Developers Say It Is Time For CRE To Get Serious About LA's Homeless Issues

The homeless issue in Los Angeles has long been a crisis, but executives are now making a call for action.

Housing developers say for downtown Los Angeles to truly thrive, it is time for the commercial real estate industry to take the city's homeless issue seriously and do something about it.

It is time for all of us to step up, Mack Real Estate Development Chairman Paul Keller said.

"The only way we're going to solve this, because it involves the state, county and the city, is that the vast majority of us — in some way or another — get involved," Keller said at Bisnow's Future of Downtown Los Angeles event at the Wedbush Center in downtown.

"Whether that is putting pressure on our elected officials, other groups or going out and joining a nonprofit and working on a weekend, this is a very, very serious national embarrassment," he said. "I think for all of us who love the city, we really need to think long and hard about collaboratively working towards solutions or it’s going to be a very serious downside that’s going to hit all of us."

More than 375 people attended the morning business event March 26, where panelists that included Related California CEO Bill Witte, Gilmore Associates CEO Tom Gilmore and CIM Group Managing Director, Investments Sondra Wenger and others discussed the state of development in downtown Los Angeles, downtown's growth and the area's homeless problem.

Amid a development renaissance that has seen an influx of high-rise office, residential and mixed-use towers and entertainment centers such as LA Live, Staples Center and the Arts District, downtown has regained its status as a cultural live-work-play destination. In December, the City Council approved the expansion of the Los Angeles Convention Center.

Since 2000, the residential population in downtown has tripled to more than 60,000 people. Tourism is up, with 50 million people visiting Los Angeles in 2018, according to Los Angeles Department of Convention and Tourism Development Executive Director Doane Liu. It is the eighth consecutive year Los Angeles has posted year-over-year increases, Liu said.

But as the area flourishes, the homeless issue has been seen as the thorn in downtown's side.

There are more than 31,000 homeless people living in the city of Los Angeles — about 7,000 of them reside in council district 14, which includes downtown Los Angeles, according to the Los Angeles Homeless Services Authority.

Earlier this month, the Los Angeles City Council settled a homeless property rights case that limits police and social workers' ability to seize the possessions of homeless people in Skid Row. The settlement could lead to more encampments, opponents argued.

"It is a problem," Holland Partner Group Executive Managing Director Tom Warren said. "We do hear about people leaving downtown because of the [homeless] concerns."

Looking back it is easy to blame city officials for ignoring the problem and not prioritizing affordable housing, maybe as a mandatory requirement for each housing development, Related's Witte said. 

"How many units are under construction or about to be or just were in downtown?" Witte asked. "Ten thousand or 12,000. How many are affordable? 100? That is inexplicable. How does that happen? How do you miss that opportunity with so much built?

"It's a missed opportunity. We can't go back in time but there had to have been better master-planning advice."

The good news is that the homeless crisis is now on the forefront of the conversation and on the minds of every politician in the state, he said.

"Downtown doesn't need a kick in the pants to build more housing," Witte said. "It needs a more creative approach to build affordable housing."

Doane, the executive director of the city's tourism department, who has worked in the city since the 1980s, said the No. 1 solution to solve homelessness is to build homes.

The city has addressed the issue with the passage of Measure H, which is raising $355M to combat homelessness and Measure HHH, a $1.2B bond to build more permanent supportive housing.

"It has taken us a long time to get this far, and we're not going to solve this overnight," Liu said. 

Liu said take it with a grain of salt but homelessness in the city did go down 6% last year. 

And it is not just housing that needs to be built for the homeless. As one attendee mentioned, medical and mental health facilities, job assistance centers, drug and alcohol rehabilitation centers and other facilities need to be built to truly solve this problem.

"It’s going to take small steps," Liu said.

Keller, the chairman at Mack Real Estate, encouraged the crowd to join a political action committee with initiatives around communicating with elected officials to force them to make tough decisions.

"We're at a point now that it is such a crisis and is so visible with the investment community and all of us here that we really need to mobilize around this problem and get involved," Keller said.