Costa Hawkins and Voting NO on Prop 10

Activists disappointed after an Assembly committee blocked a bill to
lift statewide restrictions on types rent control demonstrate in
California’s Capitol on Thursday. (Katy Murphy - Bay Area News Group)
source: mercury news

Costa Hawkins and Voting NO on Prop 10

In 1995, California passed a statute allowing landlords to charge “market” rent whenever a new tenant enters a lease. The Costa Hawkins Rental Housing Act permits this rent alteration, just as long as written notice is properly given. Though the Rent Adjustment Commission hasn’t reported more than 5% of rent increase since 1985, rent prices would still increase anywhere from 3-5%. This includes potential increase in single-family homes, most condominiums and multi-family rental units that were built after 1995.

Los Angeles Housing Crisis

A large amount of Los Angeles residents spend more than half of their income on rent. With housing rates this extreme, it’s now evident why one in four LA residents are living in poverty. Unfortunately, the Act only increases the risk in Los Angeles’ current housing crisis. Though the need for affordable housing is apparent, the Act severely impacted a 2009 court decision,which would’ve required developers to include affordable housing units in their resident projects.

Restoring Affordable Housing

The Court responded by stating Los Angeles’ violated the Costa Hawkins Act by allowing lower rent rates for newly constructed units. In contrast of this, Governor Jerry Brown (thankfully) signed a bill that restored the permission to pursue building affordable units in new rental developments.

Pursuing Low-Income Residential Projects

While the demand for affordable housing continues to grow, new housing developments are increasing at an even slower pace. This sufficient lack leaves California’s rate of new housing projects short of demand. Even for homeowners who are subleasing even a single room in their residence, they may still be subject to increases in their rent. Though repealing an act will take time to display results, it all starts with a “no.”

What is Prop 10?

Prop 10 is a statute that was presented to California courts when determining whether local governments should step into place for adopting rent control ordinances. The proposition would repeal the Costa Hawkins Act, reversing many of its requirements. In addition, the proposition includes flaws such as not increase housing for affordable spending, will not force local communities to build affordable housing and finally, the prop will not provide any instant relief for those facing higher housing rates.

“NO” on Prop. 10

When getting your ballot in the mail, it’s important to understand what each prop represents before voting. For example, prop 10 provide doesn’t provide protection for renters, seniors, veterans, the disabled, nor does the prop provide affordable housing or rent rollbacks, either. Overall, renters will immediately feel the effects of prop 10’s harmful output. Having such in effect will cause landlords to convert their apartments into potential condominiums, increasing rent prices and vacation opportunities. This will push many of California’s renters in a state of “where do I go now?” To better our community, we can stop this reduction of affordable and middle-class housing by voting “no” on prop 10.

Original Blog by Jesamine D.


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A Beginner’s Guide to TOC

TOC

TOC Apartments in North Santa Fe, by Community Housing Works (CHW)

Discussing Transit-Oriented Communities (TOC)

Living in Los Angeles has its ups and downs. For one, anyone who is a Los Angeles native knows all about the frequent congestion in traffic. When sitting at a complete standstill on the freeway, we’ve all often thought, “where did all these people come from?” Moreover, “where do all these people live?” As California keeps growing, the need for proper housing accommodations keeps rising. Given this urgency, the city of Los Angeles has passed an ordinance to benefit residential developers in an effort to provide more housing for all.

Intent

Overall, the ordinance gives developers the opportunity to create a much larger-scale project than what is normally allowed. The underlying hope is to build more affordable housing in close proximity to major transit stops so that there will be a lesser need for Angelinos to rely on their cars for traversing the city. This opportunity should push investors to build these larger projects, all while benefiting the community’s current affordable housing need. Every lot within a TOC Affordable Housing Incentive Area will be determined by the shortest distance between any point on the lot and the major transit stop. In addition, the developer has a responsibility to provide documentation which states their desired project is within a TOC-permitted area. Development of the residency will take effect once the city has given its approval.

TOC Incentive Requirements

In order to completely satisfy Los Angeles’ ordinance requirements, several qualifying factors must be met. These are the nuts and bolts of getting a TOC project approved by the city:

1. On-Site Affordable Housing – Every tier will have On-Site Restricted Affordable Housing, as determined by the Housing Development. The minimum number of affordable units will be determined by the overall number of units in the final project. These On-Site Affordable Housing Units will be available at the below percentage rates:

Tier 1

    1. : 8% of these units should be available to those of the Extremely Low Income (ELI) households, or 11% of these units for Very Low-Income households, or 20% of the units for Lower Income households.

Tier 2

    1. : 9% for the Extremely Low-Income households, or 12% for Very Low-Income households, or 21% for Low Income households.

Tier 3

    1. : 10% for the Extremely Low-Income households, 14% for Very Low-Income households, or 23% for Lower-Income households; and

Tier 4

    : 11% for Extremely Low-Income Households, 15% Very Low-Income households, or 25% for Lower-Income households.

2. One-Half Mile from Major Transit Stop – This is perhaps one of the most crucial elements when planning a development with TOC-supplied incentives. Each residential project must be within 2,640 square feet from a major transit stop. When referring to bus stops, such development must be within at least two major bus stops. This does not include bus stops along the same road, as it must be perpendicular.

TOC Tier, TOC Guidelines, TOC, TOC Los Angeles

TOC guidelines by City of Los Angeles

3. Housing Replacement – In order for the development to be effective, such must be able to fulfill the applicable housing replacement requirements set forth by the California Government Code Section 65915(c)(3). In addition, prior to obtaining the building permit, the Department of Housing and Community Investment must first verify you meet the affordable housing replacement needs.
4. Density and Development Bonus Restrictions – Under the California Government Code Section 65915, the housing development under TOC compliance is not permitted to receive other density or development bonuses. This includes restriction from any other State or local programs that typically provide such development incentives. Lastly, these restrictions apply to bonuses or incentives that would grant additional units through a General Plan Amendment, Zone Change, or Height District Change. Affordable housing development bonuses within a Transit Neighborhood Plan, Specific Plan, overlay district, or Community Plan Implementation Overlay (CPIO), will not be permitted to request nor obtain, either.

5. Base and Additional Incentives – Housing Developments involved with the TOC ordinance are able to receive Base Incentives, or “Base Units,” which are the maximum allowed density for its zoning. On-Site Restricted Affordable Housing Units may also be applicable to the affordable housing units in its section. For more detailed information on the allowable incentives, please refer to the city of Los Angeles’ TOC Guidelines.

6. Projects Adhering to Labor Standards – For projects that have accommodated the required labor standards, the grant of two additional incentives (or a total of five incentives) may be permitted.
7. 100% Affordable Housing Developments – An increase in tier will be permitted to Eligible Housing Development buildings that contain 100% On-Site Affordable Housing Units.

TOC Tiers

The incentives offered to developers increases dependant upon how close, or hor how far a parcel is from a particular type of transit. The specifics are detailed in the chart above. Closer proximity will put a project in a higher tier, thus allowing for the development of a larger, more dense structure. When exploring your options for a TOC project, it’s important to understand what tier specifications are available. In order for your development to build efficiently, it’s important to set your project in an R3 tier (at minimum). Though R4 tiers are preferred, establishing such in any Tier 4 may be nearly impossible. The higher the Tier the better. Tier 3’s may be of great benefit to developers, especially given this factor will allow a maximum of 0.5 spaces per unit, regardless of bedroom count.

There are two main base incentives that have the largest impact on the size and scope of a TOC project. They are an increase in the number of dwelling units (density), and and increase in the buildable square footage (floor area ratio, or, FAR). Once you break it down, it may look like this:

    1. Tier 1 – 50% increase in density / 40% increase in FAR
    1. Tier 2 – 60% increase in density / 45% increase in FAR
    1. Tier 3 – 70% increase in density / 50% increase in FAR
    Tier 4 – 80% increase in density / 55% increase in FAR

In-Lieu Fee

For developers to begin executing the TOC residency, they must build units off-site or on-site, obtain and preserve at-risk (affordable) properties, or pay an in-lieu fee. As stated in Measure JJJ, the in-lieu fee would be 1.1 multiplied by the number of units provided by the developer, then multiplied by the region’s “affordability gap.” The development’s number of bedrooms and other underlying factors must coincide with the in-lieu fees the project. Such in-lieu fees would consist of the following:

$43,695

    1. per studio unit

$46,350

    1. per one-bedroom unit

$51,313

    1. per two-bedroom unit

$56,965

    per three-bedroom unit

The above fees in-lieu pertain to 5% of units that are designated for extremely low-income and low-income households, thus granting the lower fee amount. In contrast, for projects that are being executed in regions where residential use was not previously permitted, the in-lieu fees are as follows:

$62,826

    1. per studio unit

$66,585

    1. per one-bedroom unit

$73,704

    1. per two-bedroom unit

$81,817

    per three-bedroom unit

Los Angeles Transit-Oriented Communities

Overall, investors and developers in Los Angeles should be aware of the city’s great incentive. Los Angeles itself is a city that keeps growing and growing. With the extreme housing need filling our community, it’s important developers consider a residential project that will not only benefit their development, but benefit the community, as well.

Original Blog by Jesamine D.

For any questions you may have, or for assistance in planning your TOC project, contact us immediately – we’re here to help.

New restrictions on Granny Flats in Los Angeles

Daniel Ramirez | Flickr

Daniel Ramirez | Flickr

 

California is facing a serious housing crisis and city officials are reforming laws to make it easier for secondary dwelling units, also known as ‘Granny Flats’, to be constructed and make illegal guest houses eligible for permitting. These secondary dwelling units can provide much more needed housing while providing homeowners with supplemental income. Read more

Housing For The Homeless

Curbed LA | Shutterstock

In 2016, Los Angeles voters approved a $1.2 billion bond towards housing for the city’s growing homeless population. Now, the Los Angeles Department of City Planning has proposed new guidelines to make the construction for housing the homeless and formerly homeless residents faster. Read more

City Officials Make Plans to Reevaluate Parking Minimums

Jaymantri | Pexels

Jaymantri | Pexels

As a multi-family and mixed use developer, getting the most units out of your project is your number one goal. Being able to fully maximize your space and increase income revenue is an important aspect to consider when developing your architectural plans. One of the sources of wasted space, especially for smaller developments, are parking minimums. Developers must now reserve space for parking cutting into potential unit space. Read more

Predicting the State of Real Estate in 2020

The Code Solution is pleased to feature another guest post from our friends at The Llenrock GroupThe following post was originally published on Llenrock Blog. 

With 2016 coming to an end, it’s time to start looking at what the future of real estate holds. Thankfully, PWC has done a lot of the work for us. In a recent report, PWC detailed what can be expected in the real estate market of 2020, with our own spin of course!

Read more

Neighborhood Integrity Initiative And Proposition JJJ Will Do More Harm Than Good If They Pass

Image courtesy of L.A. Times

It’s a two sided debate that continues to spark conversations and protests surrounding development in Los Angeles and its effect on rental costs, affordable housing, LA’s planning process, construction wages, and the like.

These are all important issues to tackle. However, opponents to these anti-development ballots have voiced concerns that they are not going to solve the issues proponents have set out to address. In fact, many opponents argue that these ballots would actually make it harder to develop affordable housing, which is already harder than it was in the past.

Read on to learn more about the ballots and their proposed effects on real estate development.

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5 Benefits of Augmented Reality in Retail and Industrial CRE

The Code Solution is excited to showcase another guest post from our friends at The Llenrock GroupThe following post was originally published on Llenrock Blog. 

Since the recent Pokemon Go phenomenon, everyone has been writing about the relationship between augmented reality and commercial real estate. We were recently interviewed by CoStar News on how we see augmented reality helping (and hurting) various sectors of commercial real estate. Since I’m such a nerd about studying the multi-faceted relationship between technology, society, and the CRE industry, why not reclaim our expertise in a top 5 post?

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Should your next building be smart?

When I first heard about automated homes, also known as smart homes, the Disney movie Smart House immediately came to mind. For those of you who have seen the movie and all its cheesiness, you will remember that it was about a boy who programmed their smart home to be a surrogate mother, and it didn’t go so well.

After 17 years, the technology that didn’t go so well for the family in Smart House, is gaining increased popularity with homeowners, renters, real estate developers, and landlords too. For this reason, I am here to tell you why smart buildings are awesome, and not at all scary.

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Multifamily: A Rise in Rents and Micro Apartments

The Code Solution is excited to announce our first guest post from our friends at The Llenrock Group! The following post was originally published on Llenrock Blog. 

If you’ve heard anything about housing trends, you know that multi-family developments are on the rise. And the American dream seems like just that – a dream. More residents are renting rather than buying. There’s also been a huge influx of “micro” apartments. What does that mean for you? If you’re in the market to rent (or buy), you’ll want to read on!

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