I Think This Might Be the Greatest ED1 Trade of All Time.

What matters

1. He Had Two Ways to Win  The developer's plan was simple: if the City wanted the project, sell it. If not, lease it, stabilize it, and own a brand-new affordable housing asset in one of Los Angeles' strongest rental markets.  He was betting on West Los Angeles. 
2. Being Early Was the Edge.The biggest advantage wasn't ED1, it was timing The developer moved before most investors understood the opportunity, acquired the land early. By the time everyone started chasing ED1, the best timing for this trade was already disappearing.  He capitalized on timing and acquired the land early, and executed while everyone else was acquiring and entitling .  
3. Don't Build Hoping the City Buys It.This transaction will inspire a lot of developers.  That's dangerous.  A City acquisition should be treated as upside, not your business plan.  I think this is where people made the wrong calculations.  They though HACLA would come buy it or they would easily fill the entire building with section 8 vouchers. 
4. No Parking Is Still a Risk.ED1 made it possible to build apartments without parking, but that doesn't mean it's easy to operate them.  I've had a hard time leasing units without parking, even in strong Los Angeles neighborhoods. For many renters, parking isn't a luxury - It is a MUST for them.  This project may have produced an exceptional outcome, but I wouldn't use it as proof that no-parking buildings are the future. Personally, I wouldn't build another project without parking unless the rents were priced at a significant discount. The operational headaches and leasing risk are simply too real.  Leasing a building with one or two less parking spots is one thing but leasing 44 units without parking could become a big headache.