Downtown, Hollywood Planning Docs Approved, But Real Test Is Ahead

New plans for Downtown Los Angeles and Hollywood that were decades in the making were approved earlier this month, bringing much-needed clarity for civic leaders, but industry leaders say the plans leave many of LA's real estate problems unresolved. 

The plans pave the way for Downtown to add 175,000 new residents and 100,000 new housing units over the next two decades, about 20% of the household growth forecast for the entire city. In Hollywood, the plan would allow the neighborhood to add another 35,000 units to its stock over the same period.

Industry watchers and community advocates who spoke with Bisnow said that while the final version was far from perfect, they are pleased that something has been approved. Both plans have been in the works for years — Hollywood’s last update was invalidated by a judge.  The real tests lie ahead as the rules go into effect and it becomes clear which parts of the plan work as intended and which don't. 

The city has 35 community plans that are supposed to be updated every six years, but that hasn't been the reality. Between 2007 and 2017, only four of the plans were updated. Because the 2012 update to the Hollywood plan was overturned, the area has been operating under the previous plan approved in 1988. Not updating the plans is often cited as one of the reasons why development is so complex, expensive and subject to abuses of power in the city. 

“I don't think this plan is perfect,” CBRE Managing Director Jessica Lall said of the Downtown plan, although she added that it is clear.

“Because it's clear, that allows for predictability, and that's one thing that we're really lacking right now in the market: certainty.”

Downtown’s rules would require new projects to include some below-market-rate units, also called inclusionary zoning, though there were exceptions made in cases where office buildings are converted to housing. 

In the Hollywood plan area from Silver Lake to West Hollywood and up to the Hollywood Hills, affordable units would be incentivized by allowing projects on some of the neighborhood’s main thoroughfares, like Hollywood, Sunset and Cahuenga boulevards, to be taller than otherwise allowed if they include low-income housing. 

In one part of Downtown, Skid Row community advocates had hoped to carve out a larger section of the neighborhood for fully affordable housing. Although that larger goal wasn't achieved, new development in the core of Skid Row — bordered by Fifth Street, Central Avenue, Seventh Street and San Pedro Street — will be required to have at least 80% affordable units. That affordability level is much higher than elsewhere in Downtown. 

Los Angeles Community Action Network Deputy Director Steve Diaz said the final version of the plan, though not entirely what his organization hoped for, still represents huge gains for the neighborhood and the people his organization serves. Five or six years ago, Skid Row wasn't really part of the planning process.

“At the end of the day, we weren't necessarily 100% happy but weren't necessarily 100% upset,” Diaz said. “In terms of the plan, if I look back at where we started and where we ended, we definitely ended somewhere much, much closer to an equitable framework.” 

It will be awhile before the plans will go into effect. A handful of council members requested reports back on certain elements of the Downtown Plan, due in 60 days. Both ordinances needed to put the plans into action have to be reviewed by the city attorney, which is expected to take six months to a year. 

That means it will likely take even longer for the benefits and the shortcomings of the plan to shake out. 

“It's not yet clear if the city got the right balance of providing something developers are going to want to pursue,” said Jaymes Dunsmore, an associate in Gensler’s Cities and Urban Design studio. 

In Downtown and parts of Hollywood, new hotels will need to secure conditional use permits from the city, something Lall said doesn't help the city’s tourism industry. 

“I think there are ways to achieve the goals that people were looking for that wouldn’t put that new burden on hotel development in Downtown LA, which is a tourist center,” Lall said. 

In both plans, the length of affordability covenants was extended from 55 years to 99 for mixed-income projects seeking to use city incentives to build bigger projects than would normally be allowed.

Dunsmore said the Downtown plan includes a lot of requirements for building facades aimed at making sure the neighborhoods have cohesive looks and that these requirements could ultimately prove cumbersome for developers. 

“What I would expect is we'll see some areas where the requirements might be too onerous and they're not going to see the development they want,” Dunsmore said. “There will have to be adjustments going forward.”