Executive Summary
11007-11013 Hesby Street is a two-parcel, 15,008 SF (0.34 acres) development site just south of Magnolia Boulevard and just west of Lankershim Boulevard, on the southern edge of the NoHo Arts District. Both parcels are zoned R4-1VL with a High Medium Residential land use designation and sit inside a TOC Tier 3 incentive area, an unusually strong zoning package for this block of the South Valley, where nearly all recent land trades have been R3 or commercial parcels.
The value of the offering is in the land. The site supports up to 37 apartment units by right, approximately 63 units under TOC Tier 3, roughly 75 units through the AB 1287 stacked density bonus, and an effectively envelope-limited unit count as a 100% affordable AHIP/ED1 project. Four closed South Valley affordable-development land sales from March 2025 through July 2026 establish a band of $172 to $214 per land SF, averaging $193 per SF, and three of the four were purchased by affordable housing developers, with CMFA bond financing since recorded behind two of them. Applied to the subject, with a premium warranted by its superior R4/TOC zoning, the comp set supports pricing guidance of $2.95M to $3.15M.
Subject Property
The two contiguous 50-foot lots assemble into a clean, flat, mid-block R4 site with alley-adjacent access off Hesby Street. The parcels are offered for their land value: the existing improvements are five older rental units in five small structures (3,519 SF of combined building area) that do not represent the highest and best use of 15,008 SF of R4-1VL / TOC Tier 3 land in this location.
Development Pathways
R4-1VL with TOC Tier 3 gives a buyer five distinct ways to build the site, each with a different unit count, timeline, and buyer pool. All unit counts are planning-level estimates to be confirmed by the buyer's architect and land-use counsel.
- One unit per 400 SF of R4 lot area on 15,008 SF supports 37 units with no discretionary density approvals.
- Height District 1VL allows 3 stories / 45 feet at a 3:1 FAR, roughly a 45,000 SF envelope.
- No affordability set-aside required; conventional podium or garden product.
- Tier 3 grants a 70% density increase (about 63 units), 50% more FAR (to 4.5:1), and 2 additional stories / 22 feet.
- Set-aside options: 23% Lower Income, 14% Very Low, or 10% Extremely Low Income units.
- Parking capped at 0.5 spaces per unit, and AB 2097 can eliminate residential parking minimums entirely this close to major transit.
- The City's Affordable Housing Incentive Program (AHIP) and ED1 give 100% affordable projects streamlined ministerial processing, and near major transit the density cap is removed entirely: the buildable envelope, not zoning density, sets the unit count.
- Up to 3 additional stories / 33 feet over the base zone and zero required parking.
- This is the exit the comp set proves: the Whipple and Hoffman sites both recorded CMFA affordable bond financing at or after closing.
- The Citywide Housing Incentive Program (2025) consolidated and expanded the City's bonus menu, adding the Mixed Income Incentive Program alongside the updated state density bonus and AHIP.
- In transit-served areas like this one, CHIP incentives meet or exceed the TOC Tier 3 package, with additional FAR, height, and open-space relief options.
- A buyer elects CHIP or TOC, whichever menu pencils better for their program.
- AB 1287 (2023) layers a second state density bonus on top of the base bonus, up to a 100% total density increase, in exchange for additional very low or moderate income units.
- At the full stack, roughly 75 units (37 base units x 2.0), with incentives, concessions, and waivers under state law and AB 2097 parking relief.
- The moderate-income option opens a for-sale mixed-income condominium program, not just rental.
Land Sales Comparables
Four South Valley development sites purchased for affordable and multifamily redevelopment, all closed between March 2025 and July 2026, all within approximately 1.7 miles of the subject.
| # | Address | Submarket | Zoning | Lot SF | Sale Price | $/Land SF | Closed | Dist. |
|---|---|---|---|---|---|---|---|---|
| 1 | 12021-12027 Hoffman St | Studio City | R3 | 15,600 | $3,345,000 | $214.42 | Jul 2026 | 1.7 mi |
| 2 | 11143-11153 Acama St | North Hollywood | R3 | 27,000 | $5,301,000 | $196.33 | Jul 2025 | 1.1 mi |
| 3 | 5137-5145 Colfax Ave | North Hollywood | C2 | 16,000 | $3,030,000 | $189.38 | Nov 2025 | 1.0 mi |
| 4 | 10953 Whipple St | North Hollywood | R3 | 17,982 | $3,100,000 | $172.39 | Mar 2025 | 1.0 mi |
| Average | 19,146 | $3,694,000 | $193.13 |
Lot sizes, recorded prices, and closing dates verified against LA County Assessor and recorder data, August 2026; $/SF computed from the recorded price over assessor lot area. Comp 1 closed with $9.02M of CMFA affordable bond financing. Comp 2 is a three-parcel assemblage at $1,767,000 per parcel. Comp 4 subsequently re-traded in December 2025 at $3,600,000 ($200.20 per SF) into an affordable ground-lease structure with a $16.3M CMFA bond loan, confirming the affordable exit at a higher basis.
Every comparable is an R3 or commercial parcel. The subject's R4 zoning allows one unit per 400 SF of lot area, double the R3 standard of one per 800 SF, before TOC bonuses. On a per-buildable-unit basis the subject is the strongest site in this set.
Key Takeaways
The band is $172 to $214 per land SF. Four closed trades within 1.7 miles, averaging $193 per SF, define where South Valley development land is clearing.
Affordable capital is the buyer pool. Three of four comps went to affordable developers, with CMFA bond financing of $9.02M and $16.3M recorded behind two of them. These buyers underwrite to the envelope, not to existing income.
The subject out-zones every comp. R4-1VL plus TOC Tier 3 delivers roughly twice the by-right density per SF of land of the R3 comps, supporting pricing at or above the top of the band.
The market is moving up. The trades step from $172 per SF in March 2025 to $214 per SF in July 2026, and the Whipple re-trade printed $200 per SF in December 2025 on the same dirt that sold for $172 nine months earlier.
Location does real work. One block off Lankershim at the NoHo Arts District, in a Metro station area, where TOC Tier 3 and transit-based state incentives are at their strongest.
Pricing Recommendation
The guidance applies the verified comp band to the subject's 15,008 SF and positions the site at the upper end for two reasons: the subject's R4 / TOC Tier 3 package supports materially more units per land SF than any R3 comp in the set, and the most recent print (Hoffman, July 2026, $214.42 per SF) shows the market has already traded through the middle of the band. At the $3.05M midpoint, an affordable developer building through the TOC or AHIP/ED1 pathways is at approximately $48,400 per buildable unit, well inside where this buyer pool has been transacting.
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