The complex process of the DWP can add so much time, money and uncertainty to a project that some companies decide to build elsewhere, costing the city much needed investment, especially in housing.
The Doha Work Program was adopted this month The second of two policies It aims to make utilities more business friendly by lowering energy infrastructure costs for individual housing and commercial projects. It’s a good start, but there is a lot of work to be done.
Of course, DWP is not the only agency responsible for Los Angeles’ infamous red tape; Planning, public works, building and safety departments can be choke points, especially when it comes to new housing construction. But the tool stands out as presenting a unique challenge.
earlier this year, study The Los Angeles Works Council reports that it takes nearly four years for an apartment building to be approved and built in Los Angeles, and approval of an underground power installation by DWP was the second most significant delay, with apartment development taking about eight months. The biggest reason for the delay is the need to obtain discretionary approvals from city departments and the planning committee.
The Board of Water and Energy Commissioners and utilities leaders met with architects and developers to figure out how to make the process faster and more affordable. This has led to two new policies.
The first, dubbed Project Powerhouse, specifically targets homeless housing and 100% affordable housing developments that are part of Mayor Karen Bass’ executive order to speed up approvals. By assigning employees to meet with developers ahead of time about their power needs and prioritizing their projects at every step of the process, DWP has been able to reduce the time from first contact to power completion to average of five monthscompared to an average of 2.5 years for other projects.
In addition, the DWP will change the way it charges developers for electrical infrastructure built in the public right-of-way. Traditionally, when the construction of a new apartment complex, office, or other commercial project results in the need for more power for an area, the company charges the developer the full cost of laying high-voltage power lines on the street. For a subway line, that would add an estimated $2.2 million to the cost of the first construction — while projects built after that would pay nothing for the combined line. The expenditure was often a surprise overdue after the project received other city approvals. This is neither good nor fair policy.
In response, some developers have decided to build elsewhere or wait, hoping that another project will start first and foot the bill. Electric vehicle charging companies, in particular, said the policy was a huge disincentive to building new charging stations in Los Angeles, undermining the city’s main goal of encouraging residents to switch to electric vehicles.
For affordable housing projects and the homeless, cost can be a huge hit. Developers usually collect tax breaks, grants, and other funding up front. An unexpected DWP power line extension bill can delay a project for months or years if developers have to apply for more money — usually taxpayer funding — to cover the expenses.
Under the new policy, businesses will now pay their share of the cost of laying power lines, with future projects being billed for their share, resulting in the cost being evenly distributed among users. For example, the developer will now pay about $368,000 for the line extension, instead of the full $2.2 million.
For affordable housing projects and the homeless, the Doha Work Program will cover the projects’ share of public right-of-way line laying, estimated at $20 million this year. This is a significant cost of housing the homeless in months, not years. Developers will still be responsible for paying for the connection from their building to the shared power line.
Cynthia McClain Hill, chair of the Board of Water and Energy Commissioners, said the changes are an acknowledgment that public utilities in Los Angeles have been an obstacle to addressing the homelessness and affordable housing crisis. “We are not the solution, but we can be a great contributor.”
She said the goal is to learn from Project Powerhouse’s experience and start getting rapid approvals for all commercial projects by next spring. Los Angeles ultimately benefits when it is easier to build homes and allow for economic development and job creation. The Doha Work Program should be an aid, not a hindrance, to investment.