Measure halting L.A. ‘mega-developments’ would hurt local economy, study says

Development fights in Los Angeles are typically local skirmishes — Hollywood businesses suing over a new apartment tower or Venice homeowners pushing back against a planned Abbot Kinney hotel.

But the latest battle over real estate development is a citywide fight. In March, Los Angeles voters will weigh in on Measure S, a ballot initiative that would temporarily halt the construction of some large-scale development.

With the 2017 election looming, opponents and supporters are making their cases to voters.

The latest salvo came Thursday when the opponents of Measure S released a report stating the measure would cost the city both tax revenue and construction jobs.

A report by Beacon Economics estimates the city would lose $70 million per year in sales, property and other taxes. About 12,000 jobs — many in the construction industry — would be lost each year.

Surrounded by construction workers Thursday at a Van Nuys job-training facility, Ron Miller, executive secretary of the Los Angeles/Orange Counties Building and Construction Trades Council, warned of job losses if voters back Measure S.

The construction group is part of the Coalition to Protect L.A. Neighborhoods and Jobs, which includes unions, business leaders and homeless advocates fighting Measure S.

“This isn’t a game,” Miller said. “Measure S punishes real families.”

Later in the day, Jill Stewart, campaign director of Coalition to Preserve L.A., which is behind Measure S, called the Beacon report “completely false,” and said it contained “ginned up” numbers.

Sparking emotions on both sides, and highlighting longstanding tensions over real estate construction across Los Angeles, the ballot measure will decide — at least for two years — the future of the city’s development.

Called the Neighborhood Integrity Initiative by supporters, Measure S would place a two-year moratorium on the construction of projects needing variances, zone changes, or some other exemptions to the city’s planning rules.

Supporters say the measure will stop the type of large-scale development that’s worsening traffic, driving up real estate prices and ruining the character of L.A.’s neighborhoods. Opponents argue the measure will hurt the local economy.

Beacon’s study, which was paid for by opponents of Measure S, found that limiting new housing would raise prices and rents, said Beacon’s executive director of research, Robert Kleinhenz.

“This measure absolutely goes in the wrong direction,” Kleinhenz said.

The report projects that at least 2,100 apartment or condominium units will not be built if Measure S passes.

Developers will often seek variances for taller buildings, which typically offer more expensive apartments or condominiums. Kleinhenz said that if those high-end units aren’t built, wealthy buyers will cannibalize middle-class housing, leading to a lack of moderately priced properties.

Measure S is led by the Coalition to Preserve L.A., which is largely funded by the AIDS Healthcare Foundation.

Supporters argue that the city’s planning process unfairly favors deep-pocketed developers, who influence politicians with campaign contributions and obtain building variances that otherwise wouldn’t be approved.

They argue that spot-zoning — where development decisions are made on a case-by-case basis — results in out-of-scale development.

Stewart disputed the Beacon study, saying her group’s analysis of the city’s permitting system found that the Measure S moratorium would affect just 5% of real estate projects.

If voters back the initiative, “the economy will be better off,” Stewart said. “You’ll have a City Council that’s forced to look at its planning and at its infrastructure. No city succeeds well when it ignores its infrastructure.”

Thursday’s economic report is the latest example of disagreement between the two groups.

Opponents of Measure S held an October news conference to argue that the moratorium would hurt city efforts to building housing for the homeless.

Stewart maintains the measure would allow housing for homeless Angelenos in residential and commercial zones.

The Coalition to Preserve L.A. has raised more than $1.4 million to support Measure S, according to filings made in September with the city. Nearly all of that money has come from the AIDS Healthcare Foundation.

The Coalition to Protect L.A. Neighborhoods and Jobs has raised at least $975,000, with major funding coming from two developers.

Los Angeles Mayor Eric Garcetti will campaign against Measure S in the coming months because he’s concerned it threatens the city’s economic progress, his political consultant Bill Carrick said Thursday.

The mayor said earlier this year he would seek to head off the ballot measure by meeting with the Coalition to Preserve L.A. to find a compromise. Conversations didn’t go anywhere, Carrick said, adding, “The group is committed to the ballot measure.”

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