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Thursday, Aug 11, 2022
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Measure S Fallout Continues to Develop in City

Measure S, the Neighborhood Integrity Initiative, was voted down last week by nearly 70 percent of the handful of L.A. city voters who showed up at the polls. While the initiative to halt discretionary development for two years while the city overhauls its planning code was rejected, the soul-searching resulting from the debate is expected to continue.

Foes and friends of Measure S agree the city needs to update its zoning and community plans to reflect current planning priorities, while making its relationships with developers – especially those seeking major planning variances – more transparent.

“We got hammered in the election, but we won the argument, which is an amazing thing,” said Jill Stewart, campaign manager for Measure S, which was sponsored by the Hollywood-based AIDS Healthcare Foundation. “Today it’s hard to find anyone who disagrees that City Hall is driven by undue developer influence.”

From new construction and housing development to city efforts to tackle a long-term growth plan, here are five of the biggest impacts to result from the campaign:

1. Calm After the Storm

L.A. planners were flooded with building applications before March as developers scrambled to get ahead of a potential moratorium under Measure S. Now applicants likely will resume a schedule dictated by typical market factors. “There may be a brief respite for the planning department, but in the end it’s the fundamentals of the economy and the imbalance of housing supply and demand that are driving the business decisions,” said land use attorney Dale Goldsmith, a partner at Armbruster Goldsmith and Delvac. But developer Howard Kozloff of Agora Partners said some companies may tamp down on construction plans as they grapple with the effects of Measure JJJ. That city initiative, passed in November, requires major residential projects that need zoning changes to include affordable housing and pay union-scale wages. “Even though it did not restrict development in the way Measure S was calling for, … JJJ still makes it really difficult,” Kozloff said. “Economically, when you raise the cost to build and you lower the potential revenue, that’s a bad combination.”

2. Affordable Housing On the Rise

Developers of affordable housing are eager to rev into action. With Measure S off the table, they can more easily proceed with the construction of 10,000 units of homeless housing, aided by a $1.2 billion bond passed by L.A. city voters in November. “The defeat of Measure S confirms that Angelenos want the affordable housing they voted for in November,” Rusty Hicks of the Los Angeles County Federation of Labor said in a statement. Although Measure S would have allowed fully affordable housing developments to be built during the two-year moratorium, any project requiring a General Plan amendment still would have been blocked. This was a key reason it was opposed by Mayor Eric Garcetti.

3. Land Value Stability

If Measure S had passed, increased scarcity would have driven up the value of entitled land. Unentitled land, meanwhile, would have sat unwanted by developers, plunging in value.

Market forces will be left to do their work now, likely leading to stability. Developers won’t necessarily back off from buying land that that requires entitlements, or fight over a handful of entitled parcels that would be easier to build on. “Land values are likely going to remain steady, and rents are apt to stay stable and even come down as development will occur,” said Lew Horne, president of CBRE’s Southern California and Hawaii division.

“You can’t sell land under uncertain circumstances, at any price,” he said. “This decision allows the momentum in Los Angeles to continue.”

4. Things Will Change…

The City Council voted unanimously this month to create an ordinance that will give city planners $13 million annually to update all 35 community plans every six years, beginning in 2024. The city will need to hire more than 75 people to stay on track with the laborious process. Only three community plans were updated in the last decade. The plan also requires developers to submit environmental impact reports through third-party consultants.

Stewart said Measure S backers will be watching closely. “Our next steps will involve holding City Hall’s feet to the fire and helping empower communities to fight backroom mega-development deals between wealthy developers and individual City Council members,” she said.

5. … And Lawsuits Will Continue

Even as the sun goes down over Measure S, AIDS Healthcare Foundation has lawsuits pending against two projects in Hollywood: a half-constructed Target Corp. store and a plan for two 28-story residential towers next to the Hollywood Palladium. Some Measure S backers are also suing the developers of Cumulus, a 30-story mixed-use project in West Adams. Lawsuits to halt development could continue to flare up while the city hammers out new planning guidelines. To Barbara Broide, a Westside Neighborhood Council board member, the courtroom is sometimes the only mechanism for community members to have a say. “If we can’t be heard, what do we have left?” she said. “We use it to try to create some leveling of the playing field.”

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