Housing construction in LA is down, and developers blame Measure JJJ

The 3-year-old law requires developers to pay prevailing wages and include affordable units in some projects
May 22, 2019 11:00AM

LAplus' Mark Vallianatos

LAplus’ Mark Vallianatos

Housing production in Los Angeles has slowed since voters passed a measure three years ago requiring that some developers boost worker wages and set aside a portion of units as affordable.

Passed in 2016, Measure JJJ mandates that developers who receive a requested change in zoning pay prevailing wages to their workers, and set aside the affordable housing component. But a new study found that since Measure JJJ was enacted, developers have almost completely stopped applying for zoning changes, according to Urbanize.

Between 2014 and 2016, developers applied for around 30,000 units with zoning changes and general plan amendments. Since then, only a handful of projects have been proposed with entitlements under the program, and only one has been approved.

The study was conducted by members of the real estate development program at the University of California Berkeley and LAplus, which promotes housing production with a generally pro-development philosophy.

Developers told researchers that the prevailing wage requirement is the main reason they have stayed away from the Measure JJJ projects. The requirement increases costs by 30 percent on low-rise developments, and 20 percent for large developments.

Measure JJJ also established the Transit Oriented Communities program, which provides density bonuses and other incentives for projects that include affordable units near transportation hubs. Around 10,000 units have been proposed through the program went into effect in late 2017.

The study found the TOC program is the most popular construction-based incentive program in L.A., but developers said it is only viable if they can achieve rents between $4 and $5 per square foot. [Urbanize]Dennis Lynch