How Do Developers Respond to Land Use Regulations? An Analysis of New Housing in Los Angeles

How Do Developers Respond to Land Use Regulations? An Analysis of New Housing in Los Angeles

This article discusses regulations around land use and why careful implementation is important. The author studied how two areas of Los Angeles near rail stations developed housing under baseline land use regulations and found that developers were most sensitive to density restrictions and parking requirements.

"There is strong evidence that land use regulations constrain housing production. We know less about how real estate developers respond to specific zoning provisions. I compare the characteristics of new multifamily housing with baseline land use regulations in two sets of rail station areas in Los Angeles. I supplement this building-scale analysis with expert interviews. I find that developers were most sensitive to density restrictions and parking requirements. The average development in the Vermont/Western area had 112% of the maximum allowable residential density and 94% of the minimum required parking. Koreatown’s average development had 99% of the maximum density and 88% of the required parking. But, there was variation by area and whether a building was affordable or market rate, apartment or condominium, and by development size. Additionally, regulatory implementation can matter as much as the written regulations themselves. I recommend that cities take an evidence-based approach to reforming regulations and implementation processes."

Key findings

"The fundamental question is what kinds of written regulations and implementation approaches will get a city closest to its equity, environmental, and economic goals. Los Angeles, like many American cities, wants to grow around transit to reduce driving and auto congestion, increase transit ridership, and add affordable housing. The first step in linking planning and regulation with societal outcomes is to understand how regulations actually shape the built environment."

"Land use regulations matter for urban development, and density and parking regulations particularly so. Cities and state governments should closely scrutinize these regulatory provisions. Although land use regulations are primarily locally controlled, state governments can play an important role too."

"Cities should design planning and zoning systems that are fair and predictable for both existing residents and developers. Land use regulations must follow planning, and the goal should be to marry proactive planning with supportive zoning requirements and straightforward approval processes."

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