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Affordable Housing Covenants

Variable Definitions:

Affordable Housing Covenants are agreements between the City of Los Angeles and property developers to offer affordable housing. Property owners get incentives if they reserve a specified number/percentage of their developed units to be offered with affordable rates. This data presents four variables for each year, both in terms of new units and cumulative totals:

  • Affordable Units: The number of Affordable Housing Covenant units. This variable only counts the offered units that are deemed affordable based on the tenant’s income. Certain multi-unit properties are mixed-income; some, but not all, units in these properties are reserved as affordable housing. For such cases, this variable only counts the units that are actually affordable, not the total number of units in the property.
  • Units Qualifying for Density Bonus/Parking Reduction: The number of AH Covenant units that fall under the Density Bonus and/or Parking Reduction incentive. Property developers can build more units or less parking than typically allowed as long as a certain percentage of units built are reserved for affordable housing.
  • Units in Transit Oriented Communities : The number of AH Covenant units that fall under the Transit Oriented Communities incentive. Property developers receive incentives for building affordable housing units within a one-half mile radius of major transit stops.
  • Units under the Affordable Housing Trust Fund Project: The number of AH Covenant units constructed within the Affordable Housing Managed Pipeline, an LAHD-managed project dedicated to  making long-term loans for new construction or the rehabilitation of existing residential structures

Source:
Los Angeles City Controller

Years Available:
2010 – 2022

Methodology Note:

The original data comes at the point level. Our team geocoded the locations to generate X/Y coordinates, then spatial joined each point to 2020 Census Tracts.

Why are these variables important to measure?

Affordable housing covenants serve as a collaboration between the City of LA and property owners where property owners agree to offer affordable housing to residents. The City of LA provides incentives to property owners and developers, who in return, offer a certain amount of affordable housing units. The Housing Department decides who can access these properties by reviewing affordable housing applications based on a household’s income. Affordable housing covenants are integral in ensuring enough affordable housing stock and mitigating rising housing costs within the City of Los Angeles.

There are various kinds of affordable housing covenants and incentives for developers to incorporate affordable housing. The California Density Bonus Law gives housing developers better development requirements if they allocate land for affordable units or units for older adults. This law provides developers with an increase in project densities, reduced parking requirements, and reduced minimum square footage requirements. 

Furthermore, the transit oriented communities incentive program promotes the building of affordable housing near train and bus stations to accommodate low-income residents, promote less car travel, and add to the City’s housing supply. According to Assembly Bill 2097, the state of California prevents public agencies or local governments from imposing parking requirements on development projects within a half-mile of a transit stop. 

As of 2017, property owners can legalize qualifying unpermitted units if safety conditions and regulations are met through the Unpermitted Dwelling Unit Ordinance (UDU).These units are able to be put up on the housing market if the owner follows the process ensuring that at least one low or moderate income affordable housing unit is available for each legalized unit.

The Affordable Housing Trust Fund Program matches funds to local and regional housing trust funds for the preservation and creation of affordable housing, transitional housing, and emergency shelters. This trust fund started in June 2000 with the Los Angeles Housing Department’s commitment of $5 million to fund proposed housing developments that were on the waiting list from the NOFA for that year. After continuous years of renewed funding, the LAHD established the Affordable Housing Managed Pipeline Program (AHMP) to open investment from any other public and private entities for the development of affordable housing. This trust fund is used to make long-term loans for new construction or for the rehabilitation of existing residential structures. Housing trust funds are created locally, therefore local administrators and stakeholders can use these funds to motivate community goals including affordable housing. Local housing trust funds are also favorable because they have a regular stream of revenue and can be effective in supporting affordable housing. Unlike most state and federal housing programs, housing trust funds have less conditions restricting their use.

Written by Rediet Retta

Citations:

“Affordable Housing (AH) Covenants – 1985 to 2022 | FAQ.” Housingcovenants.lacontroller.io, housingcovenants.lacontroller.app/faq. Accessed 9 July 2024.

“Assembly Bill 2097 | Los Angeles City Planning.” Planning.lacity.gov, planning.lacity.gov/project-review/assembly-bill-2097.

Goetz, Jon, and Tom Sakai. Guide to the California Density Bonus Law. 2021.

Land Use Covenants – LAHD. housing2.lacity.org/partners/land-use-covenants. Accessed 9 July 2024.

League of California Cities City Attorneys Programing, Annual Conference and Expo Long Beach Convention Center Affordable Housing Covenants: Ensuring Continued Affordability. 2022.

“Local Housing Trust Fund (LHTF) Program | California Department of Housing and Community Development.” Www.hcd.ca.gov, www.hcd.ca.gov/grants-and-funding/programs-active/local-housing-trust-fund. Accessed 9 July 2024.

“Transit Oriented Communities Incentive Program | Los Angeles City Planning.” Planning.lacity.gov, planning.lacity.gov/plans-policies/transit-oriented-communities-incentive-program.

“Unpermitted Dwelling Units (UDU) | Los Angeles City Planning.” Lacity.gov, 2017, planning.lacity.gov/plans-policies/unpermitted-dwelling-units.

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