City Finds Flaws in Trading Density for Affordable Housing

The issue of developers including affordable housing units in their projects in exchange for what some local residents feel are oversized, out-of-character-with-the-area luxury condos and apartments, has been front and center in the news recently as the city grapples with what it calls its “affordable housing crisis.”

The city’s 2008-enacted Density Bonus Program was created to incentivize developers to include low and moderate income housing units in their market-rate projects in exchange for the city relaxing zoning codes.

But according Los Angeles City Controller Ron Galperin, the city is not only lagging in reaching its goal to establish 100,000 new units of affordable housing by 2021, but has also encountered significant difficulty preventing program violations and ensuring low and moderate income units are being properly set aside.

In an audit titled Income-Restricted Affordable Housing Units in Los Angeles: A Review of the City’s Density Bonus Program and Overall Oversight, Galperin analyzed the city’s program between 2008 and 2014. According to the report, both landlords and tenants were found to have violated the affordable housing program’s terms.

In 1,482 of the units studied, or 5.2%, landlords charged higher rents to tenants than allowed, while 464 units had tenants whose income exceeded the program’s guidelines—in more than 2/3 of those cases, incomes exceeded the maximum by $5,000, while one particular case revealed an income excess of $149,000.

The report also indicated the city’s Housing and Community Investment Dept. (HCID), which oversees the program, admitted that it had “failed to verify tenant income in 1,056 units (or 3.7% of all affordable units) before tenants moved in.

“Better oversight tools are needed,” the report concluded, regarding these violations.

According to the report, while 21% of new multi-family projects of five units or more utilized some aspect of the program—resulting in 4,463 units citywide designated as affordable—only 329 were actually added to market-rate projects, while the other 4,134 would have been built as affordable units regardless.

“The data highlights,” the report read, “the modest impact the density bonus program had on creating affordable housing in market rate projects.”

Galperin’s audit also suggested the city’s program incentives “may not be of enough value for market-rate developers and that the cumbersome process serves as a further disincentive.”

According to a Ledger analysis of city data, Los Feliz, Silver Lake, Echo Park have little affordable housing when compared to other parts of the city.

The data shows there are just over 550 units of affordable housing in Los Feliz, 269 in Silver Lake and only 87 in Echo Park. Of those totals, the data indicate only 15% were created by the city’s density bonus program.

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