How to get more affordable apartments in LA


In my opinion, the only way to bring LA rents down is to get more apartments onto the market. Given the city’s byzantine entitlement process, the fastest way to get apartments onto the market is through the adaptive reuse ordinance, which allows developers to convert old buildings downtown (and a few other places) into apartments without going through the entitlement process.

This is precisely what’s going on: There are tons of adaptive reuse projects getting started right now.

The problem is that the units coming online are not really going to be affordable, because they’re going to be too big, and therefore too expensive.

Here’s the summary of the unit size language in the Adaptive Re-use Handbook:

“The minimum size for all new dwelling units or live/work units is 450 square feet. The¬†minimum average size for all of the units in an adaptive reuse project is 750 square feet.”

The rule above only applies to buildings where the developer is using the density bonus allowed by the ordinance to maximize the number of units he can build in a given building. But almost every developer downtown is using the density bonus.

Think about how the above rule works: You can make units as small as 450 sq ft, but your average unit size needs to be 750 sq ft. So, if you want to make one 450 sq ft unit, you need to compensate by making one 1050 sq ft unit or two 600 sq ft units. Can you see the problem?

What the city needs now is a ton of small apartments which are affordable to individuals and couples. The 750 sq ft average rule basically means you can’t deliver a building full of small studio lofts, which is exactly what the market is demanding. If the average size rule were waved by removing that one sentence, developers would create whole buildings full of 450 sq ft studios, which would rent for $1000-1200 and be very profitable.

Problem solved, and all by removing one badly conceived sentence.