How can we mitigate traffic congestion, the housing affordability crisis, and homelessness before the 2026 World Cup and 2028 Olympics in LA? Although Metro expansion could be a solution, it may also be taxpayer dollars poorly allocated if executed unwisely. According to Los Angeles County Metropolitan Transportation Authority, two cents of every dollar spent in LA ($6.6 billion) will be going toward Metro services. This is both exciting and worrisome for property owners, developers, and residents surrounding the newly projected rail stations.
While the housing affordability crisis is a daunting task, innovative developers and astute city officials are symbiotically tackling this issue with the utmost caution. Despite rising construction costs and interest rates, mixed use projects like the 573-unit development near the Expo / Crenshaw station show no signs of decelerating, especially with the perks of the Transit Oriented Communities Affordable Housing Incentive Program. Some thrifty residential property owners are even building Accessory Dwelling Units (i.e. in-law units, granny flats) to assist housing affordability, but they should be aware of ADU parking requirements within a ½ mile of major public transit stops. Contrarily, the stringent TOC stipulations may strain smaller projects while LA city planners are also writing stricter rules for residential development near freeways (due to negative health effects including asthma, cardiovascular disease, and childhood leukemia). Owners of antiquated properties near metro stations should also be concerned. One dormant site near Vermont & Manchester was recently seized by the city of LA via eminent domain and is now being converted into affordable housing, a transit plaza, and public school. Although we are still bullish, we must keep a keen eye on rent control policies and other development disincentives. Fred Sutton, Vice President of Public Affairs at the California Apartment Association says “California is close to a million units short of supply needed to accommodate demand. It’s fundamental math and rent control has been studied ad nauseum to undoubtedly have a disproportionate effect on the economically disadvantaged. It will increase housing scarcity and ultimately lead to an increase in the cost to find housing.”
With a population of roughly 18 million people and proliferating, where do we even begin with traffic congestion in Los Angeles? Grandiose concepts like Uber Elevate and The Boring Company’s 125mph underground transportation system are making headway, but that will solve only a fraction of the issue. Fortunately, the Sepulveda Pass transit line is making some progress. This may finally alleviate travel along the dreaded 405 freeway so that Westside beach dwellers and San Fernando Valley folks can become friends again. Even West Hollywood wants a piece of the Metro expansion. City Councilmember John Duran suggested one of the funding sources for the WeHo Light Rail derive from a marijuana tax “to help support our work on the northern extension.” WeHo city council voted 3-1 for construction of the project to begin within three years. This rail is projected to produce 90,000 daily riders, which is 20,000 more than the Blue Line (LA Metro’s busiest line). Concurrently, Metro will receive a good portion of the SB1 gas tax bill for further expansion. Metro funds and completion dates may be expedited by P3 (public-private partnership), but if that can be avoided, it will help capture some of the value transit gives private property owners along the route in order to help pay for the investment.
Lastly, how can Metro expansion help homeless people get on their feet and start bringing significant value to their community? Taxpayer dollars allocated toward welfare and optically displeasing “tent cities” may band-aid the issue, but are not viable long-term solutions. Non-profit organizations and other private institutions must help formulate a scalable strategy that provides homeless people with steady employment, drug rehabilitation / counseling, and subsidized housing. LA city leaders are getting creative with plans to place showers in metro stations (perhaps for a homeless person on the way to a job interview), which is both admirable and concerning. This idea may exacerbate the issue by magnetizing only homeless / low-income people toward these amenities and shy higher income individuals away from the Metro. Now, city-owned sites near metro stations in Koreatown and SF Valley are being transformed into homeless emergency shelters (i.e. “Bridge Homes”), but this concept is receiving heightened scrutiny and even hostile resistance from nearby property owners / residents who are concerned about the safety of their community. Cameras and 24-hour security on-site along with pre-approval by property owners / residents within close proximity may help alleviate the concern.
As a horizontally-built city with almost perfect weather, traffic congestion, housing affordability, and homelessness have been chronic uphill battles for decades. At the end of the day, these issues can be assuaged prior to the 2026 World Cup and 2028 Olympics, as long as Metro expansion and real estate activity surrounding newly projected rail stations are calculatively navigated.
Viktor Simco is the associate director of investments at Paloma Realty Partners in Venice, CA. The views expressed here are the author’s own.