Jun 26, 2017, 4:55 PM ETPanel

Addressing the Urban Housing Crisis

By 2025, the UN projects 440 million urban households (1.6 billion people) globally will face inadequate, crowded, or substandard housing.
Closing the global housing gap requires an estimated $9 trillion to $11 trillion in new investment.
The U.S. faces a shortage of over 8.3 million housing units, with California requiring 180,000 new homes annually but currently building only 80,000.
In Silicon Valley, job growth slowed to under 17,000 additions in the last 12 months, attributed to housing unaffordability and worker retention issues.

Approval Timelines: In San Francisco, a city-backed 540-unit apartment project took nearly three years for planning and building approval, compared to eight months in Seattle.
Approval Ratios: Seattle has built one new housing unit for every three new jobs created; San Francisco has built only one unit for every 12 new jobs.
Fragmentation: California uniquely vests land use powers in a massive number of tiny jurisdictions, preventing effective regional planning compared to states like New York.
Cost Drivers: Construction costs for a five-story wood-frame affordable unit in San Francisco exceed $500,000 per unit in hard construction costs alone.
Prevailing Wage Impact: Mandatory prevailing wage requirements increase non-prevaling wage construction costs by 15% to 30%, with costs rising further in areas outside the coastal union strongholds.

Funding Volatility: Low-income housing tax credit scoring criteria and funding sources change annually, creating uncertainty for long-term project planning.
Waitlist Demand: Jamboree Housing currently houses 18,000 Californians but maintains a waiting list of approximately 100,000.
Income Mismatch: New job growth increasingly consists of lower-paying roles that cannot afford market-rate rents, exacerbating overcrowding.
Policy Volatility: Recent tax reforms reducing corporate tax rates have created uncertainty regarding incentives for investing in tax credit units.

Measure S (Los Angeles): A proposed two-year moratorium on large projects requiring discretionary approvals failed decisively, receiving less than 30% of the vote in a favorable, low-turnout election.
Bond Measures: Three to four counties passed housing bond measures with over 67% approval, including $570 million in Alameda County, $900 million in Santa Clara County, and $1.2 billion in Los Angeles City for homeless services.
Transit Support: The last transit measure in Los Angeles received over 71% of the vote, signaling voter alignment with housing and mobility reforms.
City Hall Dynamics: Los Angeles lacks a dedicated, non-elected spokesperson for housing policy at the departmental level, with decision-making power concentrated among 16 planning deputies and individual council members.

Value-Add Development: Increased focus on redeveloping and renovating existing assets rather than relying solely on new ground-up construction.
Modular Construction: Exploration of modular and prefab housing to reduce costs and construction time, with potential investment from tech giants like Google and Facebook to ensure scalability.
Master Planned Communities: Precedents set in Playa Vista, Mission Bay, and Transbay include 35% permanently affordable housing requirements as part of the zoning deal.
Policy Reforms: Adoption of adaptive reuse ordinances (effective in downtown LA) and relaxation of "granny flat" regulations to accelerate production.
Regional Models: California leaders are urged to study production success in Denver and Seattle, which prioritize transit-oriented development and faster approval processes.
Ownership vs. Rental: A cultural shift toward accepting rental housing as a primary tenure type, mirroring the 40-50% ownership rates in Germany and Switzerland versus the U.S. average of 63%.

"Third Los Angeles" Concept: The city is transitioning from a post-war car-centric identity to a transit-oriented, multi-family focused model rooted in its pre-war streetcar history.
Wealth Inequality: Historical policies like the GI Bill and redlining created vast wealth disparities among homeowners, skewing political power toward existing homeowners and fueling opposition to new development.
Community Engagement: Successful affordable projects have been secured by engaging neighborhoods early to address specific concerns (e.g., housing the homeless in the local park rather than importing residents).
Labor Relations: Persistent tension exists between the real estate industry and community groups, with efforts underway to shift the narrative from "developer vs. resident" to a collaborative housing ecosystem.