Chapter 7
Economic Development

The Framework Element's fundamental economic development goals are twofold: to provide the physical locations and competitive financial environment necessary to attract various types of economic development to Los Angeles, and to encourage the geographic distribution of job growth in a manner supportive of the City's overall planning objectives. In order to encourage economic development in Los Angeles and effectively compete for limited opportunities in an increasingly competitive national economy, the City needs to offer meaningful development incentives. This is particularly true in those areas that have historically received a less than proportional share of Citywide employment and development opportunities.

Job retention and creation are directly related to enhanced economic development opportunities. The policies and programs presented below seek to increase employment in the City at a considerably higher rate than is currently projected. This objective is vitally important to Los Angeles' future, since higher job creation will not only provide improved employment opportunities for City residents, but also help maintain the City's fiscal health.

The economic development policies presented in this chapter are designed to facilitate business retention and job growth in several important ways. These include providing appropriate sites and infrastructure to accommodate future commercial and industrial growth; streamlining the City's permitting and regulatory processes; focusing the City's economic development efforts to more effectively utilize available resources; and, where appropriate, providing financial incentives to attract development to targeted districts, centers, and boulevards.

In the current economic environment, it has become increasingly clear that municipal incentives cannot create market demand. At best, public incentives can serve to focus existing demand into centers, districts, and mixed-use boulevards. This is only possible, however, to the degree that market forces are influenced by the effects of available public resources directed at economic development. The City's limited economic development resources must therefore be channeled into actions that optimize returns from affordable levels of public action. Given this fiscal reality and the City's desire to achieve its economic development objectives while preserving the stability of existing neighborhoods, the economic development policies focus growth in specific parts of the City.

To establish a basis for addressing the interrelated goals of job creation, stimulation of citywide economic development, and the provision of development incentives in specific parts of Los Angeles, the City should adopt the following types of areas as the focus of the Economic Development chapter (see Figure 7-1):

By focusing the City's economic development efforts to these areas, the Framework Element acknowledges that the goals, objectives and policies which follow cannot be generically applied to the entire City. Instead, the Framework Element directs its economic development efforts towards specific regions of the City, thereby optimizing its resources and improving the chances for success. In order to better understand how these areas relate to the City's economic development strategy, this chapter categorizes them as either market-linked areas or policy-linked areas; labels which indicate the kind of action that is required to foster the desired economic activity.

Policy-Linked Areas
Policy-linked areas are places that private developers have historically found unattractive due to a wide variety of socio-economic factors, including the low revenue- generating potential of commercial uses that result from the resident population's low-income level. As the name implies, these areas require government sponsored and championed policy initiatives to stimulate demand and affect the kind of positive economic changes deemed necessary to improve their quality of life.

Click here to view

Policy-linked areas are identified on the basis of economic need, such as a lack of existing employment centers, high resident unemployment rates, and low resident income levels. Based on these criteria, the City could target underdeveloped sections of South Central Los Angeles for policy-linked economic development incentives, including streamlining the development approval process and focusing the efforts of self-help programs on small business formulation assistance and job skill retraining.

Market-Linked Areas
Market-linked areas are places where incentive programs, together with a streamlining of the approval process, could facilitate development by removing existing obstacles where it would otherwise be attractive from a market perspective. Although these areas have historically been places where demand is in evidence, they require additional incentives to attract development in the current market environment. These are also areas where existing commercial centers and industrial concentrations could capture large shares of the City's future growth.

Industrial lands adjacent to the Port of Los Angeles are considered as a market-linked area. While there is potentially strong demand for industrial space in this area, demands are constrained by the limited availability of suitably sized sites with the required modern support services, making the development of new industry unfeasible. To address this constraint, the City could locate and/or assist in the assembly of suitable individual sites in the area so the private sector could more efficiently meet current and emerging market needs.

Another market linked area is the General Motors (GM) plant site, an area which requires reconfiguration and modernization if it is to become an asset to the City. By actively facilitating the re-use of this site or others in the San Fernando Valley, the City could reestablish this region, a highly sought after high-tech industrial location in the recent past, as a competitive "player" in the national economy and the emerging Pacific Rim marketplace as it develops in the coming decade.

The active industrial areas of South Central and Southeast Los Angeles are yet another kind of market-linked area. To ensure their long-term competitiveness and expansion, this kind of existing and growing industrial zone needs to be actively encouraged and stimulated. Since the South Central and Southeast industrial areas adjacent to Downtown Los Angeles currently serve a growing garment industry and light manufacturing market, this means identifying the locational needs of new companies and the job training needs of the existing work force, as well as helping to meet those needs by refining existing programs or providing new, more direct forms of assistance.

The mirror of these examples is the deteriorating industrial area with limited future industrial potential, which market forces could recycle into more viable land uses. While no direct public action would be needed in this example, a strategic decision should be made to allow such areas to recycle in response to the market through flexible zoning designations that would allow such changes.

Finally, another kind of market-linked area is one that requires the active stimulation of concentrated commercial and mixed-use development along established commercial corridors, at transit stations and in community centers. To the extent that new growth is accommodated in these areas, cost efficiencies are maximized both from the development as well as the infrastructure perspective. Neighborhoods also benefit as a result of concentrating development, because targeted growth limits the intrusion of development on existing residential neighborhoods. From a market perspective, such concentrated development maximizes potential foot traffic within pedestrian accessible areas, increasing potential volume levels as well as market appeal.

To address the challenges facing the market-linked areas discussed above, the City can undertake a variety of actions, two examples of which follow:

Establish priority areas within Los Angeles called "industrial preservation zones," and focus active assistance programs within them to maximize the impact of anticipated limited resources and assure a viable range of competitive industrial sites in the City to help maintain a core manufacturing base through the turn of the century.

Encourage mixed-use commercial and residential development within targeted areas throughout the City through zoning, entitlement processes and incentive programs, recognizing that market forces will ultimately decide where such actions will in fact be implemented.

In addition, the City must take advantage of the critical role of the Port of Los Angeles and the Los Angeles International Airport in supporting the local economy. These facilities are major generators of economic activity, both in their immediate vicinity and throughout the entire Southern California region. Under the Charter of the City of Los Angeles, these facilities are operated by City departments each directed by a Board of Commissioners. The Harbor Department and the Department of Airports are proprietary and self-supporting departments of the City that prepare, control, and administer their own budgets and have substantial authorities over the properties that they manage.

As a result of the crucial role they play in economic development and their unique organizational status, these areas can benefit from and will require additional City actions form those designed to assist other market-linked areas. In addition to receiving incentives initiated in other market-linked areas, such actions as expansion of the City's foreign trade zone, permit facilitation and regulatory relief, and other programs appropriate to these facilities should be investigated to facilitate economic activity throughout the City. Such actions will support all of the critical industrial sectors (trade, tourism/entertainment, transportation, and technology) upon which the future economy will be based.

1. The City's current economic strategy is disjointed, to the extent that it has one. As a result, economic development tends to occur in haphazard manner throughout Los Angeles. The City must therefore create a cohesive economic development strategy to effectively focus its public resource expenditures in a concentrated and orderly manner.
2. The City's current jobs/housing ratio must be maintained. If the jobs/housing ratio declines, that is, if the number of jobs declines in relationship to the number of housing units, then the City's economic vitality may spiral downward. If the jobs/housing ratio increases, that is, if the number of jobs increases in relationship to the number of housing units, the housing shortage and the need for affordable housing would be exacerbated.

The baseline 2010 employment and housing forecasts prepared by the Southern California Association of Governments (SCAG) indicate that the City's jobs/housing ratio will decline by 2010. This decline would be economically detrimental to the City for two major reasons:

Employment opportunities for existing and future City residents would become more limited, potentially resulting in a higher resident unemployment rate; and

The City's fiscal structure has historically been dependent on a jobs-rich environment. A decline in the jobs/ housing ratio would reflect a growth pattern in which residential development outpaces commercial and industrial growth. Given that nonresidential land uses generate proportionately more fiscal revenue than residential development, a decline in the jobs/housing ratio would represent an undesirable growth pattern for the City from a fiscal perspective. Whereas demand for municipal services would continue to grow commensurate with population growth, the City's revenue base and related ability to provide municipal services would grow at a lower rate. This imbalance would potentially result in the City being unable to maintain its current levels of municipal services, much less meet desirable standards for such services.


To effectively compete for the limited employment opportunities in an increasingly competitive national economy, and in order to encourage economic development in Los Angeles, the City must create market and policy driven incentives. These incentives include:

  • Governmental reforms that streamline and shorten the application process in response to the needs of existing businesses and the "targeted" industries';
  • Creation and implementation of a comprehensive economic development strategy to focus the expenditure of public resources into a coordinated series of programs and policies;
  • Commercial and industrial retrofitting and reuse policies and programs to provide modern and world-competitive commercial and industrial buildings and sites;
  • Job-training, skills-matching, and educational programs to enhance the available labor pool with skills well- matched for the existing and targeted industries;
  • Active marketing to encourage "emerging" industries to locate in the City of Los Angeles, with an emphasis on the attraction of environmentally-oriented and clean industries; and
  • Active land use and transportation planning and inducements to create concentrations of commercial and mixed-use growth along commercial corridors, at transit stations, and within community centers. To the extent that new growth is accommodated in these areas, cost efficiencies would be maximized from the neighborhood preservation and the infrastructure perspectives.
5. The strategic goal of attracting nearly 400,000 new jobs is not necessarily incompatible with protecting the stability of existing communities. In order to prevent encroachment into existing neighborhoods, future growth should be focused. Areas identified on the Framework Element land use map represent adequate capacities to accommodate the commercial and industrial growth necessary to support the desired job creation goal.


The following presents the goals, objectives, and policies related to economic development in the City of Los Angeles. Programs that implement these policies are found in the last chapter of this document. Programs are also referenced after each policy in this document.

A vibrant economically revitalized City.

Objective 7.1

Focus available resources on a coordinated and comprehensive effort to promote economic activity in Los Angeles, including an aggressive marketing program that communicates the resources and assets available within the City.

7.1.1 Reorganize local government as needed to coordinate economic development and business support services functions. (P35, P49)
7.1.2 Encourage community-based service and development entities in efforts to create small business expansion at the local level. (P35, P43)
7.1.3 Create and implement an economic development strategy. (P35)
7.1.4 Develop an infrastructure investment strategy to support the population and employment growth areas. (P36)
7.1.5 Allocate available public resources within the context of the market demand anticipated over the next five years. (P38)
7.1.6 Identify Federal and State mandates which represent unreasonable barriers to future economic development in the City, and begin to address these mandates through appropriate lobbying efforts. (P27)

A City with land appropriately and sufficiently designated to sustain a robust commercial and industrial base.

Objective 7.2

Establish a balance of land uses that provides for commercial and industrial development which meets the needs of local residents, sustains economic growth, and assures maximum feasible environmental quality.


7.2.1 Identify the characteristics of any surplus City-owned land and determine the appropriateness of designating this land for public, commercial, industrial, or residential uses. (P26)
7.2.2 Concentrate commercial development entitlements in areas best able to support them, including community and regional centers, transit stations, and mixed-use corridors. This concentration prevents commercial development from encroaching on existing residential neighborhoods. (P18)
7.2.3 Encourage new commercial development in proximity to rail and bus transit corridors and stations. (P1, P18)
7.2.4 Ensure that the City has enough capacity to accommodate the development of general commercial uses which support community needs in all parts of Los Angeles. (P1)
7.2.5 Promote and encourage the development of retail facilities appropriate to serve the shopping needs of the local population when planning new residential neighborhoods or major residential developments. (P18, P38, P40)
7.2.6 Concentrate office development in regional mixed-use centers, around transit stations, and within community centers. (P1, P18)
7.2.7 Encourage the introduction of telecommuting facilities in dispersed community centers and mixed-used corridors to reduce total vehicle miles traveled (VMT). (P2, P47)
7.2.8 Retain the current manufacturing and industrial land use designations, consistent with other Framework Element policies, to provide adequate quantities of land for emerging industrial sectors. (P1, P18)
7.2.9 Limit the redesignation of existing industrial land to other land uses except in cases where such redesignation serves to mitigate existing land use conflicts, and where it meets the criteria spelled out in Policy 3.14.6 of Chapter 3: Land Use. (P18)
7.2.10 Ensure that the City's industrial sites are regionally competitive to maintain and enhance a core manufacturing base. (P37, P38, P39)
7.2.11 Ensure that the City has sufficient quantities of land suitable to accommodate existing, new and relocating industrial firms, whose operations are appropriate to a specific location in Los Angeles. (P18, P26, P38)
7.2.12 Establish, as shown in Figure 7-1, the area adjacent to the Port of Los Angeles, the rail corridor bisecting the San Fernando Valley, and the South Central/Southeast industrial area as market-linked targeted industrial areas (market-linked areas are described on page 7-4). (P1, P18)
7.2.13 Facilitate environmentally sound operations and expansion of the Port of Los Angeles and the Los Angeles International Airport as major drivers of the local and regional economy. (P3, P5, P6, P42)
7.2.14 Take steps to assure that new industries developed are sensitive to environmental and conservation issues, and that cumulative environmental impacts are addressed.

A City with thriving and expanding businesses.

Objective 7.3

Maintain and enhance the existing businesses in the City.

7.3.1 Maitain the Downtown regional core as the preeminent center for office development in the City, the metropolitan area, and the region. Maintenance of this status is key to the City's economic and fiscal strength during the transition to a more service oriented economy. (P1, P18)
7.3.2 Retain existing neighborhood commercial activities within walking distance of residential areas. (P1, P18)
7.3.3 Retain the City's existing employment base through an outreach program to existing businesses and an ongoing assessment of their specific land use requirements. (P35, P62)
7.3.4 Recognize the crucial role that the Port of Los Angeles and the Los Angeles International Airport play in future employment growth by supporting planned Port and Airport expansion and modernization that mitigates its negative impacts. (P5, P40)
7.3.5 Improve the movement of goods and workers to industrial areas. (P3, P4, P45)
7.3.6 Retain the City's existing manufacturing base through an outreach program to existing businesses and an ongoing assessment of their specific land use requirements. (P35, P36, P62)
7.3.7 Prioritize the retention and renewal of existing industrial businesses. (P35, P36, P37)
7.3.8 Assist existing industries located in Los Angeles with their expansion plans and/or relocation efforts to find suitable industrial sites in the City. (P36, P37)

A City able to attract and maintain new land uses and businesses.

Governmental Services and Administrative Processing

Objective 7.4

Improve the provision of governmental services, expedite the administrative processing of development applications, and minimize public and private development application costs.

7.4.1 Develop and maintain a streamlined development review process to assure the City's competitiveness within the Southern California region. (P67, P68)
7.4.2 Maximize opportunities for "by-right" development. (P4, P18)
7.4.3 Maintain development fee structures that do not unreasonably burden specific industry groups, are financially competitive with other cities in the region, and reduce uncertainty to the development community. (P49)
7.4.4 Reform municipal service delivery through combining the services provided by the various departments (planning, building and safety, water and power, etc.) at decentralized locations throughout the City. (P35, P54, P62)

Target Industries

Objective 7.5

Capture a significant share of regional growth in the "targeted" or emerging industries in the City of Los Angeles.

7.5.1 Identify emerging and pro-actively clean industries to specifically attract to the City of Los Angeles. (P35)
7.5.2 Maintain an ongoing dialogue with representatives of major firms in the target industries to determine facility/siting, infrastructure, and labor force requirements. (P35, P37)
7.5.3 Strive to provide an industrial business climate that meets the needs of the targeted industries. (P21, P35, P36, P40)
7.5.4 Proactively market Los Angeles to emerging industries to encourage them to locate within the City, with an emphasis on the attraction of environmentally-oriented and "clean" industries. (P35, P40)

Commercial Uses

Objective 7.6

Maintain a viable retail base in the City to address changing resident and business shopping needs.

7.6.1 Encourage the inclusion of community-serving uses (post offices, senior community centers, daycare providers, personal services, etc.) at the community and regional centers, in transit stations, and along the mixed-use corridors. (P18)
7.6.2 Reuse deteriorating community or regional centers for wholesale or outlet centers when the newly emerging retail trend requires larger sites not otherwise available to the City. (P18)
7.6.3 Facilitate the inclusion of shopping facilities in mixed-use developments that serve the needs of local residents and workers. If necessary, consider utilizing financing techniques such as land write-downs and density bonuses. (P18)

A City with a highly qualified labor force.

Objective 7.7

Achieve an effective "match" between the qualifications of the local labor force and the anticipated personnel requirements of existing and emerging industries in the City.

7.7.1 Expand job training programs offered in the City to more adequately address the skill requirements of existing and emerging industries. (P28, P37)


A fiscally stable City.

Objective 7.8

Maintain and improve municipal service levels throughout the City to support current residents' quality of life and enable Los Angeles to be competitive when attracting desirable new development.

7.8.1 Place the highest priority on attracting new development projects to Los Angeles which have the potential to generate a net fiscal surplus for the City. (P35, P36)
7.8.2 Implement proactive policies to attract development that enhances the City's fiscal balance, such as providing financial incentives and permitting assistance. (P35, P36, P40, P67)
7.8.3 Encourage mixed-use development projects, which include revenue generating retail, to offset the fiscal costs associated with residential development. (P18, P22)


A range of housing opportunities in the City.

Objective 7.9

Ensure that the available range of housing opportunities is sufficient, in terms of location, concentration, type, size, price/rent range, access to local services and access to transportation, to accommodate future population growth and to enable a reasonable portion of the City's work force to both live and work in the City.

7.9.1 Promote the provision of affordable housing through means which require minimal subsidy levels and which, therefore, are less detrimental to the City's fiscal structure. (P1, P2, P23, P29, P69)
7.9.2 Concentrate future residential development along mixed-use corridors, transit corridors and other development nodes identified in the General Plan Framework Element, to optimize the impact of City capital expenditures on infrastructure improvements. (P1, P18)
7.9.3 Preserve existing single-family neighborhoods throughout the City to assure a continuing supply of variously priced single-family homes from the existing inventory. (P1, P18)

A distribution of economic opportunity throughout the City.

Objective 7.10

Program resources in a manner that encourages appropriate development, housing opportunities, transit service and employment generation in all areas of the City, with particular emphasis on those portions of the City which historically have not received a proportional share of such opportunities, consistent with the City's overall economic policies.

7.10.1 Focus available implementation resources in centers, districts, and mixed-use boulevards or "communities of need." (P35)
7.10.2 Support efforts to provide all residents with reasonable access to transit infrastructure, employment, and educational and job training opportunities. (P3, P44)
7.10.3 Determine appropriate levels of service for, but not limited to, educational facilities, hospitals, job training and referral centers, and transportation opportunities in the "communities of need." (P3, P28)

| Table of Contents | Framework Home | Next Chapter |