Los Angeles’ affordable housing future won’t be found in a skyline crowded with tall towers, but in duplexes, bungalow courts, and accessory dwelling units, according to a new report.
“There is space available inside Los Angeles to add 1 million units within the next decade—without having to turn every corner into a high-rise,” says Steven Kling, who co-led a new report from economic researchers at the McKinsey Global Institute on affordable housing in LA.
The report describes a “path forward” to a more affordable Los Angeles that includes adding more apartment complexes near transit stops, building more micro units and bungalow courts, adding more ADUs to single-family homes, and converting single-family homes on multifamily-zoned parcels to duplexes and triplexes.
These types of units cost significantly less to build so owners wouldn’t have to charge as much to rent them out. But to truly make them a viable option, the city would need to approve plans quicker and relax open space and parking requirements.
Faster Permitting Process Needed
The city also needs to ease up on its time-consuming permitting process, clean up its confusing and complex zoning codes, and expand incentive and subsidy programs for developers, the report concludes.
The main reason why developers build tall,expensive apartments is because it doesn’t pencil out otherwise—unless they can obtain public subsidies or tap incentive programs, such as LA’s largely successful transit-oriented communities program.
For-profit developers need to charge about $3,000 for a standard, 970-square-foot unit to achieve “sufficient returns,” according to the report, but a $3,000-unit is affordable only to households who make make 175 percent or more of the area’s median income.
The report underscores how wide the gap has grown between how much people earn and how much they pay for rent in the city of Los Angeles. And that nearly 1 million households, or 70 percent of all households, can’t afford market-rate housing in their neighborhoods.