GlobeSt.com: What is driving growth in Los Angeles?

Waite: It is particularly because of the growth in the tech space and more higher-end job opportunities in Los Angeles. You are starting to see the tech economy in Los Angeles grow, and I think it is growing in a different way than it did in other markets. These are stabilized companies in need of a workforce to support their operations. These are companies that are moving here because they are seeking an educated workforce, and in turn, Los Angeles provides great weather and a great environment that I think young people are yearning for. That is not to say that the Bay area is not equally as attractive, but I do think that L.A. is probably more affordable. The jobs are plentiful here, and this is a more geographically diverse area. All of these are contributing to why we are seeing this spurt of growth that has been most evident in the last 24 to 36 months.

GlobeSt.com: How do you prepare for this growth?

Waite: Los Angeles is on course to become the densest city in the United States by 2025; it is going to overtake New York, if the current trends continue. We are only producing about 12,000 housing units per year, which is about a quarter of the demand. We are very, very shy in creating housing for people that are moving here. That, of course, impacts affordability on a straight supply demand curve. Affordable housing is becoming a major issue that we are going to have to grapple with. Those are coupled that with the anti-growth measures. Measure JJJ, which was approved earlier this month, is more of a labor-sponsored initiative to provide prevailing wage on projects with general planning and zoning changes and has an affordable housing component. To some degree, it is labor getting their equal share of the economic pie by making sure that these projects are paying prevailing wages and I think the affordable housing component is equally as important to creating the opportunities for affordable housing whenever you are doing projects that require legislative changes on a project-specific basis. The Neighborhood Integrity Initiative is really a backlash from neighborhoods that are hoping for higher degrees of predictability in the growth of their communities.

Downtown and Hollywood are our predominate nodes of density in terms of intense development because they seem to be providing the most on a square footage basis. The hope is that, as we build more transit, we will start to see more density development on the transit nodes that start to emerge and that we start to see transit-oriented development come more into vogue. We are just in the first inning of that kind of development in Los Angeles, and I think the promise for transit-oriented development is quite profound, in terms of both market rate and affordable housing. Essentially, you want to create mixed-income housing in those areas where people can use transportation. I think that is how Los Angeles is anticipating this growth and anticipating where this growth is going to occur. It is clearly not going to occur everywhere; it is going to be focused in certain areas where growth can be accommodated. Even then, we are going to see a backlash of anti-development groups and community opposition because people wake up one morning and they see a new high-rise coming in that they had no idea was in the works. From an entitlement and land-use perspective, that is going to continue to be a challenge, which is to ensure that we have higher degrees of predictability where density can occur and should occur under good land use planning policies in the city.

GlobeSt.com: Is updating the community plans a potential solution to preparing for the growth?

Waite: We have 36 community plans in the City of Los Angeles, and they have been updated with a lack of regularity. We are starting to see that those become a way that we can plan for density. I think you are clearly going to see a move to get the community plans more activated and use those as a vehicle to create templates to accommodate higher density development. The community should be supportive of those, and the development community will also be supportive of those because they will have a higher degree of predictability in terms of what they can achieve in development projects and what the affordable housing should be. In Los Angeles, we will probably never have as-of-right development, but we will be moving towards a type of development that will minimize the need for legislative approval on a project-specific basis. That would be a reasonable and laudable goal.

GlobeSt.com: How does the development community view this growth?

Waite: I think it is viewed as positive for the development community. I think that they see the opportunities for creating really cutting-edge, forward-thinking mixed-use environments that have a really good combination of retail and housing, and in some cases even office space, and for the forward-thinking development community, I think it is a great opportunity. However, that is for the developers that are doing those types of projects. For the developers that are doing more typical single-family for-sale housing, the opportunities still exist but they are being pushed to the fringe because you simply don't have enough land in the urban core to accommodate for-sale detached housing. That is a very challenging environment. For mixed-use, creative and transit-oriented developers, I think Los Angeles is coming into its own and will continue to do so.

Cox, Castle & Nicholson

LOS ANGELES—By 2025, Los Angeles is going to be the densest city in the country, if current migration trends continue. Job opportunities, new transit and affordability (compared to other metros) are driving more people—especially young professionals and new college graduates—to Los Angeles. Earlier this month. David Waite, a partner at Cox, Castle & Nicholson, moderated a panel at Densifying L.A. to discuss the growing density in Los Angeles. We sat down with Waite for an exclusive interview to ask, Where are we going to put all these people? Here, he tells all about density in L.A., including how to prepare for this influx of people, how to handle animosity from the community and developers' reaction to this growth.

GlobeSt.com: You recently moderated a Densifying L.A. panel. Tell me about the growing density in Los Angeles.

David Waite: Cities worldwide are going to become 80% of the world's population by the year 2080. That is the basic prediction and prognostication. Obviously, there will be local variations in regions throughout the world, but essential there is in-migration to cities, particularly with younger people that are seeking economic prosperity. They also yearn for all of the great things that cities provide in terms of culture and resiliency.

Locally, we have seen some pretty amazing growth in Los Angeles. The city now has a population of more than 4 million, the County of Los Angeles has a population of 10.2 million and the State population is growing to 38.7 million. The city experienced an increase of 50,000 residents in 2015, which is essentially 1.2%. That is the largest increase of California's 10 largest cities. When you compare Los Angeles to San Francisco, San Jose, San Diego and the other major metropolitan regions, L.A. is growing at the fastest rate of all of the major cities. Unlike past growth spurts, which were largely a reflection of childbirth and in-migration, there is a spurt of growth that is coming from young people. I'm not going to use the word millennial, but the reality is that these are young people that are coming to Los Angeles seeking quality of life and economic opportunities that the city seems to be able to provide for people that are entering the workplace. Particularly as the economy is starting to get some legs in terms of job growth, I think Los Angeles is poised for continued growth. That is really the macro trend.

GlobeSt.com: What is driving growth in Los Angeles?

Waite: It is particularly because of the growth in the tech space and more higher-end job opportunities in Los Angeles. You are starting to see the tech economy in Los Angeles grow, and I think it is growing in a different way than it did in other markets. These are stabilized companies in need of a workforce to support their operations. These are companies that are moving here because they are seeking an educated workforce, and in turn, Los Angeles provides great weather and a great environment that I think young people are yearning for. That is not to say that the Bay area is not equally as attractive, but I do think that L.A. is probably more affordable. The jobs are plentiful here, and this is a more geographically diverse area. All of these are contributing to why we are seeing this spurt of growth that has been most evident in the last 24 to 36 months.

GlobeSt.com: How do you prepare for this growth?

Waite: Los Angeles is on course to become the densest city in the United States by 2025; it is going to overtake New York, if the current trends continue. We are only producing about 12,000 housing units per year, which is about a quarter of the demand. We are very, very shy in creating housing for people that are moving here. That, of course, impacts affordability on a straight supply demand curve. Affordable housing is becoming a major issue that we are going to have to grapple with. Those are coupled that with the anti-growth measures. Measure JJJ, which was approved earlier this month, is more of a labor-sponsored initiative to provide prevailing wage on projects with general planning and zoning changes and has an affordable housing component. To some degree, it is labor getting their equal share of the economic pie by making sure that these projects are paying prevailing wages and I think the affordable housing component is equally as important to creating the opportunities for affordable housing whenever you are doing projects that require legislative changes on a project-specific basis. The Neighborhood Integrity Initiative is really a backlash from neighborhoods that are hoping for higher degrees of predictability in the growth of their communities.

Downtown and Hollywood are our predominate nodes of density in terms of intense development because they seem to be providing the most on a square footage basis. The hope is that, as we build more transit, we will start to see more density development on the transit nodes that start to emerge and that we start to see transit-oriented development come more into vogue. We are just in the first inning of that kind of development in Los Angeles, and I think the promise for transit-oriented development is quite profound, in terms of both market rate and affordable housing. Essentially, you want to create mixed-income housing in those areas where people can use transportation. I think that is how Los Angeles is anticipating this growth and anticipating where this growth is going to occur. It is clearly not going to occur everywhere; it is going to be focused in certain areas where growth can be accommodated. Even then, we are going to see a backlash of anti-development groups and community opposition because people wake up one morning and they see a new high-rise coming in that they had no idea was in the works. From an entitlement and land-use perspective, that is going to continue to be a challenge, which is to ensure that we have higher degrees of predictability where density can occur and should occur under good land use planning policies in the city.

GlobeSt.com: Is updating the community plans a potential solution to preparing for the growth?

Waite: We have 36 community plans in the City of Los Angeles, and they have been updated with a lack of regularity. We are starting to see that those become a way that we can plan for density. I think you are clearly going to see a move to get the community plans more activated and use those as a vehicle to create templates to accommodate higher density development. The community should be supportive of those, and the development community will also be supportive of those because they will have a higher degree of predictability in terms of what they can achieve in development projects and what the affordable housing should be. In Los Angeles, we will probably never have as-of-right development, but we will be moving towards a type of development that will minimize the need for legislative approval on a project-specific basis. That would be a reasonable and laudable goal.

GlobeSt.com: How does the development community view this growth?

Waite: I think it is viewed as positive for the development community. I think that they see the opportunities for creating really cutting-edge, forward-thinking mixed-use environments that have a really good combination of retail and housing, and in some cases even office space, and for the forward-thinking development community, I think it is a great opportunity. However, that is for the developers that are doing those types of projects. For the developers that are doing more typical single-family for-sale housing, the opportunities still exist but they are being pushed to the fringe because you simply don't have enough land in the urban core to accommodate for-sale detached housing. That is a very challenging environment. For mixed-use, creative and transit-oriented developers, I think Los Angeles is coming into its own and will continue to do so.