Los Angeles Business Journal

Housing Moratorium Initiative Could Cost City 12,000 Jobs a Year and Thousands of Housing Units

By Howard Fine Thursday, December 15, 2016

If Measure S, the so-called “Neighborhood Integrity Initiative” establishing a two-year moratorium and other limits on major housing projects in Los Angeles were to pass in March, it would cost the city 12,000 jobs a year and deprive the city of thousands of additional housing units, according to a study released Thursday from initiative opponents.

Measure S was placed on the ballot by a coalition of neighborhood activists with financing from the AIDS Healthcare Foundation in Hollywood. The foundation opposes developer Crescent Heights’ Palladium towers project planned next door. It would place a two-year moratorium on most projects requiring a zoning plan amendment and, after the moratorium ends, make the approval process for these projects more difficult. It would also require the city to update its general zoning plans.

The study, conducted by Los Angeles economic consulting firm Beacon Economics for the labor, business and nonprofit coalition that’s opposing the measure, primarily looks at the impact of the two-year moratorium. Study authors Christopher Thornberg and Robert Kleinhenz say the moratorium would result in a loss of 12,000 jobs a year, or 24,000 jobs over the two years, about 15 percent of the total number of construction jobs in the city.

The loss of construction jobs would in turn result in $642 million in lost wages and $1.9 billion in lost economic output. And with projects on hold or abandoned, the city would forego over $70 million a year in sales, property, hotel bed and other taxes.

“If adopted, Measure S will have the effect of halting construction, stifling the economic activity as a result of that construction, cost Los Angeles millions in tax revenue and make an already dire housing situation much worse,” authors Thornberg and Kleinhenz said in the study.

Measure S proponents said the study was bought and paid for by developers and business interests opposed to the measure and therefore could not be considered objective.

“This is a study manufactured by Beacon Economics, the firm that is being paid to fight this measure, and it’s full of ‘sky is falling’ claims,” said Measure S Campaign Director Jill Stewart. “We expect that if the measure passes, there will be a healthier economy. Good planning leads to vibrant neighborhoods.”

Public policy and energy reporter Howard Fine can be reached at hfine@labusinessjournal.com. Follow him on Twitter @howardafine.