Los Angeles Housing Reimagined: K3 Holdings' Nathan Kadisha on Urban Affordability

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Date:

08 Apr 2025

“If we want to have a broad level of affordability in a city as big as Los Angeles, we have to focus on not just low and very low income but middle income tenants,” says Nathan Kadisha, Principal at K3 Holdings, addressing one of urban America’s most pressing challenges.

Kadisha offers a fresh perspective on the affordable housing crisis in Los Angeles—one that extends beyond conventional thinking and calls for a more nuanced approach to urban housing policy.

The Missing Middle: Expanding Our Understanding of Affordability

While much of the conversation around housing affordability focuses on the lowest income brackets, Kadisha identifies a critical blind spot in current approaches.

“Affordable housing historically has been viewed as a low income or very low income housing project,” Kadisha explains. “What I’m realizing is that we have to support the average or below average income earners of our city, because we don’t want them to get priced out like in Manhattan.”

This insight speaks to what makes a city economically sustainable. When middle-income residents—teachers, nurses, service workers, and young professionals—can no longer afford to live near their workplaces, the entire urban ecosystem suffers. The focus on extremely low-income housing, while necessary, misses this crucial “missing middle” that forms the backbone of any functioning city.

Private Expertise, Public Goals: Forging Effective Partnerships

Kadisha brings a pragmatic view to the perennial debate about public versus private solutions to housing affordability. Rather than seeing them as competing approaches, he advocates for strategic collaboration.

“The city wants to do a good job here, but it’s just not as experienced as many investors are,” Kadisha notes. “There are people that have been lifelong, generational builders… that know how to get projects done quickly, and should probably be the ones entrusted to do the development of the projects.”

This recognition of complementary strengths forms the foundation of Kadisha’s vision for addressing housing affordability. The public sector brings resources, regulatory power, and a focus on the public good, while private developers contribute expertise, efficiency, and practical knowledge of market dynamics.

“I think that we need programs to incentivize local experienced investors to develop and preserve affordable housing in Los Angeles,” he says. “The future could benefit significantly from productive conversation between investors and legislators. Because ultimately, the scale that they’re trying to achieve can only happen if the private sector is on board with their plan.”

Creating the Right Incentives: Aligning Economics with Social Goals

For this partnership to work, Kadisha emphasizes that incentives must be intelligently designed to align private economic interests with public housing goals.

“There are many different values that the government or public sector can provide, whether it’s financing or tax abatements,” Kadisha explains. “There have to be programs that benefit the developers in order to incentivize them. If an affordable project is no better than a market rate project, it’s hard to convince someone to go that direction.”

Understanding the economics behind development decisions is crucial. Different types of affordable housing initiatives require different incentive structures. For new construction, financing assistance might be most impactful, while “for the preservation [of existing affordable housing], tax is more beneficial,” according to Kadisha.

This nuanced approach to incentives demonstrates how sophisticated policy design can leverage private market forces toward public aims—a far more effective strategy than blanket mandates or purely public development.

The Density Imperative: Rethinking Land Use in Los Angeles

A central theme in Kadisha’s vision is the need for greater density in Los Angeles—a city famously spread out compared to other global metropolises.

“In general, we are an underdeveloped city,” Kadisha observes. “I think that as a whole, we can utilize our land more densely, like other cities around the world. There are many major cities that are significantly more dense than LA.”

This perspective challenges the traditional low-density model of Southern California development and points toward a more sustainable urban future. Greater density not only creates more housing units but can also support better public transportation, create more vibrant neighborhoods, and reduce car dependency.

Kadisha sees development and preservation as complementary strategies. “I think it’s a dual strategy of protecting the properties they have while also promoting new developments. They need to do both of them in tandem, to get the scale that they want.”

Rethinking Assumptions: The Parking Paradigm Shift

Perhaps one of Kadisha’s most provocative insights challenges the conventional wisdom around parking requirements—a seemingly technical issue that has outsized impacts on housing affordability.

“Parking is an extremely expensive component of a development if you go underground,” Kadisha explains. “It makes deals much less likely to pencil because they don’t earn much income on the space, so it’s very inefficient development.”

The potential impact of reforming these requirements is substantial. “If they can get 20, 30, 40, 50% more units out of a development by not having those parking requirements, I think it’s something at this stage in our housing crisis that we have to consider,” says Kadisha.

This observation aligns with changing urban lifestyles. “There are many people that don’t have cars that still want apartments, especially when you’re in an urban infill location, with walkability and access to rideshares and alternative transportation methods.”

By questioning the necessity of extensive parking in transit-accessible locations, Kadisha identifies a concrete way to significantly increase housing supply without additional land—a valuable insight for a land-constrained city like Los Angeles.

Beyond Incremental Solutions: Thinking Big About Housing

While Kadisha acknowledges the value of recent legislation promoting accessory dwelling units (ADUs) and lot splits, he advocates for more ambitious approaches.

“I think that any legislation they’ve introduced is great. I think that it can get some units into the urban markets. Do I think it’s enough to get to where they want to be? No,” Kadisha states. “I think that they need to think bigger and really encourage large-scale development.”

This call for bold action reflects Kadisha’s understanding of the scale of the housing crisis. Small-scale interventions, while helpful, cannot alone address a shortage of hundreds of thousands of units. Major developments, particularly in transit-rich areas, represent the most efficient path to meaningful progress.

Looking Forward: A Balanced Housing Market

As Los Angeles grapples with its housing challenges, Kadisha emphasizes the importance of addressing the fundamental supply-demand imbalance that drives unaffordability.

“With a combination of incentives for landlords to keep their properties affordable and more pro-development building codes, I think that we can manage the supply and demand of apartments in LA to prevent market overheating,” he says.

This focus on market fundamentals underscores the sophisticated understanding Kadisha brings to housing policy discussions. By focusing on the missing middle, leveraging private expertise, embracing density, reforming outdated requirements, and pursuing ambitious development goals, Los Angeles has an opportunity to create a more affordable, equitable urban environment.

“We hope to work together with all the public entities to promote the development and preservation of this beautiful city, Los Angeles,” Kadisha concludes—bridging business acumen with civic purpose and offering a pragmatic path forward for one of America’s most housing-challenged cities.