Casey Lynch ('09) founded real estate development company Local Construct in 2008, along with classmate Mike Brown ('09). The company describes itself as "a private real estate investment and development company focused on improving development patterns throughout the western United States." Lynch and Local Construct made headlines recently for their 18-unit Blackbirds housing project in Echo Park, designed by architect Barbara Bestor. The Los Angeles Times described it as "the latest urban infill development built under the city's Small Lot Subdivision Ordinance, which was designed to allow developers to build several detached homes on a single parcel of land. In this case, 18 homes have replaced five dilapidated single-family homes. Residents will own their house and the land and will have no homeowners association fees. Trash disposal, mailboxes and gardens will be communal."
With the September 2015 UCLA Anderson Forecast conference focused on real estate, under the title Housing Is Back, the UCLA Anderson Blog took the opportunity to interview Lynch and get his thoughts on some key issues facing housing in the city of Los Angeles.
Q: One of the problems your company is interested in solving is housing affordability. What types of projects may be built to address this important issue?
The answer is any type of housing. The areas of the country with the most acute affordability issues are cities, including Los Angeles, that are severely supply constrained. The combination of regulatory hurdles, public policy constraints, restrictive parking requirements and limited land make it very difficult to add housing in dense infill markets. We rarely experience affordability issues in places where supply is free to keep up with (or exceed) demand. For example, they are adding nearly as much housing annually in aggregate in Denver as we are in Los Angeles. As a result, Denver has experienced a major urban renaissance while maintaining greater affordability.
There is clearly a place for government to have a more direct role in creating affordable housing, but we are so far out of balance in L.A. that without significantly reducing barriers to the creation of market rate housing we won’t be able to make a dent in pent-up need.
The Small Lot Subdivision Ordinance is an example of successful land use policy. It has been effective in creating new housing opportunities in neighborhoods that have limited potential for very high-density projects. Many of the older neighborhoods in L.A., such as Echo Park, require redevelopment but don’t have the infrastructure to support large projects.
Our goal with Blackbirds was to utilize this medium-density tool to create a type of housing that mimics the better qualities of single-family housing within the constraints of an urban environment. The result is what we call a micro-neighborhood of 18 homes that is sensitive to the surrounding neighborhood. The focus of the project was on private and semi-public outdoor spaces that create opportunities for community interaction. We achieved this by building smaller houses and creating a communal parking area that opened up the site for more green and open space for residents to interact.
Q: The age-old question in L.A. when talking about increased density is traffic. What are your thoughts on how the city might deal with a potential increase in traffic?
The evidence is pretty compelling at this point that creating more density actually reduces parking and traffic problems. Donald Shoup, a professor at UCLA, has done a lot of interesting research on this topic. Building housing near jobs has a profoundly positive impact on the environment by reducing automobile use associated with sprawl and also [improves] the general well-being of society.
Clearly, we need to reduce or eliminate parking requirements, restrict opportunities for automobile use by using road diets and expanding bike and bus lanes, and invest heavily in upgrading public transportation systems.
Q: What are your thoughts on gentrification? Are you concerned that some of L.A.’s historic neighborhoods will change too much or too quickly and we might force out longstanding residents — and with them, culture and history?
What’s interesting is that gentrification is really a subtext to the massive secular trend of urbanization that is causing rapid change in cities. We travel frequently across the West and we’ve encountered urban revitalization in literally every city we’ve visited. In older cities, many long-time residents have lived through decades of the opposite trend: urban decay and suburban expansion. Urbanization is shockingly different from what people are used to and has very negative consequences for residents faced with displacement. In newer or smaller cities you often don’t have this challenge because they don’t start with many residents living in the urban core. Downtown L.A. is a microcosm of this issue. Because it historically consisted of mostly commercial uses, very few individuals get displaced by new development, which is, therefore, more welcomed.
The most effective way to avoid displacement of long-time residents is to build enough housing to accommodate everyone and maintain affordability. The challenge we face is that many view new development as denigrating to the existing character of a neighborhood. The Small Lot Ordinance has received a lot of criticism on that account, even though it has been effective in creating much needed housing.
Generally, our view is that the fabric of cities is always evolving and that the environmental and social benefits of urbanization and densification greatly outweigh the costs of trying to maintain outdated urban housing typologies. Urbanization appears to be a trend that will persist, so we need to embrace change and build more housing so that we can maintain the diversity that makes our cities vibrant.
Q: What can you tell us about your future projects? Where are the areas of the city ripe for residential infill projects?
While we are still active in L.A., we are currently focusing most of our efforts in smaller, western cities like Boise and Salt Lake City. The downtown areas of these cities are benefiting from the same forces of urbanization as coastal cities, but offer much greater affordability and fewer regulatory barriers to new development. In Boise, in particular, we have been able to play a big role in redeveloping what promises to be an incredibly vibrant urban core. In 2014, we used historic tax credits to convert the Owyhee (the oldest hotel in Idaho) into a 120,000-square-foot mixed-use apartment, office and retail project. Its success has set the stage for us to break ground later this year on two of the first market rate apartment projects in downtown Boise. We feel that cities like these are very well positioned for future growth and will stand up well to the environmental and housing affordability challenges we face across the country.
To learn more about Local Construct, please visit the company website.
To register for the upcoming UCLA Anderson Forecast conference, to be held September 28, 2015, please visit the Forecast's website.