It has been more than half a year since Measure JJJ, an initiative that requires developers use union labor and allocate a portion of the property to affordable housing for any projects that are require a zoning change, passed last November, and it is already having an impact on development in Los Angeles. Laurie Lustig-Bower, a executive VP at CBRE and a development sales expert, says that Measure JJJ is a major concern for developers looking at potential land sites, and none want to take the risk of needing an exemption to the general plan because the cost increases rise significantly.

“Measure JJJ has had a negative impact. Developers have not wanted to go outside of the zoning that is allowed on the property, because the cost for an exemption is so punitive,” Lustig Bower tells GlobeSt.com. “If you try to ask for anything additional, like adding more height or anything at all that is outside of the zoning box, you have to use a portion of union labor and add on affordable housing. The developers that I have spoken with say that it increases their overall costs by 20% to 30%. At that point, it becomes too punitive to build.”

Measure JJJ was passed at the ballot box as a community response to the substantial increases in rental rates and the rise in luxury housing developments. The measure was meant to provide balance in the market, but Lustig-Bower doubts that will happen. “The city was hoping that Measure JJJ would give them more affordable housing, but I don't think it is going to,” she says. “It is too expensive to build and the projects don't pencil anymore. It stops people from even asking for a small change, even if that change is a positive thing for the community.”