As I said yesterday, most people aren’t getting the distinction between the Grand Bargain and the recommendations of the Mayor’s Housing Affordability and Livability Agenda (HALA) Committee. The Bargain is one of 65 recommendations and involves upzones in exchange for a mandate to provide a set percent of rent restricted housing. I have described the HALA recommendations as like an old erector set: lots of pieces, but they don’t turn into anything unless they’re put together. The Bargain is infeasible. One can be hopeful that we can assemble the 64 recommendations in a way that will provide some lasting price stability and sustainable growth while also being skeptical about the Bargain. Here’s a serious of Facebook comments that highlights more about why the Bargain may not work. It kicks off with a question about the numbers, and what follows is a rundown by David Neiman about why we’re skeptical.

You could post calculations from the different scenarios, presumably. Something that would justify this attack on the Grand Bargain. I don’t want to see LR builders treated differently than MF builders but it’s hard to take this seriously without the proformas to show the unfairness.

Neiman then responds in several different comments that I’ve quoted verbatim as paragraphs.

I was part of a group of LR builders, developers, architects that all ran pro-forma analysis for LR1/LR2/LR3 based on the FAR bonus & inclusion requirement published. We all used our own methodology & model, but all came to the same conclusion, which is that the value of the bonus & the cost of the mandate do not balance in the LR zones.

This really shouldn’t be a surprise because you can see the problem by inspection. In most zones, an FAR bonus of about 20-25% is paired with an inclusion requirement of 5%-7%. In the lowrise zones, the same inclusion requirement applies, but the FAR boost is 8%-10%.

The problem is not un-fixable, but the fact that the city started with bad math out of the gate is a concern. It is not hard to see the scenario unfold where the bad math becomes draft legislation, which sets the bar from which people begin negotiating, and it becomes politically impossible to get the FAR boost and the inclusion requirement to a place where they are balanced & fair as is the intent of the grand bargain.

 

The fact is that we don’t know much about how Mandatory Inclusionary Zoning (MIZ) will work in any zone. But what we do know is that most projects even under current rules are often not able to build out to the existing FAR capacity they have. Nieman points this out.

One big caveat: It one thing to grant greater FAR. Its another thing to allow it to be used. Current LR development standards make are full of a ton of restrictions that make it hard for developers to use their full development potential. Absent a serious attempt to peel back some of the handcuffs inherent in the LR zoning code, many sites will have trouble using the extra FAR.

Again, it’s ok to question the Bargain including who supports it an why, will it work, and is it the best way of accomplishing the stated goal of 6000 units of housing in 10 years. Asking these questions doesn’t make you a doubter or a spoiler: it makes you someone who wants to be sure what comes out at the end works.