Exposition Line Infill Development Potential Analysis

Transcription

1 Exposition Line Infill Development Potential Analysis William Fulton Ryan Aubry Darren Greve March 30, EAST MAIN STREET VENTURA, CALIFORNIA PHONE: 805/ FAX: WEB: 1

2 Table of Contents EXECUTIVE SUMMARY... 3 INTRODUCTION GEOGRAPHICAL SCREENING METHODOLOGY DISCUSSION ECONOMIC / POLICY ANALYSIS METHODOLOGY INFILL PROTOTYPES PRO-FORMA ANALYSIS UNDER CURRENT ZONING IDENTIFYING STRATEGIES Research of existing incentives COMPARING THE IMPACTS Prototype 1 Townhouse Project Prototype 2a Small Mixed-Use Project Prototype 2b Small Condo Project : Prototype 3a - Large Mixed-Use Project Prototype 3b - Large Condo Project SUMMARY OPPORTUNITIES AT EACH STATION LA CIENEGA STATION (COUNCIL DISTRICT 10) LA BREA STATION (COUNCIL DISTRICT 10) CRENSHAW BLVD STATION SOUTH WESTERN AVE. STATION APPENDIX A: INFILL PROTOTYPES APPENDIX B: INFILL PRO-FORMA ASSUMPTIONS AND PROTOTYPE PRO-FORMAS

3 Executive Summary With the growth in transit construction in the Los Angeles area, there is a corresponding increase in interest among both policymakers and developers in stimulating transitoriented infill developments. However, it is not always easy to identify promising infill sites, nor is it always clear to policymakers which infill- or transit-oriented policies are likely to succeed in stimulating development. The focus of this study is shed light on these two questions with regard to the planned Exposition Boulevard Light Rail Line. Using both GIS technology and pro-forma analysis, we identified both infill potential and development feasibility in a ½-mile radius around five planned Expo Line stops La Cienega, La Brea, and Crenshaw (Council District 10), as well as Western and Vermont (Council District 8). Using land values and unit market price information as calculated by Epic Land Solutions, and development costs based on conversations with infill developers 1, the financial feasibility of different infill development prototypes as well as their suitability for the areas around each station were analyzed. Figure 1. Exposition Line Overview Map 1 Conversations with Olson Development Co., AMCAL, Century Housing, River Bank Development, Comstock Homes, and Phoenix Group. 3

4 Infill Potential in Station Areas Using a GIS screening process, we found significant but different infill development potential around each station. To identify parcels with infill potential, we typically identify parcels with considerable remaining capacity under current zoning (that is, currently built residential units compared to zoning maximum) and a low improvement:land ratio (meaning the assessor has determined that the land is more valuable than the improvements. Along the Expo Line, we used the following screening criteria: Parcels with a Built:Capacity Ratio (ratio of current residential construction to maximum allowed by zoning) of 0.5 or less. Parcels that had a Remaining Capacity (under current zoning) of more than 1 unit. Parcels with an Improvement:Land Ratio (as recorded by the assessor) of 1.5 or less. In parcels zoned for Manufacturing, an Improvement:Land Ratio of 1.5 or less. We have separated out industrial zoning classifications from residential and commercial classifications because industrial zones currently do not permit housing, whereas residential and commercial zones do. 4

5 La Cienega Station (Council District 10) The area around the proposed La Cienega Station has more land used for industrial (25%) than any other station. Furthermore, many of those parcels are large and fall within State Enterprise zones. Overall, we found 235 parcels totaling 42.5 acres with infill potential in commercial and residential zones, and another 44 parcels totaling 65.5 acres with infill potential in industrial zones. We believe the industrial parcels, especially west of LA Cienega, hold considerable infill potential, but this would require a change to permit residential or mixed-use development in industrial zones. La Brea Station (Council District 10) The La Brea area has considerable industrial land but also considerable land currently dedicated to high-density residential use (15%). Overall, we found 550 parcels totaling 101 acres in residential and commercial zones with infill potential (indicating a pattern of small lots) and 99 parcels totaling 32 acres with infill potential in industrial zones. Theoretically, there is considerable infill potential on the supermarket and retail parcels south of Exposition and east of La Brea, although such infill development would obviously have to incorporate vital grocery and retail services. We also found the wedge of land in between Exposition and Jefferson to be extremely well suited for infill development especially since this area falls in both a CRA and State Enterprise zone. Furthermore, La Brea currently has the necessary critical mass of density that would support mixed-use projects. Crenshaw Station (Council District 10) The Crenshaw station area is significantly different than the two stations to the West. It is dominated by the West Angeles Church of God in Christ Cathedral, which occupies the northeast corner of Exposition and Crenshaw, as well as single-family residential development, which occupies 56% of the land in our study area. Nevertheless, we found infill potential on 654 residential and commercial parcels totaling 122 acres and on 21 industrial parcels totaling 5.5 acres. Two parcels adjacent to the Cathedral one owned by the Gas Co. and the other owned by the City show significant potential. There is also considerable potential along the Jefferson corridor and on Crenshaw south of Exposition. South Western Avenue (Council District 8) The Western Avenue station area has many similarities to Crenshaw single-family residential development, which currently occupies 51% of the land area. (Duplexes, triplexes, and four-plexes occupy another 31%.) Nevertheless, we found 920 parcels 5

6 totaling 131 acres with infill potential. In particular, we found considerable infill potential on commercial parcels along either side of Western Avenue. South Vermont Avenue (Council District 8) The Vermont Avenue study area is heavily influenced by USC and Exposition Park, which occupy virtually all of the property in this area east of Vermont. Nevertheless, we found 611 parcels totaling 113 acres that met our criteria for infill development potential. Most of these are small RD1.5 parcels, but we also note that several large parking lots along Vermont Avenue just west of the Coliseum are zoned for medium-density residential and, at least in theory, hold significant potential. Infill Prototypes and Infill Policies We created six prototypes and tried to determine their financial feasibility along the Expo Line given different policy options. These were: Townhomes Prototype 1 : An 8-10-unit townhouse project typically built on an assemblage of two 50 x 150 lots in R-2 zones. Small mixed--use Prototype 2a : A 20-unit mixed-use project with 20-25% retail space. Single-podium parking typically placed on a parcel with a minimum lot size of 16,000 square feet in CM and C-1 zones. Small condo Prototype 2b : An all-residential version of prototype 2a located on parcels of similar size in R-3 zones. Large mixed-use Prototype 3a : A unit mixed-use project with double podium parking (1 above grade level and 2 below grade levels) often placed on parcels ranging from 1 2 acres in C zones. Large condo Prototype 3b : An all-residential version of prototype 3a in R-4 zones. We concluded that most of these prototypes are not economically feasible under current policy conditions. Both density increases and parking reductions move all projects toward economic feasibility. However, generally speaking we found that parking reductions play a more important role in making projects economically feasible than do density bonuses. 6

7 A density increase alone created financial feasibility only in Prototype 1 (the townhouse project) and Prototype 3a (the large mixed-use project) and in the case of 3a only with a 100% density increase. Parking reductions alone were capable of bringing a project to profitability in Prototypes 2a (the small mixed-use project) and 3a (the large mixed-use project)- and then only in industrial zones. In large part these differences in the pro-forma results in different zoning categories arises from significantly different land prices. We found that along the Expo Line corridor, residential land is valued at approximately $75 per square foot, compared with $55 per square foot for commercial land (despite identical residential zoning capacity), and $42 for industrial land. The biggest policy change that would be required here, of course, would be to permit residential or mixed-use projects in industrial zones. (For the purpose of this study, we simply assume that industrial property could take the same residential density as commercial parcels.) It is also important to note that our pro-forma analysis cuts against the conventional wisdom among infill developers that retail does not pay. Many infill developers do not even count retail rents in their pro-formas, viewing it as an amenity. We believe it can and should be counted as a viable revenue source, thus making some mixed-use projects more viable than might otherwise seem to be the case. Overall, we found that most prototypes are financially viable along the Expo Line with a 50-75% increase in density and a 25-50% reduction in parking. Of course, public agencies could choose to subsidize the projects financially, reducing the need for a density increase and a parking reduction. 7

8 Introduction With the growth in transit construction in the Los Angeles area, there is a corresponding increase in interest among both policymakers and developers in stimulating transitoriented infill developments. However, it is not always easy to identify promising infill sites, nor is it always clear to policymakers which infill- or transit-oriented policies are likely to succeed in stimulating development. The focus of this study is shed light on these two questions with regard to the planned Exposition Boulevard Light Rail Line. The Exposition Light Rail Line is planned to connect downtown Los Angeles with Culver City and eventually on to Santa Monica. Ground breaking on the line will begin in 2006 with its first destination is planned for the Vermont station adjacent to USC. This stop is also within walking distance of the Coliseum. It is scheduled to be completed to Culver City by This study assesses infill potential within a ½-mile radius of five planned Exposition Light Rail stations La Cienega, La Brea, and Crenshaw (in Council District 10) as well as Western and Vermont (in Council District 8). Because the precise station locations have not yet been decided, we have simply drawn a radius between the intersection of Exposition and the north-south cross-street in the station area (for example, exposition and La Cienega). By using GIS techniques, we are able to isolate underutilized parcels of land that might be candidates for infill development. In addition, we also analyze these opportunity sites from an economic perspective examining how prototypical infill developments might be constructed on the sites and whether such projects would be financially feasible from the developer s point of view. These pro-forma analyses also allow us to test different policy approaches to see if they help close any financial gap that may exist. Section 1 of this report describes the GIS methodology and describes the overall situation for the entire study area, including maps. Section 2 describes the economic analysis and reports on the overall economic feasibility 8

9 1. Geographical Screening The first component of Solimar s analysis is the Geographical Screening, an in-depth GIS-based procedure to identify infill opportunity parcels within a given area. The purpose of this is to identify the total remaining capacity for new residential development under current zoning as well as identify the highest opportunity sites for infill development and redevelopment based on market conditions. This process also helps to identify patterns in areas available for development as well as opportunities for land assembly. The results of this component directly feeds into the Economic / Policy Analysis component. 1.1 Methodology A multi-step process is used to identify the infill opportunity sites and then quantify and map infill potential in the study areas. 1. Collect and Integrate Planning Data Sets The first step in this process is to collect the data sets which allow for analysis to take place. The pivotal data sets needed area: the parcel GIS data files, the Zoning map in GIS format, and the parcel-level attribute data in database form. It is then necessary to integrate these databases to conduct a sophisticated set of overlapping GIS screens. 2. Create New Fields to Characterize Infill Potential Parcels After the planning data sets have been integrated it is possible to create new fields that help to characterize the infill potential of a given parcel. The most relevant screens created in the Expo Line analysis are: Remaining Capacity: The remaining capacity for density under the current zoning. This is a calculation derived from existing number of units on a parcel (drawn from the assessor parcel attribute data) subtracted from the maximum allowed under current zoning (derived from the zoning for the parcel). For example, a parcel whose zoning would permit 4 units but only has 1 unit built on it would have a remaining capacity of 3 units. Built:Capacity Ratio: Built:Capacity Ratio is the ratio of residential units existing on the property (built) versus the number of units permitted by zoning (capacity). It is derived by dividing the existing residential units currently developed on a parcel by the maximum allowed units under current zoning. For example, a parcel that currently has 1 unit on it but a maximum allowable unit count of 4 under current zoning will have a Built Capacity of 25%. 9

10 Improvement:Land Ratio: A ratio derived by dividing the value of building improvements on a parcel by the land value of that parcel. These values are assigned by the assessor. 3. Screen Parcels to Identify Infill Capacity Once the new fields have been created, then it is possible to screen the parcels based on their infill characteristics.. The purpose of the screen is to identify the parcels that still have remaining capacity for residential development under current zoning regulations. By summing this data, we can total infill potential of a give area. (For various reasons not all of these parcels will not redevelop to their stated maximum.) In the case of this study a straightforward screening process is used to identify opportunity parcels. The following screens were used across all parcels that are currently zoned for residential construction: 1. Select parcels that have a Built:Capacity Ratio of 50% or less 2. Remove from this selection parcels with a Remaining Capacity of 1 or less. 3. Remove from the remaining selection parcels with an Improvement:Land Ratio of greater than or equal to 1.5 A screen was also applied to identify opportunity parcels with a manufacturing zoning code which do not currently allow for residential development. The screen was: 1. Select parcels with a Manufacturing zoning code that have an Improvement:Land Ratio of less than 1.5 Other more detail screens that can be utilized for identifying infill opportunity parcels are based on the Year Built field and Assessor Land Use field. For example parcels developed in the last 10 years or with an Institutional land use can be screened out. This was not done in this study. 4. Produce Maps and Statistical Analyses After the screening is complete, maps are created to help visualize the opportunities that exist in the analyzed region. In addition to a map depicting the parcels that survived the screening process, maps are also created showing the zoning, land use as well as other themes of the study area. Detailed statistics are also produced describing the screened parcels. Such statistics include total number of parcels, total remaining capacity, and count of existing units. The project area maps depict a general study area defined by a 1 mile buffer of the 5 stations under study as well as a ¼ and ½ mile buffer of each station. The specific station maps depict the area near the station within the ½ mile buffer. Below is a description of the maps. 10

11 Project Area Scale Maps: These maps help to get a good understanding of the built environment around the planned stations. In addition they also lay out jurisdictional and improvement districts. As seen in the land use map, each of the stations varies widely in the land uses that surround it. 1. Stations Analyzed : Identifies the approximate location of the study areas as well as their names identified by the cross streets. This map also identifies the major arterials. 2. Council Districts : Highlight the boundaries of the L.A. City Council Districts with relation to the stations under study as well as the boundaries of the LA Community Plan Areas. 3. SCAG Land Use : Displays a SCAG developed land use dataset derived from aerial photo analysis in Zoning (Generalized) : Displays the City of LA s zoning map with zoning classes combined into generalized classes. 5. General Plan (Generalized) : Displays the City of L.A. s general plan map with the classes combined into generalized classes. 6. Zoning, Specific Plans : Displays the zoning clusters that have Specific Plans associated with them. 7. Improvement Zones : Identifies the following 3 types of improvement zones within the general project area boundary: a. Redevelopment areas; b. State Enterprise Zones; c. Business Improvement Districts. Station Specific Maps: These maps are discussed in more detail for each station site in Section Infill Opportunity Parcel Identification : Highlights the implementation of a screening process outlined below to identify parcels with the greatest infill development potential. The selected parcels are highlighted by zoning type. Two screens have been used, the second being a further refinement of the first. 2. Assessor Land Use : Displays the Land Use as stated by the LA County Assessor. The Assessor land use codes have been combined into generalized categories. The current number of residential units is displayed on each parcel. 3. Zoning : Displays the LA City zoning data for the parcels within ½ mile of the station. Specific zoning types are also labeled. 4. General Plan : Displays the LA City general plan data with specific classes identified. 5. Assessor Year Built : Using LA County Assessor data, parcels are broken down into year built categories. As the data is stored in a 2-digit format there is an issue with what century the parcels are (1900, 2000?). 6. Improvement Zones : Higher detail view of previous map depicting improvement zones at the entire study area boundary level. 11

12 1.3 Discussion As previously mentioned, the screening process applied in this component of the analysis was fairly general. The goal of the screen was to identify the potential infill opportunity sites that currently (besides the parcels with manufacturing zoning) had remaining capacity for new development under existing zoning. In the following economic and policy analysis these identified infill opportunity parcels are further scrutinized for the potential to be developed in the form of identified Infill Prototypes. At this point the Infill Opportunity maps display all parcels identified as part of the original screen. In future work it is planned to further refine these maps to only highlight parcels, or assemblage of parcels that will actually allow for development of given Infill Prototypes. It is also important to mention that the assessor parcel data used in this analysis is never one hundred percent correct. As properties are constantly changing ownership, it is not possible to always have an up to date snapshot of current land ownership data for a given area. The assessor land use data utilized in this research also tends to have accuracy issues. We have found from past work that is it generally around ninety percent correct, which we feel establishes its value for this type of analysis. As records for properties are often only recorded when a property changes hands, changes to the land use have the potential to not be noted. Land and improvement values are utilized in the screening process of the infill opportunity parcels, specifically the Improvement to Land Ratio that we derive. It is known that Proposition 13 has an effect on the absolute value of a given parcel in comparison to its value in today s dollars. Though this may have some effect on the calculated Improvement to Land Ratio, we feel that is still stands as a good indicator of investment made in improvements on a given property. 12

13 2. ECONOMIC / POLICY ANALYSIS A second component of Solimar s Infill Analysis is a rigorous economic analysis that tests possible changes in land use policy to determine their impact on the feasibility of projects for developers. More specifically we seek to measure the financial feasibility gap associated with typical infill developments of various sizes and quantify the effect changes in public policy may have on reducing this gap thereby encouraging infill projects. The ultimate goal is to distill the findings into a set of usable policy options that are grounded in economic and industry accepted reality. 2.1 Methodology We approach this policy analysis with a six-step process as follows: 1. Identify Infill Prototypes First we identify typical infill development projects currently being built. The basic plans for these were generated and truth checked with both local developers and planning agencies. They serve as the basis upon which we identify policy strategies. 2. Develop Pro-forma Analysis Next we model developers costs, revenues, and expected returns to estimate the financial gap under existing regulations. Our proforma model seeks to accurately and with detail capture the costs of development and was subsequently created through conversations with local builders 2. We also use market analysis to estimate unit selling prices, lease rates, and land values. 3 Ideally we would run the pro-forma analysis on several scenarios all market rate units, projects with mixed income units, and projects with all rental units. However, due to time constraints we focus only on for sale market rate units as a baseline to consider policy options. 3. Identify Strategies Next we identify strategies aimed at stimulating the development of infill prototypes. This step involved extensive research into current local and national infill policy initiatives. For the purposes of this expedited study we focus only upon the two most important identified from our research density allowances and parking requirements. 4. Compare the Fiscal Impact Next we combine Steps 1, 2, and 3 by running the pro forma on infill prototypes under a range of density and parking scenarios to quantify effects and ascertain the gap s sensitivity to these potential strategies. We also explore the extent to which these policies could work in unison. 2 Conversations with Olson Development Co., AMCAL, Century Housing, River Bank Development, Comstock Homes, and Phoenix Group. 3 We also utilize EPIC Land Solutions to provide us with accurate and current market data 13

14 5. Summarize Results The final step in the overall analysis is to summarize the results into a list of local policy options that are both practical and implementable in the study area. 6. Station-Specific Discussions. Finally, we describe how the identified policy strategies would play out in the different station areas. Each station stop tells a different story in terms of its land use patterns and the opportunity parcels we identify in our GIS screening analysis. Linking each station s story with the policy options produces useful predictions of policy outcomes. 2.2 Infill Prototypes Conversations with developers led us to identify 4 typical infill development projects or what we call infill prototypes. Generally speaking, we found infill projects to be categorized by size into small (8-10 units), medium (20-50 units), and large (> 100 units). One variation on the prototypes is the mixed-use project (usually mostly residential projects with some retail space). In addition, depending on policy goals, each of these subclasses can be further divided into all market-rate projects, mixed-income projects with some affordable and workforce housing, and all-rental projects. However, as earlier mentioned, this study only analyzes market rate units leaving these mixed-income and rental projects as an area for future study. The 4 general prototypes we identified and use as the basis for the pro forma analysis are explained below and are illustrated in Appendix A. (Table 2.1 provides a brief summary of each zoning category used for the prototypes.) Townhomes Prototype 1 : An 8-10-unit townhouse project typically built on an assemblage of two 50 x 150 lots in R-2 zones. Small mixed--use Prototype 2a : A 20-unit mixed-use project with 20-25% retail space. Single-podium parking typically placed on a parcel with a minimum lot size of 16,000 square feet in CM and C-1 zones. Small condo Prototype 2b : An all-residential version of prototype 2a located on parcels of similar size in R-3 zones. Large mixed-use Prototype 3a : A unit mixed-use project with double podium parking (1 above grade level and 2 below grade levels) often placed on parcels ranging from 1 2 acres in C zones. Large condo Prototype 3b : An all-residential version of prototype 3a in R-4 zones. 14

15 Table 2.1 ZONE CLASS Description Density Category Prototype C1.5 Commercial Comm-High C2 Commercial Comm-High C4 Commercial Comm-High 3a CR Commercial Comm-High C1 Commercial Comm-Med CM Commercial Comm-Med 2a M1 Manufacturing 0.00 Manufacturing 2a,b & 3a,b MR1 Manufacturing 0.00 Manufacturing R1 Residential 8.70 Res-Low RD4 Residential Res-Low none R2 Residential Res-Med RD1.5 Residential Res-Med RD2 Residential Res-Med 1 RD3 Residential Res-Med R3 Residential Res-High 2b R4 Residential Res-VeryHigh 3b The results from the GIS screens suggest a limited number of opportunity parcels of adequate size for the various prototypes are readily available for infill development. Rather, opportunity abounds for assemblage of parcels to meet the prototype size requirements. A goal of future research is to develop methodology to discretely identify and quantify the extent of parcels of adequate size and/or the assemblage potential for the various prototypes Pro-forma Analysis Under Current Zoning A working pro-forma model for each of the prototypes was created after extensive conversations with local area developers about the costs they incur as well as the returns the industry expects. We also looked into the City s existing regulatory framework to determine the type and amount of development allowed in certain zones. We used the pro-forma model under existing regulations to estimate the financial feasibility gap that generates a project net margin which is 15% of total revenue 4 that is, the development industry s minimum expected return. To bring accuracy to the pro- 4 We found 15% net margins also generally produce project Internal Rates of Return (IRRs) of 25%- also the industry expected values. We model the IRRs with the typical project equity investment and time horizons. 15

16 forma model and reflect actual real estate market conditions, we utilized the services of EPIC Land Solutions to provide information about land values, unit selling prices, and retail lease rates. The gap we estimated for each prototype is explained briefly below. (For the purposes of this analysis, we assumed that industrial parcels could accept the same residential densities as commercial parcels which would require a policy change.) Townhome Prototype 1: The results for Prototype 1 indicate a feasibility gap of $563,000 under existing zoning. This means that in order to make a townhouse project on assemblage of 2 50 x150 lots pencil for a developer, revenues would need to be increased or costs decreased by more than a half-million dollars. The gap is considerable given that revenues from the entire project are only $3.5 million, meaning the gap represents roughly 16% of the total project revenue. Small mixed-use Prototype 2a: Prototype 2a (built on 0.37 acre parcels with C-1, CM zoning) has a low unit count relative to costs, and the tradeoff of residential units for retail space makes it a difficult project to accomplish from the developer s perspective. The feasibility gap for Prototype 2a was estimated to be $1.2 million under existing regulations. This gap represents 18% of the project revenue - a rather significant deterrent to prospective developers pursing a 20 unit mixed-use project on roughly 0.37 acre parcels. Gaps for this type of project are the result of a combination of low retail lease rates and high vacancy and capitalization rates 5. An important, yet less certain, variable when estimating the value of the retail component of a mixed-use project is the vacancy and absorption rates. Developers often perceive the retail component of mixed-use will vacant for extended periods and/or capture only marginal annual revenues. Often they pursue mixed-use only as an entitlement strategy. We modeled the value of the retail space component using lease rates of $2.40/sf, vacancy rates of 5%, and cap rates of 6.25% as obtained through local market area research. The results of our valuation indicate that the retail space is valued in the market at $405/sf compared approximately $500/sf for residential space. These numbers show that while lower in value, the retail space does not generate the loss the industry perceives. Rather retail space is simply not adding to the bottom line to the degree of residential space meaning the gap is caused primarily from development costs and not loss of potential revenue from lost residential space. Small Condo Prototype 2b: Prototype 2b, an all-residential version of 2a (built on 0.37 acre parcels with R-3 zoning) shows a sizable gap of $1.65 million. The gap is greater for a 2b prototype than for 2a because residential land is more expensive than commercial land. The gap in this case represents 20% of total project revenues. Opportunity may exist to build residential projects on commercial and industrially zoned land. Chart Capitalization rate reflects the relationship between a property s income and its value. It is determined by the market and by the recent selling price of similar properties (Professional Real Estate Development, 2 nd Edition, ULI Institute) 16

17 illustrates the gaps that exist for prototype 2b on 0.37 acre parcels with commercial and industrial zoning- $1 million and $676,000 respectively. Large Mixed-use Prototype 3a: Prototype 3a is a scaled up version of 2a which imposes significantly greater costs due to the necessity to provide additional parking in a limited space. Yet despite this, the greater unit counts generate economies of scale to produce a feasibility gap of only $1.8 million. As in Prototype 2a, the gap is generated primarily from development costs rather than lesser valued retail space. Large Condo Prototype 3b: The gap for Prototype 3b is $5 million. R-4 land costs are high ($85/sf) as well as the an all-residential project has greater construction costs; residential space costs more to build than retail space ($150/sf vs $90/sf). Even though parking requirements are less than in a mixed-use project of the same size, the overall cost are not offset with the revenue from all residential units. The gap is not as great for industrial and commercial land Identifying Strategies Some of the most common impediments to financially successful infill developments are: 1. lengthy permitting process 2. inadequate infrastructure 3. inadequate density allowances 4. parking requirements 5. insufficient market demand for infill product 6. inability to obtain project financing. However, policy strategies can be targeted at many of these problems. Policy strategies fall into two basic categories - strategies affecting project gross revenues and strategies affecting project costs. Both can improve a project s bottom line and therefore improve the likelihood that a developer will pursue a project. This study focuses on potential land-use strategies over which planning agencies have control rather than the myriad of financial incentives that other agencies might be able to offer. However, such incentives could be used to cover the gaps that we identify in this report. Density and parking requirements are the tail that wags the dog when it comes to making infill development projects financially feasible. Therefore, we chose to focus on these two regulatory variables and quantify the effects they would have on the gaps described above. 17

18 The unit count (ie density) determines gross revenues and drives the required economies of scale that make projects financially feasible. Density bonuses can provide the extra revenue needed to make projects pencil for developers and investors. Parking requirements, on the other hand, affect project costs. Infill sites most often drive developers to dig to provide the required amount of parking. But subterranean and above-grade Type I podium parking is very costly, especially given the recent spike in construction material costs. Relaxing the number of required parking spaces can significantly reduce these parking costs making a project financially attractive to would be developers and investors. Another important strategy we analyze is the potential for switching land zoned for industrial purposes to residential purposes. In several of the Expo Line station stop study areas, under-utilized industrial land abounds, which speaks to the importance of analyzing this strategy. In so doing we simply use the market price for industrial land in the area to determine the gap, if any, that exists with building the prototypes on industrially zoned land Research of existing incentives A survey of existing policies provides key points to consider when shaping new strategies. As a starting point to vary density and parking regulations we look to the City s own menu of concessions in its version of the State s density bonus law SB1818. Furthermore, we assess current policies regarding density and parking in existing County Transit Oriented Districts (TODs) of the Green and Blue line metro stations. Key points we consider from these two policies are: 1. A straight density bonus of 25% granted to transit-oriented developments within ½ mile of a light- rail station. 2. Parking reductions of 25% and 40% (Green and Blue Line respectively); reduction to not less than 1 parking space per unit regardless of the number of habitable rooms (City Density Bonus Ordinance) 3. Ability to build residential units (within a mixed-use development) in commercial zones by right in City s current zoning allowances. 4. Allowance of mixed-use projects by-right in commercial zones % Density Bonus for the consolidation of lots 6. Density Bonus of up to 35% with affordable units (City Density Bonus Ordinance) 18

19 7. Commercial sf requirements in mixed-use projects 8. Expedited permit processing 9. Reduction of permit fees % deviations from setback, lot coverage, and height requirements 11. Include area of street and alley in parcel density calculations This research led us to start with assessing general infill density increases of 25% in the various zoning classes under which the prototypes would be built - independent of any affordability requirement. We take this a step further and show the effects that density increases of 50%, 75% and 100% would provide. The increase in units per acre are shown along side the percentages in the various charts in section 2-4. In addition we show how parking reductions that are 10%, 20%, 50% and 75% of existing policy would effect infill prototype financial feasibility. The City s parking requirements are: R2 zones 2/unit; R3 zones 1.5 /1 bdrm ; 2 / 2bdrm ; 1 guest / 4units; C zones 1 / 250 sf. The charts in section 2-4 show the subsequent deviations from these numbers that correspond to the respective percent reduction. In choosing to focus on density - not Floor Area Ratios (FARs) - we assume that density increases would go hand in hand with relaxing height and set back requirements that would ultimately require increasing existing FARs. Thus if density bonuses are provided, FARs would be expected to increase accordingly. The City, unlike the County, has an attitude of being over zoned with commercial land and subsequently currently allows residential development by right in its commercial zones. Furthermore, it would permit a 100% residential project up to R-4 levels (108 units/acre) in its C1.5-5 zones. Because of this, a policy that acts to reduce the required commercial square footage in a mixed-use infill development would hold traction in the County, but not the City, and is therefore not analyzed in this study. Finally, discussions with City planning staff and local developers indicate that time to permit/approval for projects within the City s jurisdiction is not of great concern. Unlike many other jurisdictions, development projects in the City generally are maneuvered through the permit process in 3 to 12 months depending on degree of entitlement a very acceptable time to permit and one that does not adversely affect developers. We therefore choose not to look at the impact of an expedited permit process since it would have a negligible impact anyway. 19

20 2-4. Comparing the Impacts The results of this preliminary analysis are shown below for prototypes 1 through 3. The 0% policy change in each of the following charts represents the feasibility gap under existing zoning (i.e. density), setback, height and parking policies. In each case, a reduction in the feasibility gap to zero or below would grant the project the necessary 15% net margin the development industry expects and is therefore considered to stimulate development Prototype 1 Townhouse Project Chart 4.1 Effects of Density Changes - Prototype #1 (land zoned R2) u/ac (current density) 23 u/ac (25% increase) 26 u/ac (50% increase) Feasibility GAP ($) % Change in Allowed Density Surrounding all five of the Expo Line station stops, mostly between ¼ and ½ mile distances, we identify many opportunity parcels with assemblage potential to yield Prototype 1 projects that is, parcels 0.17 acres in size (approximately 50x150) adjacent to one another with R-2 zoning passing our second infill screen. Assemblage of two 50 x150 lots with existing R-2 zoning would only produce 5 units. Significant potential to stimulate development of 8-10 unit townhouse projects exists with a change in policy to allow a 50% density bonus. 20

21 It should be pointed out that the City s current small lot or townhouse ordinance allows for townhouse development in multifamily R-3, and R-4 zones. However, we identify very few R-3 and R-4 opportunity parcels in the study areas. This would indicate that the small lot ordinance will not adequately incentivize townhouse development in the R-2 zones surrounding the station stops. Instead an up-zoning of R-2 parcels would achieve the desired results. 21

22 Prototype 2a Small Mixed-Use Project Chart 4.2 Effects of Density Changes - Prototype #2a 400, , u/ac (current density) 67 u/ac (25% increase) 81 u/ac (50% increase) 94 u/ac (75% increase) 108 u/ac (100% increase) Feasibility GAP ($) -200, , , ,000-1,000,000-1,200,000-1,400,000 % Change in Allowed Density (units/acre) in Commercial (CM, C1) Zones in Industrial (M1, MR1) Zones Chart 4.3 Effects of Parking Changes (Prototype #2a) 400, , ; 250 (current policy) 1.38 ; 319 (25% decrease) 0.92 ; 461 (50% decrease) 0.46 ; 829 (75% decrease) Feasibility GAP ($) -200, , , ,000-1,000,000 in Commercial (CM, C1) Zones -1,200,000 in Industrial (M1, MR1) Zones -1,400,000 % change in Parking Policy (# of stalls / residential unit ; commercial sf / 1 stall) 22

23 Chart 4.2 demonstrates the significant gap that exists for mixed-use projects having the size, bulk, and scale of similar all-residential developments between 20 units and 40 units. As mentioned earlier, this gap is due not to the lower valued retail space, but, rather, to the high cost of providing parking (both above and below grade) for this type of mixed-use building. The City is considering future re-zones of industrial land to allow mixed-use residential alongside light manufacturing. We therefore also analyze the gap and policy effects for small and large mixed-use projects on industrial land. A large density bonus alone will not act to reduce the gap to zero. Even with a 100% density bonus, a gap of nearly $700,000 is still prevalent. In this case the unit count is still too small to offset the expense of building a podium-style below-grade parking structure and meet the required 15% net margin. This is a rather significant finding and is supported by field research with developers who have time and time again emphasized their desire to focus on projects with unit counts of 50 or more the threshold at which revenues from additional units effectively offsets the costs of expensive high density construction. Thus, prototype 2a (and also 2b as the results will show) - are unlikely to be feasible due to lower unit counts. However, extrapolating from Chart 4.2 would indicate that projects similar to 2a with density bonuses of around 150% - that is, projects with 50 or more units, are likely to be feasible. This could be accomplished if allowable densities in the C-1 and C-M zones were increased from 54 to at least 108 units/acre. This policy suggestion is especially important given the fact that there are significantly more parcels of C-1 and C-M zoning with smaller size (i.e acres and below) that would generate unit counts of 50 or more than there are of parcels of larger size. Density bonuses of this magnitude targeted to C-1, and C-M parcels of this size should align with existing Firecode, height restrictions and FARs. However, a reduction in parking ratios shows a even more dramatic results. Comparing the rate in change illustrated in Chart 4.2 versus Chart 4.3 demonstrates the effect parking reductions can have on financial feasibility compared to the limited effects of density increases. For example, decreasing the parking requirement to 50% of the number of stalls currently required would act to decrease the gap to $400,000 while a 50% density bonus would only reduce the gap to just under $1 million. With this in mind, Prototype 2a, even with 150% density bonus, is unlikely without any change in parking requirements. A valuable policy alternative is a synergy of modest density and parking strategies that act together to reduce the feasibility gap to near zero. As results indicate, a 75% density bonus combined with a 50% parking reduction are likely to incentivize developers to pursue infill projects of this size. 23

24 On the other hand, real policy opportunity rests in allowing mixed-use projects at the unit size on parcels with industrial zoning. For example, from Charts 4.3 and 4.4 we can conclude that a 30-unit project built on a 0.37 acre industrial parcel (ie density levels that are 100% above what is currently allowed on R-3 parcels) are close to meeting the developer s profit expectations certainly within the accuracy of our model assumptions. Modest parking reductions of 25-50% for these projects on industrial land show significant impacts. 24

25 2.4.3 Prototype 2b Small Condo Project Chart 4.4 Effects of Density Changes (Prototype 2b) 500,000 Feasibility GAP ($) 0-500,000-1,000,000-1,500, u/ac (current density) 67 u/ac (25% increase) 81 u/ac (50% increase) 94 u/ac (75% increase) 108 u/ac (100% increase) in Residential (R3) Zones in Commercial (CM, C1) Zones -2,000,000 % Change in Existing Policy (# units/acre) Chart 4.5 Effects of Parking Reductions (Prototype 2b) 500,000 Feasibility GAP ($) 0-500,000-1,000,000-1,500,000-2,000, (current policy) 1.35 (25% decrease) 0.88 (25% decrease) 0% 25% 50% 75% % Change in Existing Policy (# stalls / residential unit) 0.47 (50% decrease) in Residential (R3) Zones in Commercial (CM, C1) Zones 25

26 City policy currently allows for all-residential projects in C-1, CM zones. We therefore explore Prototype 2b (an all-residential 20-unit project) in R-3, and C-1, C-M zones. Chart 4.4 illustrates the differences in building a 20 unit all-residential project on land with these different zoning classes. Our market analysis showed that whereas land values in R-3 are approximately $75 per square foot, land values are approximately $55 per square foot in Commercial zones. As expected, the trend shows a sizable gap difference in building a 20-unit project on land zoned R-3 versus land zoned commercial. As with Prototype 2a, a density bonus on the order of 150%, one that would permit a project size of 50 or more units, would make the project pencil. Since we identify very few R-3 opportunity parcels in our GIS screens (actually no single R-3 parcels of adequate size, only a limited assemblage opportunity of 14 areas), a density bonus targeted to R-3 parcels will achieve limited success. Again a synergy of parking and density strategies would act to make Prototype 2b projects more feasible in the two zoning classes. However, the combination of policies would appear to be the most effective on commercially zoned land. For example, an all residential project of 21 units (25% density policy change) on a C-1 parcel with a 25% parking reduction would bring the gap to zero. 26

27 2-4-4: Prototype 3a - Large Mixed-Use Project Chart 4.6 Effects of Density Changes (Prototype 3a) 500, u/ac (current density) 135 u/ac (25% increase) 162 u/ac (50% increase) 189 u/ac (75% increase) 216 u/ac (100% increase) Feasibilty Gap ($) -500,000-1,000,000-1,500,000-2,000,000 % Change in Allowed Density (units / acre) in Commercial (C1.5 - C4) Zones in Industrial (M1, MR1) Zones Chart 4.7 Effects of Parking Changes (Prototype 3a) 500, ; 250 (current policy) 1.57 ; 275 (10% decrease) 1.40 ; 310 (20% decrease) Feasibility Gap ($) -500,000-1,000,000-1,500,000-2,000,000 in Commercial (C1.5 - C4) Zones in Industrial (M1, MR1) Zones % Change in Parking Policy (# stalls / residential unit ; commercial sf / 1 stall) 27

28 Charts 4.6 and 4.7 demonstrate that Prototype 3a (large mixed-use project) is similar to Prototype 2a (small mixed-use project) in its financial results. A sizable gap exists even with relatively large density bonuses. The increase in revenue from additional units is not enough to offset the increase costs associated with providing the additional parking. Thus policy strategies focused on density bonuses alone for C1.5-C5 land are likely to meet with little success. This is especially the case since a large density bonus (> 150%) on land zoned C1.5- C5, which currently allows unit counts of up to 108 units/acre, is likely to require significant changes to City fire codes. The most promising results for Prototype 3a are found in Chart 4.7. The feasibility gap appears to be quite sensitive to very modest reductions (10%-20%) in parking requirements. In the mixed-use prototype 2a the gap dropped to zero with 75% parking reductions; in prototype 3a parking reductions of only 20% bring the gap to just below zero. The larger mixed-use projects with considerable parking challenges typical of prototype 3a show considerable sensitivity to parking reductions. Policy attention should focus on strategies that act to reduce the parking requirement by roughly 20% for parcels with C1.5 C5 zoning. Especially important is the opportunity for large mixed-use projects on industrially zoned land. While the gap difference generally reflects the difference in land costs between commercial and industrial, significant potential still rests for mixed-use projects alongside light manufacturing in these zones. Furthermore, projects of this size can be accomplished with only very modest density allowances and parking reductions 50% and 10% respectively. 28

29 2.4.5 Prototype 3b - Large Condo Project Chart 4.8 Effects of Density Changes (Prototype 3b) 1,000, u/ac (current density) 135 u/ac (25% increase) 162 u/ac (50% increase) 189 u/ac (75% increase) 216 u/ac (100% increase) Feasibilty GAP ($) -1,000,000-2,000,000-3,000,000-4,000,000-5,000,000-6,000,000 % Change in Existing Policy (units/acre) in Residential (R4) zones in Commercial (C1.5 - C4) Zones Chart 4.9 Effects of Parking Changes (Prototype 3b) Feasibility GAP ($) 1,000, ,000,000-2,000,000-3,000,000-4,000,000-5,000,000-6,000, (current policy) 1.32 (25% decrease) 0.88 (50% decrease) 0% 25% 50% 75% % Change in Exisitng Policy (# stalls/unit) 0.44 (75% decrease) in Residential (R4) Zones in Commercial (C1.5 - C4) Zones 29

30 Prototype 3b again shows the dramatic influence of a reduction in parking strategies as opposed to an increase in density. Chart 4.8 illustrates a sizable ($3 million) gap even with 100% density bonus. The parking costs from additional units simply rise at a rate that cannot be offset with increased revenues from extra units even if it is almost twice the number of units! Chart 4.9 shows the now-expected trend that parking reductions are much more effective at reducing the feasibility gap to ultimately encourage development. However, unlike the mixed-use Prototype 3a, Prototype 3b has a much greater initial gap ($5 million) and is less sensitive to reductions in parking. This is most likely due to the higher land costs ($85/sf) associated with building Prototype 3b on land zoned R-4 versus commercial land ($55/sf) upon which Prototype 3a is built. Parking reductions of 75% would significantly reduce the gap but would prove politically difficult, whereas 50% parking reductions may have more political traction. As was the case with Prototype 2b, we also explore the potential of building allresidential 3b projects on commercial land. As expected, the gap is less which is a reflection of lower land costs. The policy changes have the impact such that a 3b project would make economic sense at very manageable densities and parking requirements. Therefore, allowing large high-density residential projects such as that shown in our prototype 3b on all commercial parcels (not just C1.5-5) is policy that deserves future attention. This is especially important given the fact that we identify zero opportunity parcels of adequate size with R-4 zoning. Thus all potential opportunity for a prototype 3b project would have to come from parcels with Commercial zoning. 30

31 2-5. Summary Infill development is often easier said than done a statement to which both builders and City planners will attest. In this study we ask the central question: What is the financial feasibility gap associated with typical infill projects of various sizes and under various zoning classes, and what would be the fiscal impact of different regulatory strategies? The goal was to use the answers to this question to generate a list of practical and implementable policy options. While there are many variables affecting infill development, we focus on the two seemingly most important density allowances and parking requirements. We found reduced parking requirements to have a greater impact upon reducing the feasibility gap associated with the majority of infill prototypes. In certain situations 20-25% reductions in parking will suffice, but in others a more significant 50% reduction is needed. A key political question is whether City leaders will implement parking policies that act to reduce the number of parking spaces to below 1 per unit, which is currently the floor in the menu of concessions in the City s density bonus law. For example, in certain areas of San Francisco, a much more transit-rich city, the floor is 0.3 spaces per unit. Modest density increases show only a marginal impact upon a project s bottom line; however, gains can be made with significant up-zones of % on R-2 and medium-density commercial parcels. It should be pointed out that these kinds of up-zones would allow 50 unit projects on the smaller parcels which abound in the study areas. Furthermore, a density bonus must go hand in hand with relaxing height restrictions and FARs; in many cases a density bonus would do no good as infill projects are at the height limits under R-2, R-3 zoning classes. Real policy opportunity rests in a synergy of both parking reduction and density increases. Together these two policy knobs can be turned, to politically tractable degrees, and result to encourage infill development. In general, we found that a 25% - 50% parking reduction accompanied by a 50% - 75% density bonus would effectively reduce the gap to zero and stimulate development. Finally, significant potential exists for mixed-use projects of all types on under-utilized industrial land. Our results illustrate projects of medium and large unit counts are easily encouraged with modest deviations from existing parking requirements. The City should consider policies that allow these mixed-use projects to exist alongside lightmanufacturing uses in the EXPO study areas. 31

32 3. Opportunities At Each Station 3.1 La Cienega Station (Council District 10) The ¼- and ½-mile area surrounding the intersection of Exposition and La Cienega has the greatest potential for infill on underutilized industrially zoned land. Indeed as much as 25% of the existing land use in this area is industrial and light manufacturing more than any of the other five station stops (Chart 3.1). This speaks to the policy consideration of re-zoning industrial land to commercial to provide for a mix of light manufacturing uses along side mixed-use residential projects. Chart 3.1 0% La Cienega Land Use Mix 0% 1% 4% 3% 3% 3% 2% 0% 27% Res 1 Unit Manufacturing Unknown Utility/Munici 5% Commercial Res 2-4 Units Res 5+ Units Office 13% Vacant Parking Lot Auto 14% 25% Institutional Mixed-Use Rec. - Comm. Industrial infill opportunity parcels abound in the ¼-mile buffer to the northwest and east of the planned station stop as Map 3.1 indicates. Furthermore, these parcels are large in size and located in a State Enterprise zone. Specifically, the acre, industrial parcel on the northwest corner of Exposition Blvd and La Cienega, is currently the home of KSPN AM radio. As the majority of this parcel is vacant, with an improvement ratio 1.07, it is from our perspective under-utilized and would certainly be considered a prime 32

33 opportunity site if the Expo Line station. This would be an ideal infill redevelopment site for a high density mixed-use project similar to Prototype 3a. Additional commercially zoned opportunity parcels with considerable residential density potential exist immediately to the north of the station stop along the eastern commercial strip of La Cienega. The obvious opportunity rests in the.7 acre corner commercial lot as well as some assemblage opportunity directly north. These parcels would speak to potential for infill Prototype 2a, or 3a with some assemblage. As the policy analysis indicates, in order to encourage development of these sites modest parking and density policy changes would need to occur. Behind this commercial strip within the ¼-mile buffer, in the residential area, there is very limited infill opportunity. However, to the northeast, a cluster of medium density residential parcels shows assemblage opportunity to yield Prototype 1 townhouse projects with the requisite up-zoning to allow 8-10 unit counts. Table 3.1: Summation of Opportunity Parcel Statistics Zoning Type Parcels Acres Avg. Parcel Size Min. Parcel Size Max. Parcel Size Exisitng Res. Units Remaing Capacity C C CM R R RD RD Grand Total M MR Grand Total

34 Map 3.1: Opportunity Sites in La Cienega Study Area 34

35 3.2. La Brea Station (Council District 10) The La Brea Avenue study area tells a similar story to that of La Cienega in terms of opportunity on industrial land. However, it is unique in that it has the largest amount of high-density residential development (15% of the land area, as Chart 3.2 shows, compared to only 3% in either La Cienega and Crenshaw). A critical mass of highdensity residential is essential to encourage developers to pursue mixed-use projects with retail components. Chart 3.2 La Brea Land Use Mix 12% 7% 14% 6% 2%1%1%0% 0% 26% 16% Res 1 Unit Unknown Res 5+ Units Res 2-4 Units Utility/Munici Commercial Manufacturing Institutional Office Parking Lot Vacant Auto Hotel Mixed-Use 15% As Map 3.2 shows, industrial opportunity in the immediate vicinity of the intersection of La Brea and Exposition appears to be limited. The large industrial parcel on the southeast corner, though looks to be fairly utilized and thus would not offer immediate infill potential. Just south, two grocery stores (Ralphs and Albertsons) and a commercial mall, lie on the southern opportunity parcels and tell a similar story. Removing grocery stores in a high-density residential area seems unlikely. However, the abundant surface parking 35

36 and one-story buildings mean that mixed-use development could occur in the future without sacrificing the supermarkets and other retail. Moving to the south western quadrant of the La Brea study area, no infill potential exists. This area is already zoned for and has in place high density residential neighborhoods. This area provides the basis to our point made above that La Brea has the greatest existing residential density of any study area that would support mixed-use. The real promise in the La Brea study area lies in the wedge of industrial land between Exposition Blvd and Jefferson Ave. directly northeast and northwest of the station stop. This area is especially worthy of attention because of its designation as both a CRA and State Enterprise zone. Re-zoning to commercial to provide for mixed-use would likely encourage redevelopment of projects similar to small and large mixed-use Prototypes 2a and 3a. However, the parcels are not large lots, but rather smaller individual parcels. This would indicate that facilitation of land assembly in this immediate area would be needed to encourage infill in this area. Again, parking reductions on the order of 25 to 50% are likely to be needed to encourage this kind of development. As will also be shown in the Crenshaw study area, significant opportunity exists for Prototype 1 townhouse projects in the entire northern portion of the study area. Finally, La Brea has an additional amenity that would encourage infill. Dorsey High School to the south east of the future station has immediate access to green space and recreational opportunities, and is another key component when developers and future home buyers alike are considering where to develop and where to buy. Table 3.2.1: Summation of Opportunity Parcel Statistics Zoning Type Parcels Acres Avg. Parcel Size Min. Parcel Size Max. Parcel Size Exisitng Res. Units Remaing Capacity C C CM CR R R R RD RD Grand Total M Grand Total

37 Map 3.2.2: OPPORTUNITY SITES IN THE LA BREA STUDY AREA 37

38 3.3 Crenshaw Blvd Station Unlike La Cienega and La Brea, the Crenshaw study area is dominated by low-density residential, with 70% of the land area currently built to low - and medium-density residential standards (including 56% single-family). (Chart 3.3 residential as shown in chart Crenshaw also differs from the previous station areas in that there is limited potential industrial land. Chart 3.3 1% 0% Crenshaw Land Use Mix 1% 3% 2% 2% 2% 0% Res 1 Unit Res 2-4 Units Utility/Munici 3% Commercial 5% Manufacturing Institutional Res 5+ Units 5% Parking Lot Auto 6% 56% Vacant Unknown Office Mixed-Use 14% Hotel In particular, the Crenshaw has significant opportunity along the commercial corridors of Crenshaw Blvd and Jefferson Av. The corners to the northwest, southwest, and southeast all present infill potential similar to small and large mixed-use Prototypes 2a and 3a with a modest 20% reduction in parking requirements. 38

39 The northeast corner is currently dominated by the West Angeles Church of God in Christ Cathedral, built in Due east of the church, however, are two parcels with significant infill potential one 2.8 acre City owned, and the other 3.8 acres owned by the Southern California Gas Company. We indicate the City parcel as an opportunity, but not the Gas Co. parcel because of its public utility designation. However, further inspection of this site shows the parcel to not be under intensive utility usage, but rather a low intensity parking lot for support vehicles. If the City and Gas Co. were to consider alternative uses for these sites a significant infill opportunity would present itself in close proximity to the future station stop. As mentioned, many parcels with high-density commercial zoning with in the commercial strips present assemblage opportunity. However, these parcels would need to be assembled due to their small sizes in order to make infill Prototypes 2a and 3a pencil. Like La Brea, the northern portion of Crenshaw holds extensive assemblage opportunity of small R-2 parcels for developments similar to townhome Prototype 1. It is possible many of these parcels could see future development if a density bonus policy of 50% is enacted to allow unit counts of 8 10 on the R-2 parcels. Table 3.3.1: Summation of Opportunity Parcel Statistics Zoning Type Parcels Acres Avg. Parcel Size Min. Parcel Size Max. Parcel Size Exisitng Res. Units Remaing Capacity C C CM R R R RD RD RD Grand Total M Grand Total

40 Map 3.1: Crenshaw Area Opportunity Sites 40

41 3.4 South Western Ave. Station Similar to the Crenshaw area, the future South Western Ave. station stop would be located in a predominantly low-density residential neighborhood with over 80% of the land area dedicated to this use. As Map 3.4 indicates, extensive opportunity for the townhouse prototype exists throughout the ½ mile study area. Chart 3.4 Western Land Use Mix 6% 31% 3% 3% 1%1%1%1% 1%1%0%0% 0% 51% Res 1 Unit Res 2-4 Units Utility/Munici Res 5+ Units Commercial Institutional Auto Vacant Mixed-Use Rec. - Comm. Unknown Parking Lot Hotel Office Manufacturing In this area, the real opportunity for infill development in this area lies not along Exposition Blvd, but rather along the commercial strip of Western Ave both north and south of the Exposition intersection. The opportunity sites are all small commercial parcels with the potential for unit projects similar to Prototype 2a. With a significant degree of assemblage, a greater unit count Prototype 3a is possible too. All four corners immediately surrounding the future station stop have potential for mixed-use prototypes in the unit range, but this would require some degree of 41

42 assemblage. The large parcel dominating the north east corner is a middle school, which would preclude any significant infill opportunity. Map 3.2 also shows several clusters of opportunity on high-density residential parcels. These areas are currently used for lower-density single-family units and have been rezoned to higher density R-4. This would indicate near future assemblage opportunity for large condo Prototype 3b projects with the requisite 25-50% parking reductions. 42

43 Table 3.4.1: Summation of Opportunity Parcel Statistics Zoning Type Parcels Acres Avg. Parcel Size Min. Parcel Size Max. Parcel Size Exisitng Res. Units Remaing Capacity C C R R R RD RD Grand Total

44 Map 3.4: South Western Avenue Opportunity Sites 44

45 3.5 South Vermont Ave. Station The intersection of Vermont and Exposition is located adjacent to the University of Southern California, meaning USC is a key player in this area. In fact, the university represents 31% of the land in our study area. Many of the parcels in the multi-family area (Res 5+ Units) are likely owned by the University as well. Chart 3.5 Vermont Land Use Mix 0% 12% 14% 9% 2% 1% 1%1%0%0%0% 0% 15% 31% Institutional Utility/Munici Rec. - Comm. Res 2-4 Units Res 1 Unit Res 5+ Units Commercial Vacant Unknown Office Parking Lot Hotel Auto Mixed-Use Manufacturing 14% To the west of Vermont are many high-density residential opportunity parcels that hold potential for Proptotypes 1, 2b and in some cases 3b projects. Directly south west of the station stop is an existing gas station, but behind this is a set of vacant parcels that would indicate potential for a unit mixed-use project. Opportunity also exists for a similar sized project on the 0.55-acre site on northwest corner. South, and outside the ¼ mile buffer lie a series of parking lots for the Coliseum and the Exposition Park and owned by the Park s controlling agency (the Sixth Agricultural District). The eastern lots (not shown on Map 3.5) are zoned for parking and public 45

46 utility. However, the western parking lots, along Vermont, are in fact currently zoned for medium-density residential. In theory these would present an interesting opportunity for mixed-use infill development, though other priorities may prevail in this area. Table 3.5 Zoning Type Parcels Acres Avg. Parcel Size Min. Parcel Size Max. Parcel Size Exisitng Res. Units Remaing Capacity C C R R R RD RD Grand Total

47 Map 3.5: South Vermont Avenue Opportunity Areas 47