LA Councilman David Ryu wants less power for developers and for himself

Last month, Councilman David Ryu introduced two bills — with fellow Councilman Mike Bonin — that both could help and hurt real estate developers in Los Angeles. The 44-year-old councilman who took office in 2015 proposed a measure that creates an incentives package to encourage developers to build middle-income housing. It’s similar to existing incentives packages for low-income housing. The other bill would increase tenant relocation fees for developers who evict rent-regulated tenants under the state’s Ellis Act, which allows landlords to deregulate units.

Ryu’s district — which includes Sherman Oaks, the Hollywood Hills and Los Feliz — is an economically diverse slice of the city. It is undergoing significant change driven in large part by numerous real estate projects that have gone up over the last few years and that are now in the works.

Ryu has made a name for himself by pushing for government transparency, particularly when it comes to campaign finance reform, and is adamant about the need to bring developers and locals together early in the development process. He says that has reduced conflict and led to better projects in his district.

Ryu also sponsors a proposal to ban developers and their associates from contributing to an elected officials’ future campaigns when the developer has a project under consideration in their district. The City Attorney is drawing up a draft ordinance that is expected to go to the Council this fall. He first introduced the measure — with Bonin and several other members — in early 2017. It has taken on greater urgency now amid continuing scrutiny of real estate’s role in city politics, and follows last fall’s FBI raid of City Council Jose Huizar amid pay-to-play allegations.

Ryu spoke with The Real Deal about his latest real estate-related initiatives, his role as a community mediator, and why he wants to reduce his and his colleagues’ power.

Can you explain why you want to create development incentives for middle-income and workforce housing?

We want to give developers more options…Overall, we’re going to meet and exceed our housing numbers, but we are exceedingly low in low-income affordable housing, and almost non-existent in moderate-income. We have not incentivized for that. That’s where government needs to step in. I am starting from scratch. I don’t want to tell you, this is what I want us to do for moderate income. This is an opportunity for reinventing planning.

What sort of incentives are you exploring?

We’re meeting with different business communities during this [City Council] recess to talk about the variations that could be, whether it’s even a voucher system, which would be completely different from what we’re talking about. But I’m open to all options. Maybe we use the linkage fees we collect to incentivize or augment projects, or again, is it a traditional density bonus? Is it something to do with parking? Everything should be on the table.

Developers say that government regulations and other requirements drive up costs and that luxury housing is all that pencils out. Is the Council exploring ways to reduce development costs so middle-income housing can be built without incentives?

For most developers, there are two important factors — one, time is money. Two, they want a set of parameters that is consistent. If you come to the city of L.A. and you try to build something or do something, you want a set of guidelines. You want to be assured, once I give you those guidelines, whether you could fit in that box or not. If you can’t fit in that box, you move on. You also have to be assured that when the next person comes and try to do the same thing, the city of L.A., or the councilmember, gives them the same exact parameters.

You’re talking about predictability in the development process.

Yes, certainty. It does not help [developers] when communities or folks are just suing them not to win but to delay them long enough to bankrupt them or make them give up. This is not helping anyone. What can we do as the city of L.A.? I get it. There’s so much red tape and so much bureaucracy. Even with the city of L.A., our own city tries to build housing for homeless, we get mired. We’re not above the law ourselves. We have to follow the same rules that a developer has to follow. We get stuck in our own bureaucracy, which is embarrassing. We need to figure out these systemic issues, including a lack of staff and lack of knowledge transfer.

Can you explain the reasoning behind your proposal to bar developers with business in front of the Council from donating to the campaigns of relevant elected officials?

The trust between the voters and residents, Angelenos, and City Hall, is almost non-existent. The relationship between neighborhoods and developers are antagonistic. How do you fix that? The number one concern is the perception — real or false — that every politician is in special interests or this particular developer’s pockets. That is not true. Let’s break that off. So we’re not going to take any money.

Lobbyists have told The Real Deal that a ban would just steer money toward independent expenditure groups that can donate as much money to a candidate as they want, as opposed to the $800 personal limit that your ordinance would ban. That appears to be a serious issue.

Agreed. And we can’t control that, its federal. But what we can control is [campaign contributions] and behested payments. I’m lowering that threshold from $5,000 to $1,000 [for maximum behested payments] now, and saying if you have a project before the city council, before me, where I’m going to vote on, then I can’t behest — I can’t ask you to donate to the YMCA or some other outside group.

Can you talk about some of the limitations you feel as an elected official, addressing issues like affordable housing and homelessness? Voters get frustrated. They feel there’s inaction.

I believe in preventive care, being proactive than reactive. Unfortunately, many times, the only time we could get anything done is when we’re reactive — when it hits breaking point levels. I’ve been working on this for over a decade and we’ve been trying to warn everybody, ‘this is coming, this is coming.’ But no one wanted to do anything. At least now this is the first time where all the local jurisdictions, in particular the city, the county, and the state, are partnering to try to tackle this head on.

There’s a lot of development in your district [Hollywood, Studio City, Los Feliz]. How do you keep a handle on all the projects that are being developed?

I always ask developers to go and talk to the community. Approach them as soon as possible. Get their feedback, get their input. That way we can save a lot of people a long time and a lot of headaches. And as a matter of fact, it works. People say “no, there’s obstinate, they won’t move, they won’t budge.” Not necessarily true.

That’s where the job of the elected official is. I try to bring the two parties together. Guess what happens? Almost all the new projects in my district, zero lawsuits. Pretty much majority of the community supports it and they get a lot of changes that they like.

That touches on another question I want to ask you. What is one thing you’d say to the developers who read The Real Deal?

I’ve been saying I want to work on planning reform…The one thing, if I could only do one thing, it’s having community input early. Getting them involved early. I don’t just mean having a meeting for the sake of a meeting, or sending out letters. No. I mean truly engaging.

What else would you like to change while you’re in office?

I truly believe a portion of planning reform is going to have to be basically reducing my power. Reducing discretion. Too much discretion. When I came into office, spot zoning was hated. However, if I spot zone something and made it into a park or a community center, the neighborhoods would be applauding me up and down the street.

So spot zoning is not the problem. The person who’s doing the spot zoning is the problem. Too much discretion, again, is based on relationships, not the merits of the project.