LA City Measure JJJ (passed 2016) requires specific affordable housing set-asides and prevailing wage provisions for certain multifamily development projects — affecting new construction economics.
Measure JJJ imposed affordable housing requirements and construction labor standards on qualifying large-scale multifamily projects requiring discretionary approval. The effects increased construction costs and slowed project delivery compared to pre-JJJ baselines.
For LA multifamily development underwriting, Measure JJJ added meaningful cost to new construction. For existing inventory sellers, JJJ doesn't apply directly but has slowed the new supply pipeline — indirectly supporting existing-inventory values.
From the Sterman LA Multifamily Glossary — defined the way a broker with $1.41 billion across 254 closed transactions actually uses these terms.
Michael Sterman, Senior Managing Director Investments, Marcus & Millichap.
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