Speaking to the Los Angeles Business Council's Mayoral Housing Summit, Villaraigosa said the city must consider mandatory affordable-housing programs, such as inclusionary zoning, to sustain the middle class and keep jobs in Los Angeles.
"People can't afford to live in the city of Los Angeles," Villaraigosa said. "This is an opportunity for us to figure out a problem that has reached crisis proportions, and I'm prepared to lead that effort."
But the mayor is taking on one of the most politically sensitive issues in Los Angeles - one that combines density and higher construction costs in a way that galvanizes both homeowners and builders.
Inclusionary zoning laws typically require a developer to set aside 10 percent to 20 percent of units as affordable. Or a developer could pay a per-unit fee so affordable housing can be built elsewhere.
In 2004-2005, developers and neighborhood councils banded together to kill an inclusionary zoning proposal by Councilmen Ed Reyes and Eric Garcetti.
Villaraigosa himself spoke in support when the inclusionary zoning law was proposed, but backed away during his campaign for mayor, saying he didn't necessarily endorse
This time, Villaraigosa said, he intends to draft developers, housing advocates and neighborhood council members to help craft an inclusionary zoning law that most people can support.
He wants to appease developers by allowing them to build denser, with fewer parking spaces and fewer bureaucratic delays.
"There are 110 jurisdictions in California, alone, that have (inclusionary zoning ordinances). This shouldn't be that controversial," the mayor said.
But some of the most outspoken critics of the original inclusionary zoning ordinance are skeptical that the mayor can ease concerns.
"I don't think the climate has changed. People will still reject it," said Charlotte Laws, a member of the Greater Valley Glen Council.
She said community members and Supervisor Zev Yaroslavsky are already revolting against the proposed density bonus law, which is a voluntary measure that would let developers build taller or denser if they include affordable units.
"To bring up inclusionary zoning at a time when that's happening is not a good move."
Others questioned why the mayor would choose to introduce a law that could raise the cost of development now, in the midst of a mortgage meltdown and tighter lending standards.
"The economic picture has changed and it's not for the better," said Carol Schatz, president of the Central City Association, a business group.
She said the business and development community could possibly support inclusionary zoning - with the right incentives so builders don't bear the full cost of providing affordable housing.
"That's density and we know what happens when you say the D-word in certain areas of the city," she said. "Are the mayor and council willing to push that issue?"
But Reyes, who has been the leading advocate for inclusionary zoning, said Angelenos have felt the burden of high housing costs and are open to change.
For example, last year developers built more than 14,000 units. Of those, 12,000 were affordable to families earning more than $135,000 a year.
"I believe the middle class has felt such a blow in the rise of gas prices, in the stratospheric level of housing costs, in the quadrupling of college costs. A lot has changed," Reyes said.
Plus, he added, with a new planning director and the promise of more resident involvement, communities might be willing to accept more density in certain locations, such as near transit stops.
Deputy Mayor Helmi Hisserich said the Mayor's Office has had six "listening tour" meetings with developers, housing advocates and community activists to talk about an affordable-housing strategy and inclusionary zoning.
She said once they understand the lack of affordable housing, they are willing to talk about solutions.
"People understand it now because the middle class is abandoning Los Angeles," Hisserich said.
"A lot of it is about educating neighborhood councils and stakeholders about the issues and then having a real conversation about planning and about where we're going to put density."