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Curious as well. I’ve seen some get pretty creative with a small lot subdivision paired with ADU law to boost density.
Which markets? This is pretty broad. It’s tough in LA city, land bid ask spread is still way too high and ULA and construction costs are thru the roof. ED1 is throwing a wrench into things because people think land all of sudden is worth something in lesser neighborhoods when in reality no one’s touching ED1… wild time to be developing, may take a few years to get back to penciling rental housing in LA.
I am personally in the Bay Area. ED1 is LA specific legislation exempting 100% affordable projects right?
Yup, basically. Brokers think land is all of a sudden worth so much more than before simply because you can have nearly double the market rate density with 300-400 sqft units and literally ZERO parking. It’s unleasable product in neighborhoods that cannot support no parking. It’s a stop gap for the lesser neighborhoods to continue to have development since the latest housing element is shoving mixed income into higher resource areas: the best neighborhoods since rents can sometimes cover costs and with the density bonus, it’s theoretically supposed to help push that over the line. It won’t though because state density is now bigger than TOC, so the wehos/Culver’s of the world which aren’t in LA, have no ULA, and have an increased density bonus now make more sense. But ED1 just makes brokers think people will pay for the bid ask spread when in reality, it just makes dev even harder to do…
This group is worth a look: https://www.myunits.com/
Based in LA and focused on small multifamily.
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