Rick Caruso Talks Redlining of LA to Development, Political Run

Los Angeles-based developer Caruso hasn’t built in its hometown for years–and that’s intentional.

Rick Caruso, who runs his namesake company, revealed that strategy on Thursday when he took the stage during Bloomberg’s Screentime conference held at the campus of Nya Studios in Hollywood. Caruso delivered a talk mainly to the Hollywood, media and tech crowd, but nevertheless focused on the city’s issues around affordable housing, taxes and post-wildfire rebuilding.

“As a company that takes great pride in being L.A. based, we no longer build within the city of Los Angeles because of the unpredictability, the cost of doing it [and] the multiple layers of bureaucracy you have to go through for approvals,” Caruso said on stage. “And I made that decision long before I ever ran for office [in 2022].”

The developer of retail centers, including Americana at Brand, The Grove, and Palisades Village, went on to attribute 40 percent of housing costs to regulations. That includes the permitting process, parking requirements for multifamily, energy efficiency and seismic standards and environmental impact reviews. Since 2023, developers can also tack Measure ULA, a city-specific tax on all property transactions starting at $5.3 million, on the other end of the deal, often making an eventual sale more difficult or less profitable.

“What people need to understand, what leadership needs to understand, is money is going to travel in directions that have the less friction to it, the less risk to it,” Caruso said. “And L.A. is redlined now, because of the fires, because of the homeless problem, because of the crime problem. Find a crane in L.A. In 10 years, the lowest amount of housing is now.”

Caruso delivered a roughly 20-minute talk on stage in which he walked the line between airing out issues in the city from the perspective of a developer and resident, to campaigning.

That would include what some have viewed as attacks on Los Angeles Mayor Karen Bass since January’s Palisades Fire. Wednesday’s release by the fire department of the after-action report for the blaze further fanned critiques around the wildfire response. The long-awaited assessment indicated a number of operational lapses, including communication issues, lack of adequate staffing and water supply problems.

“I didn’t go on the attack; I was honest,” Caruso said when asked about his statements made around the fire. “Some people think I’m attacking Karen Bass. I’m not attacking Karen Bass. I’m saying what the facts are and now we know it. It’s in black and white.”

Chatter has continued to mount since January on whether Caruso might make another run for Los Angeles mayor or perhaps a go at California governor. He has repeatedly stated publicly his intent to make a decision by the end of the summer.

With that deadline now passed, Caruso kicked the can further into the future and said he’ll decide “when I decide.”

“You know what I’m waiting for? I’m taking this very seriously,” he said at the conference before stating his priority is Steadfast LA and the rebuilding.

The nonprofit he launched in February has focused on public-private partnerships aimed at expediting rebuilding in Altadena, Pacific Palisades and Malibu. The group linked early on with prefab home builder and Airbnb spinoff Samara on a program that will give about 100 homes to fire survivors unable to rebuild their homes.

Caruso’s also been credited with pushing for the use of Archistar, an artificial intelligence-backed software that is now being used by the city of Los Angeles and Los Angeles County to fast-track permitting. Steadfast, LA Strong Sports and the city of L.A. also partnered to rebuild the Palisades Park and Recreation Center.

“I don’t want to be a candidate; I want to get this work done,” he said. “I’ve got time to be a candidate.”