L.A. Commercial Sites Attract Residential Builders
As suburban-era cities have become "land poor," both planners and developers have advocated the recycling of underutilized commercial property for high-density housing. In particular, this solution has been under discussion throughout California and especially in Los Angeles, where housing production has been low and the supply of available raw land is dwindling.
A new analysis by Solimar Research Group shows that multi-family residential development is, in fact, occurring on commercial strips in L.A. Our analysis reveals that residential construction on commercially zoned properties is commonplace in the city of Los Angeles. We also found that commercial areas get larger projects than residential areas, and that poor parts of town see minimal multi-family construction.
o In the last two years, 44% of multi-family permits issued in the City of Los Angeles were for projects located in commercial areas.
In 2000 and 2001, the city issued 6,548 multi-family residential building permits. Of these, 2,944 (44.3%) were issued for projects located on commercially zoned parcels. In some parts of the city this figure is much higher, including South-Central L.A. (68%), East L.A. (98%), and the "Metro" planning area, which includes Hollywood and the Wilshire Corridor (68%). In two areas of the city, the North Valley and the Harbor area, all multi-family permits were issued in residential areas and none in commercial areas.
o The vast majority of multi-family projects — in either residential or commercial areas — are located in affluent sections of the city.
Of those 6,548 units, 2,629 (40.1%) located on the Westside, 1,623 were located in the South Valley (24.9%), and 1168 were located in the Metro planning area (17.8%). By contrast, South Los Angeles saw the construction of only 208 units (3.2%), while Central L.A. had only 271 (4.1%), East L.A. had 166 (2.5%), and the Harbor area 75 (1.1%). These numbers were not appreciably different between residential and commercial parcels.
o Multi-family residential projects located in commercial areas are generally larger than multi-family residential projects located in residential areas.
The 3,644 multi-family units constructed on residential parcels represented 125 different projects -- an average of 29 units per project. However, the 2,904 multi-family units constructed on commercial parcels represented only 31 different projects -- an average of 94 units per project. These statistics were fairly consistent across all area planning commission areas.
o Multi-family densities average approximately 50 units per acre, and that figure is similar for projects located on both residential and commercial sites.
Overall, the 6,548 units were constructed on 136.3 acres of land, for an average density of 48 units per acre. The figure for residential property was 51 units per acre; for commercial property it was 44 units per acre. The overall density on commercial property was reduced by the low density of the Pico Aliso public housing project in East Los Angeles (12.4 units per acre), a HOPE VI project intentionally designed at low densities.
Overall densities were similar for each planning area, but densities did vary within each planning area for commercial and residential parcels. For example, densities on residential parcels in the Metro planning area averaged almost 150 units per acre, while densities on commercial parcels in the Metro area averaged only 52 units per acre. In West Los Angeles, the reverse was true: Multi-family densities on residential parcels averaged 89 units per acre, while on commercial parcels they averaged 148 units per acre.
These conclusions are derived from data provided by the Los Angeles City Planning Department. (Special thanks to Jane Blumenfeld for assembling the data.) The seven geographical areas represented in this data comprise the territory covered by the seven Area Planning Commissions created by the city's new charter. The statistical patterns are influenced by the presence of a small number of large projects. More than half of the permits (3,716 units out of 6,548, or 57%) were issued for approximately 10% of the projects (15 out or 156, or 9.6%).