CHIPing In: Evaluating the effect's of LA's Citywide Housing Incentive Program on neighborhood development potential

Takeaways The City of Los Angeles has a housing production target of 456,643 units for 2021-2029, increased from just 82,002 units for 2013-2021.As part of its housing element obligations, the city must approve zoning changes to accommodate more than 255,000 additional units by February 2025.Most of this additional capacity is expected to be delivered via the proposed Citywide Housing Incentive Program (CHIP). Although the city's adopted housing element included programs for rezoning some single-family zoned parcels, these programs were removed prior to releasing the CHIP ordinance for public comment.Single-family zoning prohibits lower-cost multifamily housing and accounts for 74% of residentially zoned land in LA. The largest component of CHIP is the Mixed Income Incentive Program (MIIP).It consists of a revamped version of the Transit Oriented Communities (TOC) program -Transit Oriented Incentive Areas -and the Opportunity Corridors and Opportunity Corridor Transition programs, which are new density bonuses restricted to certain multifamily-zoned properties in wealthier areas of the city. Exempting single-family parcels from zoning reform raises questions about the city's ability to meet its housing production goals and to affirmatively further fair housing (AFFH), as required by state law.We evaluate CHIP -and specifically MIIP -along these two dimensions. We find that MIIP increases "net realistic capacity" -which we define in the report -by an estimated 380,500 units, nearly 30% above existing policy.MIIP likely satisfies the requirement to increase zoning capacity by at least 255,000 units. Relative to existing policy, MIIP also increases capacity most in "high resource" and "highest resource" census tracts, as defined by the state.Net realistic capacity rises by 67-84% in higher resource neighborhoods and by less than 10% in low and moderate resource neighborhoods. However, total realistic housing capacity remains concentrated in lower-income neighborhoods.Nearly 60% of the total net realistic housing capacity is in lower-tier housing markets, where a city consultant determined that mixed-income development is generally infeasible. We use the Fair Housing Land Use Score (FHLUS), developed by the Lewis Center, to evaluate existing policy and MIIP.Both receive negative scores, but MIIP improves the citywide FHLUS from -0.32 to -0.21. Finally, we evaluate two of seven single-family rezoning options introduced in a Planning Department report to the City Planning Commission.SF Option 1 dramatically increases net realistic capacity and improves the citywide FHLUS (with MIIP) from -0.21 to 0.05.SF Option 1 increases capacity and improves the FHLUS only marginally. MIIP represents a positive step forward, but Los Angeles will fall far short of its housing production goal unless SF Option 1 -or a similarly ambitious single-family upzoning policy -is also adopted.Failing to incorporate single-family parcels into its reforms will also delay progress on neighborhood desegregation and sustain rising rents and displacement of vulnerable households.