Figuring out Unit Count for a Potential Ground-up MF Development
In Los Angeles, we do not rezone lots. Since we do not do any rezoning, we typically know how many units we can do based on zoning alone….
Most of our lots have been LAC2, LAR3, or LAR4
C2 lots = 1 unit per every 400sq ft of the lot
R3 lots = 1 unit for every 800sq ft of the lot
R4 lots = 1 unit per every 400sq ft of the lot
Above is the zoning of the lots that we focus on.
RD1.5 I = 1 unit per every 1500 sq ft of the lot (these are typically too low density for us, but good for guys starting out building 4-plexes)
Calculation example:
Ex: 10,000 sq ft LAR3 lot, means you can do 10,000/800 = 12.5 units (you round this down) to 12 units.
Then we apply either SB-1818 (State Bonus Density), or TOC (Transit Oriented Communities)
TOC and SB-1818 are two different entitlement processes:
SB1818 is based on state law.
TOC is a city of LA entitlement program.
Assuming you’ll be using SB-1818 and getting 35% bonus density, you multiply 12 x 1.35 = 16.2 and you round this number UP!
Assuming you are using TOC-Tier 3, you get 70% bonus density.
12 x 1.7 =20.4, you would round up to 21 units.
Base Units = Round Down.
Bonus Density Units = Round Up
AS A DEVELOPER: LEARN THE ZONING CODE IN YOUR CITY. KNOW IT BETTER THAN THE LAND USE ATTORNEY AND ARCHITECTS.
Most of our projects have been SB-1818 (avoiding planning for the most part, and if we do go to planning, it’s only for ministerial approvals such as “on menu” height incentive)
ministerial acts - do not require the exercise of professional judgment or discretion, meaning no planning hearings.
SB-1818 projects pre-covid, we’d usually be able to get permits RTI (Ready to Issue in 7-10 months).
We’ve done 4 TOC projects and they took 18-24 months to get to RTI (without appeals)
You get more units with TOC, if you fall into the TOC Tier 1-4 zones, but you also add a year to the timeline.
Adding a year is harder on the IRR if your investors are IRR driven.
Most of our deals have been SB-1818 (because we started developing prior to TOC and its shorter process than TOC by about 9-12 months, so we go the SB-1818 route if it makes sense)
*NOTE: Now, you can add up to 25% of the existing unit count (round down) as ADUs after the final. So add some storage/gyms to later convert to ADUs and increase your unit count!
(I was doing a part of the DD process, but needed to break this into it’s own post)
TOC DB Approved Final <~~download
TOC Clarifications <~~~download
SB-1818 Bill <~~download