Reframing L.A’s Strained Housing Affordability: An Explored Crisis Resulting from Faulty Zoning Practices

**Lack of Housing Supply in Los Angeles Pushes Prices Higher: A Challenging Market**
*Los Angeles Faces Limited New Construction and Restricted Zoning, Resulting in High Home Prices*

**The Challenging Real Estate Landscape in Los Angeles**
Real estate development in Los Angeles has proved to be a daunting task due to limited housing supply. A real estate developer, Artem Tepler, recounts that a project in Sherman Oaks, Los Angeles, took two decades to commence due to the difficulties associated with large-scale projects in the city. The scarcity of housing is a major factor driving up local house prices. Although new construction is heavily restricted, the demand for living in Los Angeles remains high.

**Inability to Build: A Major Cause of the Housing Problem**
Tepler, the co-founder and managing partner of Schon Tepler, believes that Los Angeles’ housing problem is primarily rooted in the city’s inability to build. Zoning regulations, such as the downzoning measures implemented in the 1970s and 1980s, have severely limited development, particularly for multifamily housing. Additionally, the California Environmental Quality Act (CEQA) has been used to block housing projects, exemplified by the blocking of a student housing project by a state appellate court based on potential environmental impact. Furthermore, the 10-year liability defect law in California discourages developers from engaging in large-scale projects due to the risk of lawsuits. These factors collectively contribute to the shortage of housing supply and the consequent increase in home prices.

**Driving Until You Qualify: An Indicator of the Housing Market**
To afford a home in prime areas of Los Angeles, one must be willing to drive far away and purchase a property priced between $600,000 and $700,000. Starter homes under $700,000 or $800,000 are virtually non-existent. In comparison, in Tepler’s home state of New Jersey, $700,000 can buy a 4,000 square-foot mansion. The high average home value in Los Angeles, $901,291, coupled with a median household income of $69,778, has created a “drive until you qualify market.” The further one drives from Downtown Los Angeles, the more affordable housing becomes. Commuting from areas like Riverside County, where the average home value is $568,515, is a necessary trade-off.

**The Impact of Restrictive Policies on Los Angeles**
The restrictive zoning, permitting, and development regulations have resulted in a housing crisis that some argue is self-imposed. Stan Oklobdzija, a professor of public policy, emphasizes that the refusal to build is exacerbating the housing problem in Los Angeles. Developers are cautious about undertaking projects due to the risk of lawsuits and the anti-growth sentiment prevalent in the city. The scarcity of housing has led to the exclusion of average individuals from residing in the city. To address the issue successfully, Tepler proposes upzoning, streamlining the approval process through by-right zoning codes, and reforming the CEQA.

**The Role of NIMBY-ism in Housing Crisis**
Tepler highlights the influence of homeowners, who make up a significant portion of the voters, on the decisions made by politicians. To appease their constituents, politicians are likely to resist upzoning or allowing for greater density housing. NIMBY-ism, where individuals support housing initiatives but oppose them in their own neighborhoods, further contributes to the restricted development and permitting rules in the country. Overcoming this challenge requires a collective effort to prioritize the need for more housing and mitigate the impact of NIMBY-ism.

The lack of housing supply in Los Angeles has led to soaring home prices, making it increasingly difficult for average individuals to own a home in desirable areas. The restrictive zoning regulations, CEQA, and liability defect laws have stifled new construction and discouraged developers from taking on large-scale projects. Addressing these challenges necessitates a shift in policy to promote upzoning, streamline the approval process, and prioritize the construction of more housing units. Overcoming NIMBY-ism and gaining public support for such initiatives will be crucial in resolving the housing crisis.

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