L.A.'s Reuse Ordinance: A Victim of its Own Success

Los Angeles's landmark adaptive reuse ordinance has been credited with helping to spur downtown's dramatic growth over the past decade. However, developers now find it cheaper to build new than reuse the area's historic structures.

Ryan Vaillancourt describes the odd situation whereby the tool that made possible downtown L.A.'s wave of condo conversion projects - 1999's Adaptive Reuse Ordinance - is now rarely utilized, "even as Downtown is in the early stages of a second housing boom."

"The paradigm shift toward new construction stems in part from a curious market reality in which it is simply too expensive to turn old buildings into housing, developers say. It’s to the point that it actually costs less to build on an empty plot."

"Construction costs are significantly higher today and most of the buildings that were best suited for residential conversion have already been transformed," explains Vaillancourt. "But perhaps the biggest strain on adaptive reuse growth is, ironically, the law’s own success. The residential surge and the flurry of restaurants and bars that accompanied it over the past 10 years have driven up the demand for housing. In the process, long depressed property values have surged, shrinking the potential profit margin for today’s developers."

"In other words, it was easier to justify the high cost of renovating a historic building when it cost relatively little to buy it."

Developers and city leaders are looking at ways to either adapt the ordinance, or develop new tools, to ensure that downtown's stock of historic buildings continue to attract investment.

Full Story: With Adaptive Reuse Options Limited, Developers Adapt

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