LA's affordable-housing fast-track packs development pipeline

"Developers are increasingly opting to build 100 percent affordable apartments as a way of getting projects through the approval pipeline faster, as entitlement timelines shrink from about a year for market-rate projects to 60 days for fully affordable endeavors, the Wall Street Journal reported. Since the city rolled out ED1 in late 2022, developers have filed plans for about 42,300 income-restricted units, with roughly 31,700, or 75 percent approved so far. That's more than double the city's affordable approvals in the three years before ED1."

"The directive allows applicants to bypass public hearings and council votes for projects restricted to tenants earning no more than 80 percent of area median income; in Los Angeles County, that's $84,850 for one person. Efforts like ED1 show that there's plenty of appetite to build nonluxury apartments by market-rate developers, said Jason Ward, co-director of the RAND Center on Housing and Homelessness. You just have to create the circumstances to do that."

"Last year, five developers from across the country joined forces to create Passo, a Los Angeles-based entity designed to take advantage of ED1. So far, the venture has finished one project totaling 15 units, and it has more than 600 more units in construction and planning phases. Passo shaved months off the entitlement timeline and tens of thousands of dollars in fees by tapping ED1. ED1 is the only reason we came out here, Passo principal Daniel Glimcher said."

Executive Directive 1 lets applicants bypass public hearings and council votes for projects restricted to tenants earning no more than 80 percent of area median income, shortening entitlement timelines to about 60 days for fully affordable projects compared with about a year for market-rate projects. Since late 2022, developers filed plans for about 42,300 income-restricted units, with roughly 31,700 (75 percent) approved, more than double affordable approvals from the prior three years. Developers formed ventures like Passo to take advantage of ED1, finishing one 15-unit project and advancing over 600 units in construction and planning. Higher interest rates, slower lending, and cuts to Section 8 subsidies pose financing challenges, and Measure ULA remains controversial.

Read at therealdeal.com