What is a TOC tier, and what is it worth to my LA property?
TOC (Transit Oriented Communities) is Los Angeles's density-bonus program for sites near major transit. Tiers run 1 through 4, where the closer and better the transit the higher the tier, and grant residential density increases from roughly 50% (Tier 1) up to 80% (Tier 4), plus reduced parking and other incentives, in exchange for setting aside a percentage of affordable units. For a multifamily lot, a high TOC tier can make the land worth more than the building sitting on it.
Answered by Shaya Lowenstein, a Los Angeles multifamily broker at Lyon Stahl Investment Real Estate, CA DRE 01942326, with 15 years in apartment buildings and land across Los Angeles County. His closed sales are published with addresses and recording dates, so anything claimed here can be checked against the county record.
Start typing the address. The answer comes from the county roll and the city ordinance, on this page, free, with no email required.
How tiers are assigned.
Tier is determined by distance to a "major transit stop," generally the intersection of two frequent bus lines or proximity to a Metro rail station. Tier 3 and Tier 4 sites cluster around rail stations in Koreatown, East Hollywood, Mid-Wilshire and along the Expo/E Line. You can confirm a parcel's tier through ZIMAS.
The land-value math.
A 7,500 SF R3 lot might support ~10 units by right. At TOC Tier 3 with a 70% bonus that becomes ~17 units, which changes the buyer from an operator pricing income to a developer pricing buildable units. When I value RSO buildings on high-tier lots, I price them both ways: as an income stream and as dirt. The higher number sets the strategy.
EDUCATIONAL ONLY, NOT LEGAL OR TAX ADVICE. RATES, THRESHOLDS AND ORDINANCES CHANGE, AND SEVERAL OF THE FIGURES HERE DEPEND ON FACTS SPECIFIC TO YOU. CONFIRM ANYTHING YOU PLAN TO ACT ON WITH YOUR OWN ATTORNEY OR CPA, OR WITH THE AGENCY THAT SETS IT.
Does TOC require affordable units?
Yes. Each tier requires a set-aside of extremely-low, very-low, or low-income units (the percentage varies by tier and income level chosen). The bonus only applies to housing projects that include them.
Is TOC the same as ED1?
No. TOC is a density bonus for mixed-income projects near transit; ED1 is a streamlined approval path for 100% affordable projects. On some parcels the ED1 scheme pencils to more units than TOC, so it is worth pricing both.
SHAYA LOWENSTEIN · LYON STAHL INVESTMENT REAL ESTATE · DRE #01942326 · (323) 944-2221