City Council delays vote on CRA waiver for Bunker Hill parcels after wide-ranging debate on affordable housing

The Los Angeles City Council on June 6 voted to continue action on a Community Redevelopment Agency (CRA) request to waive the agency's adopted affordable-housing policy for two agency-owned parcels on Bunker Hill, setting the matter for further consideration on June 27.

The waiver would allow market-rate development on two downtown parcels without the CRA's usual on-site affordable set-aside, and would instead redirect proceeds from the sale or lease of the parcels to affordable-housing and economic-development projects in Council District 9 south of the Santa Monica Freeway, CRA representative Don Spivak told the council. Spivak said the agency's analysis showed the parcels would generate about $7 million in revenue if developed at market rate, while enforcing the housing policy on those sites would create a subsidy gap of roughly $6 million to $7 million.

The debate split council members. Councilmember Hernandez moved the minority report urging the city to preserve mixed-income housing on the Bunker Hill sites and to avoid setting a precedent that would funnel downtown redevelopment dollars out of the area where they are generated. "We shouldn't have economic barriers to where people live," Hernandez said, urging mixed-income development in downtown rather than diverting funds.

Supporters of the CRA recommendation, including Central City Association president Carol Schatz, argued downtown requires a broader mix of market-rate housing and that the parcels are unusually costly and technically difficult to develop. "Downtowns all over the country . . . require a very strong residential base to bring themselves back, and that residential base has to be mixed income," Schatz said, noting the downtown has produced thousands of affordable units but only a small number of market-rate units.

Councilmember Walters, sponsor of the majority report, said the decision reflects an effort to direct scarce redevelopment proceeds to an area south of the freeway that has generated little revenue but has pressing needs for supermarkets, open space and job opportunities. Walters said the majority recommendation requires that proceeds be used to build a minimum of 130 affordable units at alternate sites south of the freeway and that the affordable projects be developed concurrently with the market-rate project on Bunker Hill.

Council members pressed agency staff on timing and safeguards. CRA staff said the agency expected to issue the request for qualifications within days, allow a 30- to 45-day response period, then a 60-day request-for-proposals phase and return with a developer recommendation within about 90 days. The majority report, as clarified on the floor, requires the alternate affordable units to be identified and built as part of a concurrent pipeline so funds are not deposited and held indefinitely.

After extended debate and multiple motions, the council voted 14-0 to continue the item to June 27 to give council members additional time to review supplemental material and to accommodate member schedules.

Why it matters: The decision would change how CRA-generated redevelopment resources for downtown are used, potentially shifting funds from on-site set-asides to targeted projects elsewhere in the city. Supporters say the move will unblock a hard-to-develop site and deliver resources to a high-need district; opponents warn it could reinforce economic segregation and erode the policy that aims to produce mixed-income housing across redevelopment sites.

Next steps: The council will revisit the waiver on June 27. CRA staff said they expect to return with a developer recommendation within about 90 days if the waiver proceeds.