An AIDS Charity Fights Builders in L.A.
Los Angeles, long on sprawl but short on housing stock, is no stranger to development battles. But it’s never seen anything quite like the clash over a proposal on the March 7 municipal ballot, known as Measure S, which would put a two-year halt on most major real estate projects.
Spearheading the initiative is the nonprofit AIDS Healthcare Foundation, which has supplied more than 98 percent of the more than $4.5 million spent as of Feb. 18 on pro-S efforts, according to disclosure forms filed with the city. Critics question the motivations of the group, which is in the midst of a lawsuit to stop two 28-story luxury residential towers from going up next to its headquarters on Sunset Boulevard.
And the developer of those towers? That’s CH Palladium LLC, which had put in about 51 percent of the $2 million behind an anti-S drive as of Jan. 21. (Spending since then had not been disclosed by March 1.) Much of the rest is from others in real estate, including developer SunCal and the real estate investment trust Kilroy Realty Corp.
The developers’ vested interests aren’t tough to figure out. The AHF’s stake in the fight is less obvious. While it’s fronted other ballot measures, those were more closely related to the agency’s core mission of providing health care to and advocating for AIDS patients, says Eric Sussman, a senior lecturer on the faculty of the UCLA Ziman Center for Real Estate, who’s given money to the foundation over the years. “To get into real estate—that’s a complete 180,” he says.
Not to hear foundation President Michael Weinstein tell it. “Nonprofits have an important role to play in the community,” he says. “I don’t see why only billionaires should get to shape policy.” In his view, forcing a building pause would give the second-largest U.S. city a breather to overhaul its outdated zoning laws and come up with a plan for tackling a serious affordable-housing deficit. Many of the people the foundation serves in Los Angeles are or have been homeless or struggle to pay rent.
There’s no dispute among those in the anti-S camp that Los Angeles is in a housing crisis. They say that the answer is to keep building and that Weinstein’s logic confounds them. Says Richard Green, director of the University of Southern California’s Lusk Center for Real Estate: “If food is too expensive, what do you do, make it harder to grow food?”
The city has one of the nation’s highest rates of cost-burdened residents—meaning they pay more than 30 percent of their income toward rent or mortgages. It’s the third-most expensive market in the U.S. in terms of mortgage affordability, after San Jose and San Francisco, according to Zillow. The city’s homeless population increased 11 percent in 2016 from 2015.
Opponents of S have accused Weinstein of squandering the AIDS charity’s money on billboards and fliers in a development debate. “Our budget for 2017 is $1.4 billion, so a tiny percent of it will go to this initiative,” Weinstein says. According to a filing by the foundation, more than half of its money comes from the 43 pharmacies it operates in the U.S. The rest is from grants, donations, and revenue from its Out of the Closet thrift stores.
Last year the foundation filed its lawsuit against the city and the developer to stop the towers going up next to its offices. It claims the City Council breached zoning and other laws in approving the project, granting exemptions to height and density restrictions, so-called spot-zoning decisions. Spot-zoning can override the General Plan—the blueprint that guides L.A. development—on an ad hoc basis. The result, critics say, is a mishmash of edifices taller or denser than should be allowed, with little thought to effects on traffic. Measure S would temporarily prohibit such exemptions.
But the exemption route is the one most big builders go these days. The General Plan hasn’t been tweaked in 20 years, though the population has exploded. Neither have most of the 35 community plans that set rules for individual districts. Attempts to refresh those plans have often been contentious.
On Weinstein’s side in the fight are several homeowner associations, the Los Angeles Tenants Union, and former Mayor Richard Riordan. The current mayor, Eric Garcetti, opposes S, as do Governor Jerry Brown, the Los Angeles Area Chamber of Commerce, labor unions, and the antipoverty group United Way of Greater Los Angeles. The Los Angeles Times, in an editorial, called Measure S “a childish middle finger to City Hall.” Dozens of urban-planning academics are in the anti-S coalition, including Dowell Myers of USC, who says Weinstein has blown a grievance about a local project into dangerous proportions. “This has gone nuclear,” Myers says.
Neither side has released opinion polls, so there’s no guide to guessing whether Measure S will pass. One outcome seems certain either way: more fights over housing.
The bottom line: A ballot measure in Los Angeles would make it harder to do any building in the city for the next two years.