Atlantic Avenue, a four-to-six lane artery that forms the spine of Long Beach, runs from the waterfront due north for eight miles. It then carries on into the hinterlands of the Gateway Cities in south Los Angeles County. Though Long Beach is relatively dense — at roughly 9,300 residents per square mile — development along the majority of Atlantic Ave. and the city’s other major boulevards rarely rises above one story.
The city is trying to change that — and not just in the usual ways.
“Underutilized strip centers and fast-food restaurants…. are pretty ubiquitous throughout every long commercial corridor in the city,” said Long Beach Community Development Director Christopher Koontz. “Those things are fine — that’s someone’s livelihood — but none of it is fantastic urban design that anyone is particularly proud of.”
Unlike many other coastal cities, Long Beach, population 456,000, has generally welcomed new housing. No major battles arose over its RHNA allocation (around 27,000 units), and it has, of late, aggressively up-zoned many parts of the city to allow multifamily and mixed-use development.
Despite the region’s demand for housing, Long Beach’s planners are not assuming that development will naturally follow up-zoning. Even with their statutory work done, they are engaging in an unusually aggressive campaign to actually promote development.
To Koontz, those one-story commercial strips, usually less than 40,000 square feet in size, along Atlantic Ave. and other boulevards represent prime opportunities to not only increase the city’s housing supply but also eliminate many of its less appealing properties—of which it has many.
“There’s not one or two or 12 or 24. There’s hundreds of these properties around the city,” said Koontz. “We’ll always need for some amount of retail, but not the amount of retail we have on the ground.”
Whereas large-scale residential redevelopment of malls and big box stores has generated buzz -- and legislation -- of late, those projects are relatively rare and often difficult to build and finance (see related CP&DR coverage). For some cities, the cumulative redevelopment of many small parcels could make an even bigger impact.
“There’s a huge opportunity," added Koontz. "We can’t make anyone build anything, anywhere. We have to come up with the right kind of incentive. None of these lots are huge, and none of them are super-easy to develop.”
Even if planners can’t make development easier, they have become part-economists and part-cheerleaders in the hopes of encouraging redevelopment.
The cheerleading element includes an extensive outreach program, aimed at both the general public and certain target audiences. The city has conducted focus groups with stakeholders and directly approached property owners “trying to get them excited about being part of the solution to building housing,” according to Koontz.
The department has focused particularly on North Long Beach through the Uptown Planning Land Use and Neighborhood Strategy (UPLAN), an area planning process that focuses largely on social equity. UPLAN is a subset of the city’s “Zone In” code update program, which “seeks to… develop zoning tools that implement the community’s vision, address existing and projected community needs such as expanded housing and job opportunities.”
North Long Beach is a focus area in part because, according to Alejandro Sanchez-Lopez, advance planning officer for the City of Long Beach, “studies showed the vast majority of housing development — over 95%, for multiple development cycles… had concentrated in the downtown area. We were looking to see what the economic —and not just zoning constraints — were to housing development in other parts of the city.”
Even if property owners are open to redevelopment, development might not be immediately welcomed in areas like North Long Beach, which have histories of disadvantage and are wary of effects like displacement.
“Communities of color, and formerly redlined communities, like North Long Beach need development,” said Elsa Mei Tung, principal of Long Beach-based policy consultancy KE Impact. “But it also needs displacement protections to make sure that both people and small businesses are not priced out.”
Especially given current interest rates and other economic pressures, properties are not going to redevelop themselves, no matter how high or dense they can go. The city has instituted a range of density bonuses far beyond what the state requires in order to entice developers.
The city’s enhanced density bonus program encompasses state density bonus law and adds up to 100% bonus. Beyond that, the city offers as many as eight other density incentives, depending on what levels of affordability a developer might offer. The incentives were designed based on pro formas that prospective developers might use to determine whether a project can turn a profit.
“You’d think a five-story is going to pencil versus operating an aging strip mall, but that’s not really what the numbers show” absent city incentives, said Kootnz.
It’s the kind of program that’s likely to appeal to savvy developers. But, even with willing developers, the city is equally concerned, if not more so, about willing landlords.
Many — it not most —attractive properties for redevelopment aren’t on the market. And property owners might have no intention of selling or developing, at least without a major nudge from the city.
“Even with rezoning, it’s not necessarily enough to excite or financially incentivize properties to turn over and become housing,” said Koontz.
Koontz described many landlords as “mom and pop” operations, holding one or a handful of properties that have been long paid off and owe relative pittances in property tax due to Prop. 13 controls. These properties are, in many cases, underperforming—with multiple vacancies and infrequent upgrades—but are still valuable to their owners if not to the city’s urban fabric.
“They tend to be owned by mom and pop landlords or mom and pop may have developed the property and now its’ owned by the kids that never wanted to be landlords in the first place,” said Koontz. “But, they’re probably 100% paid off, they’re cash-flow for whomever owns them.”
This situation reflects the gap between what is optimal for a city and what is optimal for a property owner.
“The question of these properties that are owned by individuals, or very small companies, getting them to reach a higher and better use, there are a lot of issues with that,” said Matthew Hargrove, president and CEO of the California Business Properties Association.
Hargrove cited expenses imposed by building codes and other regulations that kick in whenever a property owner attempts major tenant improvements.
“There’s a huge built-in disincentive for certain smaller buildings to do TI’s,” said Hargrove.
By contrast, Hargrove said that large- and medium-sized commercial property owners are, typically, always looking for deals and/or are proceeding with tenant improvement projects. Those developers and owners are generally the ones that cities would look to for major commercial-to-residential conversions and adaptive reuse projects.
“Generally, I have members who are active property owners that are not sitting on old assets that are underperforming,” said Hargrove. “My members would probably be buying up these underperforming assets and doing tenant improvements and turning them around.”
Hargrove said that, if cities want properties or areas to be redevelop, they need to be prepared to make infrastructure investments and otherwise make the areas more appealing to well-capitalized developers.
“This is where cities’ economic development programs are extremely important,” said Hargrove. “A company is not going to come in and buy a distressed property…. But, if there’s an economic development program behind it where a city says they’re going to invest, say, $12 million for infrastructure for a four-block area, then you’re going to see companies come in.”
Long Beach’s efforts may be unique in that they are seeking to encourage the development of countless small projects rather than a relatively small number of large projects.
“I don’t know if there’s another city doing exactly what we’re doing,” said Koontz.
In fact, some cities are doing the opposite. Despite having similarly long, low-slung boulevards, the City of San Jose is approaching conversion of commercial property gingerly.
“Generally, the City of San Jose seeks to preserve commercially zoned land, as commercial uses are an important part of the city's jobs, vibrancy, and tax base,” said San Jose Planning Division Manager Martina Davis via email. She added, though, that the city encourages conversions in certain Urban Village Plan areas.
San Jose’s constraints aside, Koontz said that, if small-scale redevelopment catches on in Long Beach, it could offer a model for countless others in the Los Angeles area.
“When I drive around L.A. County and Orange County…. this is kind of what I see everywhere,” said Koontz. “If you keep driving north (from Long Beach), you run into different cities. The pattern continues. It just repeats and repeats and repeats.”
Contacts & Resources
Martina Davis, Planning Division Manager, City of San Jose, Martina.Davis@sanjoseca.gov
Christopher Koontz, Community Development Director at City of Long Beach, Christopher.Koontz@longbeach.gov
Alejandro Sanchez-Lopez, Advance Planning Officer, Alejandro.Sanchez-Lopez@longbeach.gov
Elsa Mei Tung, Co-Founder and Principal, KE Impact, firstname.lastname@example.org