The Los Angeles Planning and Permitting Industrial Complex
As I’m sure we all have noticed in the City of Los Angeles, the practitioners of zoning (consultants, expeditors, attorneys) are further and further detached organizationally from the entity deemed the actual “developer” (developers with the knowledge of a zoning practitioner are almost unicorns in Los Angeles at this point and have resolved in most cases to being solely the quarterbacks for debt and equity and their team of consultants). The knowledge gap between zoning practitioners and developers/builders on the topic of zoning has widened to levels that are not necessarily conducive to solving the issues we have as a city or capital’s requirements to be deployed into a specific development endeavor for it to go vertical. How do we know this? We’ll there are hundreds upon hundreds of “entitlements” that have been processed over the last ten years by practitioners that will never get built (in any interest rate environment for that matter). That’s how we know this.
There is an allure in an idea in Los Angeles that the mere processing of an entitlement (the pushing of ungodly amounts of paper) will create tangible “land lifts” which, except for a few examples here and there constituting what I would call “nail on the head” executions do not create discernable “land lifts”.
The layers and amounts of interpretations required to traverse the entitlement process (and planning a building) in LA usually do not translate well to the likelihood that buyers and the market at the time of your letter of determination are lining up to pay you handsomely for your specific interpretation. Quite the opposite, I’ve observed, and these entitlements that will never go vertical have taken years, hundreds of thousands of dollars in consulting and CITY FEES, hearings, time, energy etc., etc. I would consider the LOS ANGELES PLANNING AND PERMITTING INDUSTRIAL COMPLEX, and it is more than real.
We can deploy all the fancy new zoning we want and there are some very influential things happening (e.g. unlimited density in high resource near transit – the City’s latest and most ambitious density bait policy in my career) but for the love of god let’s transact the development sites directly closer up the chain to the actual builder and give them terms so they can conceive a project that can be capitalized and built. The land seller gets what they want by giving the builder terms. Everyone wins, including the City in that equation.
