Introduction to LA’s Affordable Incentive
A 1920s duplex in Arlington Heights is poised to become a fully affordable housing development.
Grace Kwok of Crane Canyon filed an application to build a five-story, 52-unit residential building on the site, at 2100 South Crenshaw Boulevard in Arlington Heights, Urbanize Los Angeles reported.
Background of the Project
The latest proposal builds on a 2022 application from Kwok seeking to redevelop the parcel into a five-story building with 17 units. The project aimed to tap Transit Oriented Communities development incentives to build a larger structure than what zoning allows. In exchange, the development would’ve designated three apartments for affordable housing.
New Developments and Incentives
Now the developer is going all in on affordable housing by using Mayor Karen Bass’ Executive Directive 1, which streamlines and expedites applications for multifamily proposals that seek to build 100 percent affordable housing projects.
The Crenshaw Boulevard building is being designed by PDS Studio. It’s near a construction site for a four-story, 31-unit apartment building with ground-floor retail at the northeast corner of Washington Boulevard and Norton Avenue.
Impact of ED1 on Multifamily Construction
ED1 has increasingly become the go-to conduit for multifamily construction in Los Angeles as developers lean away from market-rate housing construction.
The ordinance was enacted in late 2022, and as of this August, developers had submitted proposals for 35,000 ED1-backed units and secured approvals for about 29,000. That dwarfs the number of affordable housing submissions from 2020 to 2022 as well as the 17,556 total housing units approved in L.A. during the last fiscal year.
Market Trends and Challenges
Market-rate housing construction “has been essentially canceled at this point,” Chris Aiello, founding partner at Six Peak Capital, told CoStar. “Virtually no land makes sense from an investment perspective to build market rate.”
While developers might be doubling down on fully affordable projects, Los Angeles is still behind on its housing element. The city must permit 456,643 new units by 2029; of those, 184,721 must be set aside for affordable housing.
Read More
Read more
LA developers go all in on affordable housing amid cost-cutting ED1
Developer plans 17 apartments on site of Arlington Heights triplex
ED1 projects multiply in LA as developers question the math
Conclusion
The shift towards affordable housing in Los Angeles, facilitated by incentives like ED1, marks a significant change in the city’s approach to addressing its housing shortage. As more developers opt for fully affordable projects, the city moves closer to meeting its housing goals, albeit with challenges and uncertainties regarding the long-term feasibility and impact of such initiatives.
FAQs
Q: What is ED1, and how does it impact housing development in Los Angeles?
A: ED1, or Executive Directive 1, is an initiative by Mayor Karen Bass that streamlines and expedites applications for multifamily proposals seeking to build 100 percent affordable housing projects, making it more attractive for developers to focus on affordable housing.
Q: How many units must Los Angeles permit by 2029, and how many of those must be affordable?
A: Los Angeles must permit 456,643 new units by 2029, with 184,721 of those units set aside for affordable housing.
Q: What trend is observed in market-rate housing construction in Los Angeles?
A: Market-rate housing construction has significantly decreased, with developers finding it less viable due to investment perspectives, leading to a focus on affordable housing projects instead.
