters this November.

In the meantime, officials at the city and state level are discussing measures to address the region’s affordable housing shortage.

Related California CEO Bill Witte, speaking at Bisnow’s annual multifamily conference at Downtown’s Omni Hotel on Wednesday, warned the development community that it does not have much time to respond to the flurry of proposals.

“Taken individually, you can see where all these come from; Taken collectively, we’ve got a serious problem,” said Witte, who is also chairman of the Related Companies’ California wing, which builds both affordable and luxury housing. “In L.A., we basically have between now and the end of the year to come up with a response.”

Read on for Witte’s advice to developers about navigating what he called “ballot box planning.”

Don’t go to the mattresses, talk to the community

Witte warned the audience against the “typical default response from a developer” of trying to get existing projects grandfathered in sans restrictions — and waiting until the next cycle if it’s not possible. He also suggested avoiding the urge to rage against the machine.

“[Developers] just go to the mattresses, to borrow from Mario Puzo’s phrase, and just fight these things, [saying], ‘This is un-American, this is Socialistic, etc.,’” Witte said. “This is not going away, folks…so we all need to get involved.”

Instead of railing against it internally, he encouraged community discussions.

“I think it behooves all of us to really kind of step back from our entitlement and our financing and try to band together, to have neighborhood discussions, to try to resolve these matters,” Witte said.

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Too often, he said, developers stay out of the discussion and only talk to the community when they are in the neighborhood input phase of a proposal.

“We need to say to the Neighborhood Integrity Initiative people, where do you plan on accommodating these people [that need housing], other than not in your neighborhood?” he said. “These conversations, believe it or not, rarely happen. Oh, yes, when we’re doing individual projects, one by one, we talk to communities and we think we’re pretty good at that. But [these proposals are] going to preempt everything you’re doing on a one-off basis.”

Talk to elected officials

Witte urged developers to speak to their elected representatives.

“[Those discussions] can take the wind out of the sales of those who would say, ‘Maybe we agree that this [isn’t] best either but nobody is doing anything and I don’t see it yet,’ he said. “I think it goes beyond just being in our self interest, which it absolutely is. I think it’s all part of our civic duty.”

He also encouraged developers to speak out in support of updated and more regional community plans that prevent the confusion that occurs when adjacent areas have different rules — even if such sweeping reforms are pie in the sky.

Don’t make yourself the scapegoat of overdevelopment

“If something is really out of context —  and I can name you three or four projects within the City of Los Angeles right now that will become the poster child for the Neighborhood Integrity Initiative — it probably isn’t right,” Witte said.

He encouraged developers to accept that there are certain areas that are protected from dense development, and where it is ill-advised to try to build something out of scale.

Affordable housing and community benefits should be a major consideration when planning, and in discussions with the community, he said.
“It could pass,” he said of the Neighborhood Integrity Initiative.

Correction: This story has been updated to reflect that the Build Better L.A. Initiative would require that a portion of projects requesting zoning changes be affordable.