Episode 59: The Costs of Discretion with Paavo Monkkonen and Mike Manville

Shane Phillips 0:04
Hello, this is the UCLA Housing Voice podcast, and I'm your host, Shane Phillips. After a short break, we are back with our latest episode. This one is an all-Lewis Center special with me, Paavo, and Mike Manville and we're talking about a study we published earlier this year, comparing approval timelines for discretionary and by-right projects, and the consequences of slow and uncertain approval processes for housing production, affordability, and public trust. In many cities, it can take years to receive approval for a standard apartment development, and that time imposes real costs, both in less housing overall and higher costs for whatever does get built. Discretion is a form of subjective decision-making that can increase these costs by adding uncertainty, introducing the possibility that a project proposal might be rejected and hundreds of thousands or millions of dollars wasted, or that city officials will make unforeseen demands that turn a potentially profitable development into a sure loser. Discretion has become widespread in urban planning over the past 50 years or so, and there are some valid reasons for that. But more and more cities are reducing or eliminating discretion from the approval process and shifting to what's known as by-right, or ministerial approvals, and one such case occurred in Los Angeles six years ago. In this conversation, we get into the arguments for and against discretion and the challenges to studying it, and we share our findings on how increasing use of by-right approvals resulted in shorter and less variable timelines, and how affordable housing developers were arguably the biggest beneficiaries of the reform. The Housing Voice podcast is a production of the UCLA Lewis Center for Regional Policy Studies, with production support from Claudia Bustamante. We always appreciate your feedback and questions, which you can send to shanephillips@ucla.edu. We also, of course, appreciate positive reviews and when you share the show with your friends and colleagues. Thanks to everyone who's helped the show continue growing. With that, it is good to be back, and let's get to our conversation with Mike and Paavo.

Mike Manville and Paavo Monkkonen are professors of urban planning at UCLA, and they are with us as guests, not hosts, today to talk about recent Lewis Center research comparing discretionary housing approvals to ministerial or by-right approvals, with a case study here in Los Angeles. Mike and Paavo, thanks for joining us, and welcome to the Housing Voice podcast for roughly the 20th time.

Michael Manville 2:46
It's great to be back.

Paavo Monkkonen 2:48
Yeah, it's great to podcast with both of you. And I'm excited we finally get to tell our listeners about the importance of measuring the threshold for site plan review after applying the density bonus instead of before.

Shane Phillips 3:00
Yes, that's what we've been waiting 60 episodes to finally do.

Michael Manville 3:04
There's no doubt this is our sexiest episode.

Shane Phillips 3:07
I am the only host today, and I'm an author on this, so I'm pretty familiar with the actual study. We'll do our tour as usual, but Paavo we'll just limit it to you this time, because you are on sabbatical in Lyon, France and you've been there a month or two? How's it going? What's stood out so far?

Paavo Monkkonen 3:26
Great, it's going great. I'm thinking about it as the San Diego of France. You said only three minutes of the tour of Lyon, France, I'm just going to give you a couple fun facts and housing things. So it's, you know, the obvious is that there's a lot to be said for a place with a great bike share system and safe cycling conditions. That's kind of one of the biggest shocks to my daily movement compared to LA. But also I think there's a lot of interesting differences between the US and France in terms of kind of conditions of inequality and cities and racial stratification and like the culture around different, you know, topics of planning that we care about, like fair housing, to fun facts about Leon. It's the birthplace of not only the Roman Emperor Claudius, of the famous I Claudius, who was pretty cool. It was the first emperor born outside of Italy. And he also kind of broadened the Senate to include people born outside of Italy, as well as John Claude Decaux, who urbanists might be familiar with as JC Decaux. The company started in Lyon in the 70s.

Shane Phillips 4:33
Why would urbanists be familiar with him?

Paavo Monkkonen 4:36
Because you might have seen that on a bus stop near you. Yeah, bus stops and I think airplane airports and train stations.

Shane Phillips 4:45
Sometimes blamed for Los Angeles having not enough bus shelters because we are contracted with them and they are actually the ones who are supposed to to build them.

Paavo Monkkonen 4:54
Yeah, I mean, it's a... it's a mixed bag, as with everything. I think he innovated on the public private partnership that then created this culture of like not wanting to invest in bus stops.

Michael Manville 5:07
In some ways he's like the stepfather of La Sombrita.

Paavo Monkkonen 5:16
I'm trying to think of how to say hat in French housing stuff. I mean, there's a lot of fascinating stuff happening here recently in France, like they've been moving on metropolitan governance in a way that might be interesting to people in LA or California that are following our efforts to do regional governance. And Leone is like the most famous case in France, as in 2015, they created metropolitan governments across the country and big in big urban areas. And in Lyon, they have an elected president of the Metropolitan Council, like directly elected in 2020. So that's like a dream that we have had about our regional government that we don't see happening in the near future. And then I guess just the housing thing that has been very interesting to me lately is they're trying to do environmental policy through housing, as many people do. They've passed this law where the starting this year as of January 2023, you can't rent out apartments that are really low on energy efficiency. So like in an effort to get landlords to upgrade apartments, they're slowly phasing in this policy where you can't rent really energy and efficient housing units out. And so that's like a classic like, we that sounds like good from an environmental policy perspective. But like, everyone that cares about housing affordability, he's like, wait a minute, so you're just gonna lose Presumably, the least expensive rental units? Because you can't rent them out anymore. And so TBD, I'll let you update you when I learn more on what's happening because of that.

Shane Phillips 6:44
I anticipate mixed results.

Michael Manville 6:47
Yeah. That didn't New York has been pushing a similar type of law for it's condos and Co Ops. And the fear, of course, is that on the margin, you just push people to places where the housing is more energy efficient, and everything else is more energy intensive. Right. So you go live in Westchester County and a newer house, but then you don't want to hear it and that the atmosphere doesn't care where the carbon comes from.

Paavo Monkkonen 7:10
Yep. Need a holistic approach to planning about that?

Shane Phillips 7:14
So the article we are talking about today was published earlier this year in the Journal of the American Planning Association, which Pavo made fun of me for calling the big show.

Paavo Monkkonen 7:25
japa is a prestigious outlet.

Shane Phillips 7:27
It is prestigious, and it's titled does discretion delay development, the impact of approval pathways on multifamily housing is time to permit AI for the first maybe really useful application of chat GPT. So far, for me, I was able to extend this title to does discretion delayed development, or do deliberate decisions divert disaster, we will find out, Mike and Pavo are authors on this one, along with yours truly, and Nolan Gray, who is in the PhD program here at UCLA and who we talked to for another episode, in Episode 27. Big picture. This study looks at the time and uncertainty costs of reviewing proposed housing developments through a subjective discretionary process compared to an objective by right process. We found that discretionary projects were significantly slower, and approval timelines were less consistent than by right projects. And while that might seem obvious, it turns out to be pretty difficult to prove for reasons we'll discuss. longtime listeners may remember our interview with Mindy Kim in episode eight, where she shared her research comparing public benefit exaction programs in Boston, and Seattle. She found that even though Boston's process was negotiation based, meaning approvals were highly discretionary. housing projects were approved faster than those in Seattle, which had a pre approved exaction schedule that was objective and standardized. That seemed counterintuitive, and it's part of what interested us in the study. But as Professor Kim explained, neither City's full approval process was truly by right. Even though Seattle had by right exactions projects often had to go through other approval processes that were discretionary. And the city's Design Review Board came up as a particularly big discretionary hurdle. We had been thinking about how we could do a cleaner comparison of discretionary and by right processes. And it occurred to us that a recent policy adopted by Los Angeles might be our best opportunity. turning this over to our lead authors. Could you give our listeners a bit more background on what distinguishes a discretionary process from a bi write one? And tell us why it's been such a challenge to compare them in a scientifically rigorous way?

Paavo Monkkonen 9:43
Sure, I guess I'll start and then Mike can fill in the things I've missed, you know. So basically discretionary means that there is deliberation and a vote usually by a planning commission or the city council itself on whether a proposal for multifamily housing can go forward through What we call the entitlement process. So many people don't realize that multifamily projects require permission from both the City Planning Department to ensure that they comply with the rules of zoning and the Department of Building and Safety, which does the actual permitting. So we talked about permitting housing units before the permitting gets to even be considered the there's a review by the City Planning called entitlement. And so, you know, under a buyer, right, or ministerial version, city planning staff review the project, and if it complies with the rules of zoning, it goes forward, they just sign off on it. So it's a much quicker and less uncertain process. You know, the big challenge in setting how the discretionary processes which you know, go through a vote differ from Ministry of processes is that very few multifamily projects are permitted through ministerial or by right processes, right. So most, especially larger housing developments are approved are entitled through discretionary process. So, you know, we don't have a lot of cases to compare. The other challenges that were multifamily housing does go through by process, probably more of it will be going through that process. And it will be the smaller buildings, right, rather than larger buildings. So often, you'll have this indigeneity, if you will, between the size of the project and the type of process through which it's entitled. And so the challenge of finding big projects that were entitled through it by right in the same city as big projects that were entitled through discretionary process is very difficult.

Shane Phillips 11:32
Okay. And so why should we care about whether the approval process is discretionary or ministerial or subjective versus objective? If we assume by right approvals are something like a checklist approach where a project is approved, if it checks all the boxes laid out ahead of time, by various city policies, I do think it's pretty clear why approvals may be slower for a discretionary process with discretionary approvals on the other hand, developer can propose a project that is code compliant, and still have to go through a bunch of public meetings where they may have to change aspects of the project, like its height, or its density or its parking, or they may have to get buy in from neighbors in one way or another, or provide some additional public benefits, like more below market units or open space. So I think it's clear, you know, why discretion may slow projects down, just getting through that process. And most people would agree it is better to have housing built sooner rather than later. But aside from time, discretion, can also increase uncertainty and, you know, monetary costs and ultimately make housing less affordable. So how does that work?

Michael Manville 12:42
Yeah, I mean, I think there's a there's different aspects to this, the end. One thing to say from the beginning, is that I think it's intuitive to a lot of people that a bioroid process is going to be faster. It doesn't have to be, you know, what by right is saying is that like, as long as you meet the following conditions, as a developer, you zip right through entitlement, and you go to the building department, conceivably, a city could have an extremely long list. Right, that that's actually very hard to meet. But I think in practice, what we see in this is it goes I think, in part to some of the endogeneity problems that pop up raised, when you do a buy write the list actually is is not that long and complicated compared to what happens with a discretionary review.

Shane Phillips 13:26
Because the city is interested in approving housing quickly.

Michael Manville 13:30
There's, there's there's this and I think we'll get into this when we talk about sort of the way we designed our research, it's very hard to separate, a desire to Fast Tracks more housing and get more done from a desire to go ministerial. And that's one reason why these inter city comparisons are often difficult to if you do find a city that permits a lot of multifamily housing by right, it's very difficult to then compare it to San Francisco, right? Because there's just you know, Houston and San Francisco, for example, are just very different places. And that's sort of a confound that that arises with these inter city comparisons. But to sort of get back to the meat of your question. You know, one of the big things that arises beyond just time is uncertainty. You know, property development is fundamentally a pretty risky venture. It's risky for the developer. It's also the developer has to convince their financer to front the money to actually move forward with this. And one of the things these financers who are at the beginning at the beginning of the project, they're going to be sort of equity lenders and then maybe a bank down the road. They're going to want to know what the worst case scenario is. Right? They it's, which is understandable. You know, you obviously, a big part of your projections are kind of like, well, we get this building built, here's what the rents are, here's my most likely return, but you wouldn't be doing your due diligence. If you didn't say like, Okay, well, what else could happen? What could go wrong? What are my risks? And when you have a discretionary process when you sort of open the door or, and we'll talk more about this, I think when we talk about how discretion actually works, when you open the door to a city government just introducing at various points in the permitting process unforeseen conditions, the most common one perhaps is like, can you set aside a certain amount of your units for affordable housing, but they really run the gamut, you know, for lack of a better way of saying it that that can that can scare a lender, they might say, well, this, you know, you're telling me, I have to front this money. But it may be that sometime between now and the time you get the permission to build our costs go up 30%, or something like that. And so when discretion is sufficiently complicated, and unpredictable, it's not just that time can go on, but which of course it can, and that becomes more expensive. And it's not just that your labor costs rise, because you're hiring attorneys, and consultants and so forth. To do all this negotiating, you could also reach a point where the conditions being laid down by the city are sufficient to just kill the project. And if one project hits that point, probably there's three or four that were waiting in the wings that people decide not to move forward with, because everybody sees what happened to that proposal and decides not to pull the trigger on on the ones they were, they were entertaining.

Paavo Monkkonen 16:19
I mean, just to add on this uncertainty thing, I think you can also create a context in which, you know, the existing zoning of a parcel is kind of an entry point for what's possible, but if every project is deviating from that zoning, you know, developers are gambling almost on what they can get away with, in terms of how big or how much density for a parcel. And so, you know, you kind of lose the point, I mean, I think it's just funny to think about, we have all these comp especially in LA, a very complex set of very specific rules about what you can build on a piece of land. But that's not actually what you can build on a piece of land, right. So you create this situation of uncertainty downward, in some sense, where you get, you have to, you know, pay off the city in various ways, or maybe not even get approved, but also upward, right. So in some parts of the city, maybe you can get much more bulk in your building.

Shane Phillips 17:11
Yeah, I do want to underline that point about the cost of uncertainty in the projects that don't go forward. Because I think it's not really appreciated how, if you don't know, if the cost of some exactions, some demand made by the city, a common one that has happened here in Los Angeles lately is you hear about the Department of Water and Power requiring, you know, some large investment in the mostly public infrastructure, but it could cost you, you know, $1,000,000.02 million dollars, depending on the size of your project. If you don't know if that cost is going to be $50,000 or $2 million, as like a responsible developer, you have to go into that project, or the planning for that, assuming the worst. And if you can't afford a $2 million cost, the project just will not be proposed. And in other kinds of industries, I think you might be able to kind of take those risks and have it average out if the average cost is $200,000. And sometimes it's 50. Sometimes it's 2 million, but it's 200,000. On average, if you're just doing dozens of projects every year, then it's probably going to be fine. But development is a really kind of intensive use of your time. And so you might only do a project every few years. And so if one goes poorly, the city or whomever demands more than you expect, then that can completely just kill your business. Because three years of work is just down the drain, you've lost your investors money, and and you're probably not going to easily get it again for the next project.

Michael Manville 18:52
That's right, I think sort of related to that is this idea that there's a lot of uncertainty in development, you know, you might start doing your building and realize you have to underpin the building next door, or that the excavations harder and things like that. But one thing that makes the exactions that arise in the discretionary approval process a little different from a cost more than you anticipated to construct the building, is that if something goes wrong, and your constructions more expensive, and then something goes wrong in the building, your lender can always take the building back. But if as part of approval, you had to build a bus stop or widen an intersection, or, you know, pay $500,000 to the city's historic preservation fund. I mean, that's just gone. Right? So there's not even an asset that your lender, whoever it may be, can reclaim when everything goes south, it's just the money's just a wash. And so it's an expense that's even more, you know, it creates even more risk aversion by the lenders. And I think as we can talk about, you know, these menus and off menu exactions. And we'll explain that in a moment. I imagine. They can go from being conditions that the average person might look at and say oh, I think it makes sense to ask a developer for that to sort of really extravagant, kind of like, Oh, my God, I can't believe that as a condition for building housing, someone had to do this. So they really do run the gamut. And some of them really are quite expensive.

Shane Phillips 20:14
So I think, you know, we've been and will continue to be kind of negative about discretion here. And sometimes policymakers increased discretion in housing in bad faith, they do it because they don't want anyone building more homes, and they want to make it as challenging as possible. But there are well intentioned reasons for discretion and subjectivity in these processes to. So I think we should note that even if we believe there are good reasons to use by right approvals more frequently than we do, there are still cases where discretion is appropriate. So what is the argument in favor of discretionary approvals? And maybe as a corollary, what are some concerns people might have about by right processes?

Paavo Monkkonen 20:57
Yeah, I mean, I can think of a few arguments in favor, and I'll throw those out. And you guys can add, add more. I mean, one is kind of a planning, culture of public participation and local democracy. And so more democracy is seen as a good thing by many people. And so you have a plan, you know, you had a public participation in creating the plan that set out the rules of zoning, but maybe you have different people living there. Now, maybe this neighborhood is special in a way that the zoning code for the whole city doesn't recognize. And so you want to get people to have their input, neighbors have their input, and have their local electeds. Listen to it about this specific project. I think some scholars out of Vancouver talk about how there at least, the discretionary urban design review process has led to better designs, right. So to some extent, especially in the case of redevelopment, you know, parcels differ from one another, and some parcels have odd shapes. And so maybe in some ways, the zoning code doesn't allow what might be a better use of that parcel. And so, you know, a process through which the council asked for something, the developer, you know, negotiates with them on what they can do, you could get a win win situation where, you know, if the city council wants it to be built, and the Dover wants to build it, maybe they can figure out a way to change the rules a little bit, and result with a better a better building, quote, unquote. And you can imagine people saying, cookie cutter rules that applied everywhere in the city in this homogenous way, like that's going to create a terrible, soulless place, I would just point them to the city of Paris, which people tend to love. And it is very much a cookie cutter rule, kind of urban design layout. So I'll just leave that there. And then maybe I don't know, Mike, you want to talk about the other big bucket of arguments is that maybe you get more public benefits extracted out of those greedy developers through a discretionary negotiated process. I want to

Michael Manville 22:57
reiterate something Pablo said which there's this initial justification for discretion that really has nothing to do with exactions. I mean, we should emphasize that exactions can come both through by right and discretionary approvals, but just came as a result of the fact that, especially after one round of development in an urban area, parcels are going to become kind of idiosyncratic and you're going to end up with a situation where, you know, someone just can't quite fit a building most people consider totally unobjectionable onto this particular parcel, and still meet the zoning code. And so that's like, I think the textbook, if you go back to very old, you know, zoning law justification for a discretion, right? It's just like, look, a very nose. Yeah, it's a very intent. It's just like, the spirit of the law would allow this building you're proposing the letter of it doesn't, we see no harm? And it's I think it's important to emphasize, discretion in that context is an enabling development, it's actually speeding it up. Right, there's a recognition that the rules were a little too stringent. And they were preventing an outcome most people didn't have a problem with. And so to get into this other aspect of discretion, which is a kind of funny, it's the part of discretion that its proponents like and its own opponents dislike is what Papa was just mentioning, which is that you can start once you realize that you have the power to do this, as a city government, you can start to use discretion strategically, like rather than, Oh, the city encounters a situation where unintentionally, its laws are prohibiting something that probably would be harmless, you can actually make your laws kind of stringent. I mean, you can do that by actually clamping down or just by not changing your zoning as the development context changes around it. And then when the developer wants to do something that most people may not have a huge problem with. You can say, well, yes, but we're going to have to change the rules for you. And once we change the rules for you, you're going to have to do something for us in return. And so to A proponent, this is just a great way to get public benefits for your constituents if you're a sort of an elected official without having to tax them,

Paavo Monkkonen 25:11
and even sometimes not necessarily public benefits. Right. So community benefits that might make a very small public.

Michael Manville 25:17
Yeah, so So but I mean, oftentimes this is, you know, this is something that's driven by elected officials in places where the city council has the final say over discretion. And they justify it as making sure development is responsive to the community that's right there that they are sort of first and foremost, obligated to, and this is where you get sort of the the aldermen prerogative practice in Chicago, the the councilmanic, prerogative and Philadelphia, of course, it's a huge part of zoning in Los Angeles, the way this sort of works in LA and in other places as well is, is basically that the city can have a schedule of exactions, right that if you're a developer, and you walk in, even for a bi write proposal, and you're going to look at this schedule, and say are you want to build this type of apartment building, you're gonna have to do XY and Z. And that might be an affordable housing set aside, it might be, you know, you have to widen an intersection or something like that. And those are expenses for the developer, but the developer does know about them ahead of time. Once you need a discretionary approval, the city can take you as the saying goes off schedule. And once you're off schedule, the sort of pivotal difference that arises is that you are no longer constrained by what in planning jargon we call the rational Nexus. And the rational Nexus basically says it's a sort of legal protocol that says anything you exact from a developer, as a matter, of course, has to respond directly to an impact of that development, and in proportion to that impact. And so if you think, for example, that this development is going to, quote, unquote, create 300, daily vehicle trips, and therefore congested intersection by six seconds of delay or something, every time people go through the intersection, then what you could ask that developer for is only something that reasonably would mitigate that amount of vehicle travel, and that amount of delay. And so this is why you might see, you know, as a matter, of course, city saying the developer has to put in a left turn lane or something like that. And that may or may not be a good idea, but it conforms to that rational Nexus.

Shane Phillips 27:29
And the city could just to be clear the city could, that could require the developer to pay a certain amount of money that would be proportionate to addressing that impact, which they themselves might, you know, spend that on widening the intersection or whatever, it's not necessarily the developer has to do it themselves. But the cost needs to be proportionate.

Michael Manville 27:49
Absolutely. So an impact fee. Is the the monetary version of an exaction. Yeah,

Shane Phillips 27:54
right. I guess I should say the cost doesn't have to be proportionate. It has to be proportionate to the cost of the mitigation, right. So it could far exceed what the developer can actually afford for the project.

Michael Manville 28:07
Absolutely. But But I think that the governing principle, and this is, let's face it, sometimes honored in the breach, right? Like cities will sometimes break this and developers will be reluctant to sue them, you couldn't expect a developer with an on menu exaction, right on schedule exaction, to respond to 200 Extra vehicle trips a day by building an entire rail line, right like that, that would be out of proportion to the damage the city said the developer would cause, right, so it can still be quite expensive. The reason I'm sort of winding up to all this is that once you go off schedule, once the once you need a discretionary approval, that goes out the window. And it's not too much of an exaggeration to say that now you're just in a straight up negotiation. And the city can say to the developer, we got some things we want to have done. And if you want this building permit, you should do them. And this is where you get these like amazing stories, right? Especially in in very strong real estate markets of developers doing things that have absolutely nothing to do with what they're building, in exchange for building permits. Probably the most famous one in Los Angeles is that in exchange for the city plaza in downtown right across from, you know, where the Disney Concert Hall is now, the Museum of Contemporary Art was built, but that was an exaction for an office development. And then you have stories of you know, Pablo, and I wrote in a different article about a development in in Santa Monica, which just, you know, in exchange for building, you know, 150 market rate units. It made contributions to the rail program contributions to the child care program contributions to the historic preservation program, and bought the land and entitled an entirely separate affordable housing development. These are things that are only enabled once you go off schedule once you once you go into discretion. And so this is I realized that was kind of a long winded but this is kind of what the stakes here are and you can understand why people on both sides have strong feelings about it. Like if you're the government of Santa Monica, if you're the government of Los Angeles, you can look and say, at no cost to the taxpayers, I brought you a museum, I brought you all these, these public benefits, because we allowed this building to go in. But if you're someone who's a developer, or if you're worried about just sort of an overall lack of supply, you're saying this is a potentially exorbitant tax on something we really need. Can you just,

Shane Phillips 30:26
you know, for the benefit of the listeners directly connect that to housing affordability?

Michael Manville 30:32
Yeah, I mean, once you say that an apartment building, that the cost of building an apartment building might be not just the cost of actually physically constructing that, but also a year or two years, or maybe more of negotiating with the city, and then carrying out whatever exactions might be involved there. I mean, I think there's two ways to think about it. One is just like, you're gonna get less supply, because not that many developers can do that, right. And it's going to be very hard to build big buildings,

Shane Phillips 31:04
it's actually going to be even harder to build smaller buildings. And really, you might only get a relatively small number of large buildings by developers who have those, both the financial and the political resources easier to move those forward.

Michael Manville 31:18
I think that what you get is a development environment that works for a small handful of deep pocketed politically connected developers, right, who have the financial resources to pay the lawyers to hold on to the land to do all the negotiating and meet the exactions. And to in the worst of situations, you know, kind of grease the palms of the people who hold this,

Paavo Monkkonen 31:42
I thought we were gonna get to the bags of cash later. But let me mean, as you were, as you were talking, I'm like, waiting for my envelope of cash and bathroom in Palm Springs.

Michael Manville 31:56
Yeah, so it's Welcome to Los Angeles. But well, to cut this off for the moment, right? I mean, it constrains the size of the development community, because it raises the barrier to saying like, Oh, I think I might build a building. Right? Well, and so to circle all the way back, one of the beauties of a by right development process, in principle is almost anyone who has who can raise the money could enter it and get a permit and put a building up,

Paavo Monkkonen 32:24
when when we talk about the elasticity of supply and micro economics class 101, we talk about inelastic supply is when the inputs are scarce, when the production process is complex, and when there are a lot of barriers to entry, right. And so this is making not only the production process complex, but also a barrier to entry for small scale developers. And that's something that I think is under appreciated. And we hate the greedy developers that we have created by only allowing them to be successful. Yeah. So

Shane Phillips 32:57
looking at Los Angeles, specifically here now and how the study was formed. In 2017, the city adopted the transit oriented Communities Program TOC, which lets developers build bigger and denser projects if they're near transit, and if they set aside some of their units for lower income households, at below market prices. But in addition to TOC providing that density bonus, it also created a new approval pathway and allowed by right approvals of more projects. Give us a rundown on the TOC program and how it made it possible to study how process affects project timelines, despite the challenges with studying this kind of thing that we mentioned earlier?

Michael Manville 33:38
Sure. I'll, I'll jump in and then Pavo can add. I mean, I think, you know, Pablo, mentioned this earlier that the big obstacle to studying discretion versus by right, is this correlation between the approval pathway and the other factors that are likely to delay approval? You know, specifically, you have a big complicated development. And so the problem you run into is like, is discretion slowing things down and making things complicated? Or do you just have a complicated project and that's why it's sent into a discretionary approval. So a TOC does is it enters into this landscape of planning in LA where the the norm is that any project of 50 or more units are basically subject to discretionary approval that they're subject to something called Site Plan Review. And Site Plan Review basically triggers a discretionary project. And what what TOC says in this it becomes a little bit more complicated than this. For reasons we'll discuss. What TOC says is that that 50 unit threshold is still in place, but the threshold is measured only by the base units in the project and not by the bonus units. And so what I mean by that is say you propose the transit oriented Communities project with 40 market rate units or four already based units, excuse me. And then because you're going to participate in TOC, and set aside a certain number of units as affordable, you get an 80% density bonus, that 80% density bonus is going to bring the total number of units in your building to 72. So you are over that 49 unit threshold that in normal Los Angeles planning would put you in site plan, review and put you in discretion. But because you only have 40 units in the base, you are in the eyes of the transit oriented Communities Program under the threshold, right, you're under that 50 units. And so you're exempt from site plan, review and can be approved by right. And so this is the first thing that I think attracted us to this program. But you have is now a situation where a bunch of proposals that are over there have a size that would normally be discretionary in Los Angeles, are now going to get approved by right. And the reason for that is the kind of thing researchers get excited about, right? Because it's just it's the distinction that the city draws here is unrelated to characteristics of the project itself. It's basically the TOC determination is relying less on the total number of units in the building, and more on a decision made in the planning department about when to stop counting those units. And so for us, we say like, oh, here's some variation, we can exploit. Right? So suddenly, we have a situation where, but you didn't have before. equally sized big developments are going to be in very different approval pathways. And probably do you want to talk a little bit about how it gets even more complicated than that, or better than that?

Paavo Monkkonen 36:45
Well, yeah, I mean, I would just add that something else that interested us is the kind of geographic scope of TOC. So only 20. Only a quarter of La city's land is within a TOC boundary. But actually a majority 66% of land zoned multifamily is in a TOC boundary, just given the relationship between where land zone multifamily and transit is located. Right. And so we were also thinking about exploiting this, you know, geographic boundaries of the TOC program, right? It's only limited to land within a certain distance of metro stations and high quality transit areas. So yeah, I mean, I think that that was the big attraction. Was there something else that I missed?

Michael Manville 37:29
There's one more thing. So then on top of that, you have this additional complication that not every TOC development, even ones with substantial bonuses are going to be approved by right. Because nothing you know, this is planning in a big city in the United States, nothing is easy. There's three different reasons why a TOC development might still get put into discretionary review. Right? One is that again, you could have a building where the base count is just more than 49 units. So the the example I just gave you have a 40 unit development, it gets a bonus of 80% 72. Total. But the base is below 50. So your buy, right. But if someone proposes a 70 unit based development with a 30% density bonus, and I have 100 units, well, that's the base is above 50. That's going to be discretionary. And then there's two other reasons why a TOC development might still be discretionary. One is that it might be in a special district like a specific plan area, whose provisions supersede the TOC. And the other is it might want some additional incentives, extra height reduced setbacks, things like this. And whenever developer and TOC ask for additional incentives that tips it back into discretionary review. That's not very good for the developers. It's actually great for us as researchers, because what it does, right, is it gives us variance not just between the buyer right and discretionary programs. It gives us variance within the TOC program. Right. And so if you had if you had a concern, which was a reasonable one, that a measuring, you know, by right by just looking at TOC, you might have a confound there where the city of LA loves its TOC program. It's just going to fast track TOC. Well, no actually, even within TOC, we can see the difference between by right and discretionary and so that that kind of two by two variants, right? By right and discretionary inside and outside TOC makes for a much cleaner empirical test.

Shane Phillips 39:33
And I do think this is a good time to make the point that discretion is not actually a binary, but it's really more of a spectrum. And we kind of hinted at this in talking about Minji Kim's work, but here in LA by right projects go straight to the Department of Building and Safety to apply for their building permits, as Mike said, and discretionary projects can take a lot of different paths actually but all of them lead through the city planning to partment so one path through the city planning department is you might just need approval by staff. But other projects that have or you know, maybe asking for more or just depending on where they're located or size or what have you, they may require approval by the planning director. And then there are others that actually have to go all the way to the City Planning Commission or even the city council. And, you know, interestingly, some projects actually require discretionary approval. But the city does not really have authority to reject their applications. But just by nature of it becoming this discretionary process, at least in name. In California, the law says that these projects are now subject to appeals and lawsuits. And and of course, the you know, there are uncertainty and financial costs to that both from delay and the legal costs themselves, then there are projects that are truly discretionary. Like, for example, a developer requesting a change of zoning from industrial to residential, this was common in the arts district and a few other neighborhoods in Los Angeles. And in those cases, the city has complete authority to reject the proposal if they choose or asked for whatever they like. So even though discretion creates uncertainty and additional steps, no matter what form it takes, the degree of discretion really does matter. And so just knowing that two cities have discretionary approval processes, doesn't tell you all that much about the similarity between them. But as we've talked about, the buy write process really is distinctive, it is truly by right, at least in the city of Los Angeles, as we run things, it just does not have to go through city planning at all, it does not require entitlements, it only goes for that building permit,

Paavo Monkkonen 41:43
I would just add, the other thing that TOC did was Mike referenced this kind of schedule of exactions. But it really formalized kind of the negotiation process by saying if you want reduced parking, or high more high or more density, you have to give this percentage of your units as affordable to the city. And it created this kind of almost exchange rate, if you will, between kind of variants and units affordable. And so as we learned in interviews that we we did related to this project that kind of almost set a anchoring point for other discretionary negotiations, even non TOC discretionary negotiations is that developers could then reference that schedule within the TOC program and say, Look, this is what you're doing with the TOC How can my project is not kind of falling within these rough parameters.

Shane Phillips 42:33
So what we have now with the TOC program added to this mix of approval pathways is a two by two matrix. TOC and non TOC are on one axis, discretionary and by right or on the other. And so that gives us four project types to study in this little square TOC by right. TOC discretionary non TOC by right and non TOC discretionary. I think we've kind of already talked about how we imagined this might play out. Certainly we thought that by write would probably be faster. And we talked about why we thought maybe TOC would be faster. It's sort of simplifying what developers can ask for they automatically get density, floor area bonuses and then also parking reduction. And they can only ask for specific things in terms of setback reductions, height increase a few other things. Other types of discretionary projects, non TOC projects can ask for really anything. And it's just up to the city to decide whether they want to approve that or not. And of course, developers try to be strategic about asking for things that they're likely to receive and other projects have received in the past. So our final sample that we did this analysis on had 352 projects, they ranged in size from 10 units to 228 units between these four categories. How did the approval times differ? And you know, as I already said, not just by right versus discretionary, but also TOC versus non TOC. What did these approval timelines look like?

Paavo Monkkonen 44:06
Yeah, I think it's first also worth pointing out that we did have a nice range of projects over these different categories. So we had like 90 Toc projects and the rest non TOC about half of the TOC projects were discretionary. More of the non TOC projects were non discretionary. But there was there was a lot of range. And in terms of size, there was a lot of range in sizes. There's a lot of overlap in sizes of projects like we wanted there to be so that was good actually. So the median size for the TSP projects was 44 and 32 units for the discretionary and non discretionary and for the non TOC was a bit bigger difference right. So the median size for the non discretionary projects was not surprisingly much larger than the median size that for the buy right projects. Listeners at home. How long do you think it takes before you get permitted when you submit a application to build multifamily housing in Los Angeles? If you said well over a year, you would be correct. Looking at the raw data, the median approval time for non TOC discretionary projects. So what we expected to take the longest was actually over two years, 750 days. Whereas by right non TOC projects took less than 500 days. Right. And so that's, you know, like the confound, that the non discretionary projects are larger that we mentioned is playing some role. They're probably that we're going to talk about in a minute with the TOC program, their discretionary projects took 500 days. And the by right projects were 60 days faster. So even within the TOC, even as it's a pet pet project of the city, and perhaps getting its special attention by the planning staff, it's still not quick, but it's a lot quicker than the non TOC projects.

Shane Phillips 45:49
And we also looked at the variance and approval times for each pathway, which listeners can just think of as how much and how often the timelines deviated from the average. Variances is not by any means complete measure of uncertainty, but it is at least one element of uncertainty. What were the results they're comparing again by right and discretionary and TOC and non TOC.

Michael Manville 46:12
Yeah, the we measure this with a standard deviation. And for a pirate TOC project, the standard deviation was 213 days. For Bahrain, non TOC project it was 211 days. When you get into discretion, it gets up a little bit higher. So a discretionary TOC project, the standard deviation was 269 days. And then the discretionary non TOC projects again, the ones we expected to have the most uncertainty, it really showed this, the standard deviation was 407 days. Wow.

Shane Phillips 46:45
Yeah. And you can see it in one of our charts in the in the article, which is a should note free to view, you don't have to have any special subscription or anything. You can see just the variation in the box platform, how it's just a much wider range of possibilities for those discretionary non TOC projects in particular. Is there anything we should know about how applying various controls to this analysis? Change the results? Yeah, I

Paavo Monkkonen 47:12
mean, the good news is for the researcher that the controls don't change much. I mean, they do the differences smaller, right, when we include project size, especially but including this controls for how much parking is required locational features neighborhood characteristics doesn't really change too much the difference between by right and discretionary project timelines? Yeah, I

Michael Manville 47:35
mean, I would I would just add is, you know, along those lines in the regressions that really are the meat of the analysis, we tried to control for a bunch of other things that might complicate the permitting of a project. And so size is the big one. But we also

Paavo Monkkonen 47:52
received a GSR is on some fun adventures with this one.

Michael Manville 47:56
Yeah, we put in if the project had ground floor retail, because that, you know, that opens up a whole other can of worms that planning, we if a project was located on an intersection, because sometimes that opens up the door to more traffic impacts, if a project had a non rectangular parcel, because sometimes they're harder to build on, and therefore harder to permit some aspects of the neighborhood aspects of the amount of job access that's available in that location. I think we did that by zip code. And basically, the this coefficient on Bahrain approval was consistently pretty sizable and negative, suggesting that it really does having that buy, right. Even controlling again, for whether or not it's in TOC or not. It really does speed up approval. And I think the one other thing I'd add about this is that we also in some of the specifications, really just condensed the sample to those projects that hovered right around that 50 point cut off. You know, one of the one of our referees made a good point when the article was getting reviewed, it said, you know, well, you've got some some projects in here that are 10 units, and some that are 400. You know, that's there so far on either side of this threshold, like are they really do they really matter? And, you know, we thought that was a fair point. But when you did condense it to I think projects of between, I forget the exact numbers, but you know, 35 and 60 units or something like that, the result was pretty much the same thing. And so there, it really does suggest that being on either side of this threshold and getting into that different pathway, it really does matter for how fast your your project gets gets permitted. Yeah, and

Paavo Monkkonen 49:35
we also worried about the geographic aspect of this a little bit just given that the boundaries are determined by proximity to transit and so you know, it is nice to note that there are non TOC projects within the TOC boundaries. And we did some playing around with limiting it to near the TOC boundaries in the same way. You know, and if we would love to hear from people if there are controls were missing, right as good. Analysts were trying to throw everything at it to make make that coefficient on discretion disappear. And we weren't able to, but there might be something we're missing.

Shane Phillips 50:13
I don't think we need to get much further into methodology here. But I'll just note that measuring approval timelines is a challenge. And it relies a lot on the quality of the data available to you. And I will give the Los Angeles City Planning Department credit for not only being pretty forthcoming with the data, but having some some, I think, fairly unique elements in their tracking. So specifically, one thing they do is they account for the time where they have reviewed an application and send it back to the developer. And that time is is called hold days, it's days where the delay is no longer kind of in the court of the City Planning Department. And so they can account for developers who might just be slower about reviewing their projects, developers who have, you know, submitted an application strategically, because some new fee or regulation is coming soon, and they want to be grandfathered in before it. And so we were able to take account of that. I didn't want to bring one other thing that was considered into this conversation, though, because I think it's just interesting. But one thing we don't capture in the analysis is any time spent on pre submission. So the clock starts once the developer submits their application, either to city planning, or for building permits, in the case of by right projects. So pre submission is the work that developers put into their projects before submitting an application to the city which can be substantial. We write in the article that it is possible by right projects or TOC projects require more pre submission work, because we can't measure it. And if that were the case, then we'd be under counting the actual time spent on these projects. And it would call into question the validity of our results. But if anything, the opposite is probably true, or we think it is probably true. And we suspect that these discretionary and non TOC projects that have longer formal timelines after submission, probably also require more pre submission work on average, too. So could you just say why we think that is?

Michael Manville 52:14
Yeah, I mean, I think, you know, again, there's no real systematic way to verify this. But the nature of the discretionary approval is that you know that at some point, you're going to have to win at least one vote, right, you're gonna have to get the Planning Commission to vote for you, you're going to have to potentially get the city council to vote for you. And along the way, they those bodies are going to hear testimony from neighbors and community groups and various activists and advocates, which means that before you move forward with that, if you're doing your due diligence, you're probably laying groundwork and trying to communicate with all those potential stakeholders, meeting with the city council members planning deputy and saying, look, if I file this, you know, what do you think's going to happen? Who do you want me to have talked to, and then you gotta go talk to those people, and so forth. And by right, you just file it. And if you hit the checkbox, like you move forward, I was we did some interviews for this project before we started getting into the data analysis. And one of the interviews that really stuck with me was a developer who had a buy right to see project and went out of just a courtesy to visit the neighbors. And all the neighbors came in, and they were kind of laying into him for how he was going to ruin their neighborhood. And one of them finally, like, just threw up his hands and said to the rest of the group, you know, he doesn't have to listen to us. And they all sort of came up short and said, is that right? And the developer said, in fact, it is this is a ministerial approval. I'm just, I'm being polite. And you know, you can like that or not like it, but it does strongly suggest that that pre submission process is going to be much longer for the discretionary approvals and not the by right.

Shane Phillips 53:50
Coming back to Minji. Kim's work on public benefits or exactions. Let's talk about how these TOC projects compared to non TOC projects in LA. As a reminder, it is generally believed and maybe true that discretionary processes allow cities to negotiate for more public benefits, like open space or below market units compared to buy right processes. That's what Kim found in her analysis. But in this case, we found the opposite. Not only were a larger share of units reserved for lower income households, in both discretionary and by right TOC projects compared to non TOC, but also a huge share of the below market units in TOC projects, specifically the ones that did not receive public funding were restricted to extremely low income households, which is a much deeper level of affordability than you see in most projects, whether subsidized publicly subsidized or not. And therefore it is more costly to developers to provide those extremely low income units. So what do we think explains that? Well,

Paavo Monkkonen 54:51
I think when those one finding those really interesting with this, I think rather than thinking about it as this being a better way to do public exactions I think it's more the case that affordable developers really liked the TC TOC program, right? So we saw a lot more 100% affordable projects being built through the TOC program than in the non TOC program. So just for some, some numbers on that about a quarter of the TOC projects were 100%. Affordable, compared to only 12% of non TOC projects. So that was one thing where, you know, I think a lot of LM, you know, the statistic that you might see a lot is that a lot of LA's subsidized units are being produced through this program. But I think actually a lot of those units are in these affordable projects.

Michael Manville 55:34
Yeah, when we looked for what people kind of classically think of as an exaction, which is, you know, affordable units within market rate developments. They were they were about the same across the two. So they were comparable. And, you know, it's this was not the the main purpose of our study. So I would hesitate to, you know, just look at these associations and say, Okay, well, we've, we've overturned this piece of conventional wisdom, but at least, you know, again, there aren't too many valid within city comparisons. I think ours is one of the very few. And what it does suggest is that it's not obvious that for the types of run of the mill exactions cities sometimes want that discretion, it has to be the way to go. I mean, the obvious caveat to this is that if you are building your zoning regime around the idea of extravagant exactions, if your Santa Monica, if your Los Angeles in the era of Mocha, you need discretion to do that, for sure. But I mean, I think the three of us probably agree that that's a terrible way to build the zoning code,

Paavo Monkkonen 56:38
right, and a terrible way to provide welfare. Yeah, should taxes

Michael Manville 56:44
Yeah, it's a lousy way to do the social safety net, it's a lousy way to do public services. It's a lousy way to do land use regulation. But if you are invested in it, then you need discretionary review.

Shane Phillips 56:54
And I do I think Paul's point is really important, too, that the fact that affordable housing developers publicly subsidized developers are, you know, especially interested in this, I don't think that's all that unique. I think a lot of times, policies like this that are, you know, quote, unquote, pro development are framed as Pro developer, meaning for profit, rich people, greedy, whatever, they're going to make more money. But in fact, a lot of times it tends to be the affordable housing developers who benefit most and I think another example of that was in San Diego when they eliminated parking, minimums for housing near transit, and housing production increased. But you know, maybe I don't know 20 30% Or something not not massively, but the production of below market units in both for profit, unsubsidized and, and publicly subsidized projects rocketed up. I mean, I think in the unsubsidized projects, in particular, the number of units coming from affordable units being produced went up by like, 500%, or something. And so that was the largest beneficiary are arguably of these projects, was that increased in affordable housing. And so I just wanted to kind of draw attention back to that. But let's, we we started to touch on corruption, and we held off we're gonna or near the end here. So let's get back to it. It is certainly relevant to these policy conversations, especially in Los Angeles. Unfortunately, in the past several years, multiple city council members have been, I think, I think convicted in at least two cases of soliciting or accepting bribes from developers in exchange for shepherding their projects through the political process, which is to say, the discretionary process. Mike, I think, your previous work you've done with Tanner Osman, on growth revolts relates a lot to this, too. So what is the relationship between discretion and corruption and also between discretion and public trust? Even if no one is acting corruptly?

Michael Manville 58:55
Yeah, you know, the LA is of course the it can't do anything halfway. Right. So it's, it's, it's gone all the way to full scale corruption with its discretionary review. But I think the point Tanner and I make is, is related to something Pablo said earlier, which is that a real a thoroughgoing discretionary regime is one where no one can really predict with a lot of certainty what's going to be built and what won't. And of course, that undermines the entire idea of zoning. Right. Zoning has always been an imperfect system. But you know, to the extent it has some merit to it, it was that it offered a degree of predictability and stability to people in the city, certain things were going to be allowed in certain places, and there was going to be a process for changing that. And in Tana rosmond, and mais article about sort of discretionary review that we wrote, five or six years ago now there's a quote at the beginning from a legal scholar named Richard Mandelker that says something like the true measure of a city's desires cannot be found in the zoning code. It has to be found in the zoning amendment. What what's meant by that is that in a discretionary regime, the zoning code doesn't really tell you what the city wants. It's just a starting point for negotiation. And you find out what the city wants when you start negotiating. So you might have a situation where the city says there's no buildings allowed above 36 feet. But what's really meant by that is there's no buildings allowed above 36 feet unless you can make really make it worth our while. And that can start to alienate citizens who thought they had moved into a place where 37 foot tall buildings weren't allowed. And so you end up with kind of the worst of all worlds, which is that a it's very difficult to build, because you have to go through these extensive negotiations. And then on top of that, almost everything that does get approved, comes with this sort of with of illegitimacy, this idea that it was that the city government bent the rules for the developers. And and that doesn't help things. And of course, one thing that Tanner and I talk about is that it's this is the motivation behind a lot of growth revolts that have occurred, especially in southern California is if you look at the text of those revolts, when they put things on the ballot to restrict development, they usually call out the fact that the city is ignoring its own zoning code. And so I think that's the biggest cost is just this generalized distrust of the entire planning process that arises from what seem to be negotiations that circumvent what's written down on paper, as Pablo can probably fill us in the next step from that right is just to go into straight out illegality.

Shane Phillips 1:01:39
I don't know why Pablo is the expert of this. allegation. Don't tell.

Michael Manville 1:01:47
I that was just I just wanted I just felt like I've been talking too much.

Paavo Monkkonen 1:01:52
I haven't met one of the people in that long indictment. I thought the best line from on this topic of corruption was something that I think Mike found in in the indictment, or maybe you found a chain, a wiretap, developer described paying bribes as just trying to plan for the next 12 years. Yeah, because that really, that really speaks to the kind of pre approval timeline that we can't measure. Right. So a lot of this is just generating goodwill on the part of the city council in order to get your projects to prove later. And that kind of, you know, speaks to let's make it a little bit more wonky, none of this fun, corruption talk. I think one of the so what's this paper and kind of, as we said, our motivation was more about getting a number on the benefits of by right, rather than looking at public exactions necessarily was thinking about the category of state regulation of local zoning. Right. And so thinking about how the state can go in and as it has been doing in California, make more projects eligible for by right approval processes. And then we have this long decade long history of a permit streamlining act, where the state is trying to regulate how long is reasonable for a city to take to make a decision on a project, whether it's meeting zoning, and whether it's meeting building and safety. Right. And so I think I mean, that's like a whole nother can of worms. The permit streamlining act, if you thought regulating housing element sites was difficult, regulating timelines turns out to be even more difficult, but you know, getting some empirical evidence on the benefits of a viral process, I think was really important for that, for that category of work.

Michael Manville 1:03:25
Sorry, I'm gonna jump back. I do want to tell the listeners what happened in LA with the corruption. Yeah. So in the worst of situations, it doesn't take long for this to segue into just flat out corruption. And so just to to deliver the goods that we promised, since the beginning. What happened in Los Angeles is that the city council committee, the planning and land use committee called our plum that actually approves these discretionary proposals. A number of the council members on that committee went from asking for things from their districts to then asking for, you know, it starts innocently enough donations to their favorite nonprofits. And then it just culminated with they just wanted cash. And anybody who's interested in sort of municipal corruption can find the indictments and the various news articles online because it just ends up being like a kind of bad movie where the city council members and their top aides are meeting with developers in Las Vegas and literally getting handed paper bags full of cash in exchange for basically putting their buildings through. And it's corruption and corruption is unforgivable. But what's really tragic about it is that these payments are debasing the municipal government over things that like probably shouldn't be illegal. I mean, they're the bribe is illegal, of course, but someone is behaving and clarifying that. The bribe is absolutely, but someone is paying a bribe so that they can build a toy Only six storey tower in downtown Los Angeles. How did we get to a position where you had to pay a bribe to build a moderately tall building in the downtown of the second largest city in the country? I mean, so that's the sort of, it doesn't happen all the time, of course. But that's the kind of tragic end game of discretionary review that a lot of power ends up being vested in relatively few people. And if you don't have sufficient monitoring, they may not leverage that for the public good. And then what you get basically what we had happened in Los Angeles, where, you know, a bunch of FBI guys and windbreakers are swarming through city hall seizing computers and arresting local officials. It's uh, in retrospect, I think even the biggest proponents of discretionary view have to consider that it might have been better to just say it was okay to build a tall building in downtown Los Angeles.

Shane Phillips 1:05:55
So as our closing question, I just would like us to talk a little bit about what other benefits might accrue from shifting to more by right approvals that we may not have spoken about so far. So I can throw out one, which I think is, you know, at least as planners, as people at a planning school, maybe this is kind of little in the weeds, inside baseball or whatever. But a lot of planners spend their time reviewing projects for zoning, compliance, and like much more detail than that, or managing these public meetings, where people just show up and yell about the projects and not much changes most of the time. And it would be great if those planners could use their time in other ways, like planning, for example. And I think most planners feel the same this, these are the kinds of jobs the ones where you're staffing these meetings and writing the same report showing why the 100 page report showing why this project is compliant and should be approved is not their favorite part of their job. But what else can we can we think of here that

Paavo Monkkonen 1:07:02
planners happiness is high on my list of things that this does. I mean, I think the big picture matters, though. Yeah, sure. Okay, sure. I care about

Shane Phillips 1:07:12
I mean, I care about those put aside their their happiness, there's also just we're spending money sure that maybe they should be doing something that's more

Paavo Monkkonen 1:07:20
I mean, I think the big picture is, we need housing affordability, right. And so we're having a plan where we say we want a lot of housing built, and this is what you need to do. And creating a kind of boring system through which small businesses can build housing developments, I think would be would be fantastic, right? Rather than this bizarre Kafka esque way to get to building something that people actually need, and is good for the world. Well, and

Shane Phillips 1:07:44
I think that point about the small project small developers is part of this to where by reducing the barrier to entry can have maybe a more diverse group of people building this housing, which is just not the circumstance we find ourselves in,

Michael Manville 1:08:00
don't like bribery. I mean, I think, you know, you're always going to need a big developer to build a really big project. But it shouldn't be quite so hard as it is for someone to build a 4555 unit building. And by right could help do that. As the chairperson of the UCLA Department of Urban Planning, I want to be on the record saying that the health and happiness and welfare plan are deep abiding personal concern to me. And beyond just that bit of PR. I do think, Shane, you're right. I mean, and you don't have to frame it necessarily as planners happiness, but just, you know, you hire these folks, and they're talented, and you do squander their talent, or drive them to burnout. When you have them, you know, at these four hour long meetings, often in the evening, just like, you know, listening to people yell and scream, but it doesn't actually move the needle that much on the final project. And when I was at Cornell, and I knew planners who worked for ethics planning department, you know, they there was all they did. I mean, it's a little bit of an exaggeration, but so many of them had so much comp time that they could basically never take, because of all these evening meetings in front of various boards of appeal. And it's not a good way to use a sort of educated, talented workforce.

Paavo Monkkonen 1:09:16
Right. Yeah. I mean, I just last maybe thing on that I think something that Mike and I have written about in another paper is kind of the parcel level approach to planning being a big problem and not thinking about kind of citywide projects, for planning processes. And so this is really a case of meetings and public deliberation, and a vote on one building at a time is really not, not the way forward.

Shane Phillips 1:09:38
Yeah, I like this idea that planners spending more time planning the public space and kind of leaving the private space to, you know, lead where it will, because generally, the developers have a pretty good sense for what people want to see and how much housing is needed and so forth. And we've kind of ceded the public space planning and not emphasize that as much and And especially in a place like Los Angeles. Yeah, I think that really shows. Yeah. Yeah.

Paavo Monkkonen 1:10:04
I mean, I've called this in another paper about planning and Mexico proactive planning versus reactive planning, right. And so when we have this kind of system where it's like developer proposals, something and then we think about what we want to make them change. That's not kind of a public led city development process where the city should be saying, This is what we want, go build it for me. But that's not what we do.

Shane Phillips 1:10:25
Even though we do that. It's just then the developer shows up and says, I would like to build we want but not like that. Let's actually negotiate after it was both proactive and reactive. All right, Mike, Paavo, thank you for being guests this time, it was fun. And we'll see you next time on the Housing Voice podcast.

Michael Manville 1:10:45
Thanks, Shane.

Paavo Monkkonen 1:10:46
Bon oui.

Shane Phillips 1:10:49
You can read more about the Lewis Center's work on our website, lewis.ucla.edu. Show notes and a transcript of the interview are there too. The UCLA Lewis Center is on Facebook and Twitter, I'm on Twitter at @shanedphillips, Paavo is at @elpaavo, and Mike is at @michaelmanvill6. Thanks for listening, we'll see you next time.