California governor Gavin Newsom will use a new law to try and expedite a $2bn mixed-use development with low-income housing near Skid Row in downtown Los Angeles.

The 3ha “Fourth & Central” scheme would create 1,500 homes and 38,000 sq m of office space, plus shops, restaurants and a 68-room hotel. At least 214 units will be set aside as low-income housing.

The site is now occupied by cold storage facilities and parking lots near the boundary between Skid Row and the Arts District.

Skid Row got its nickname in the Great Depression and still has a high concentration of homeless people.

Developed by Denver-based Continuum Partners, the scheme has 10 buildings, including a 44-storey residential tower at Central Avenue and 4th Street.

The project was masterplanned by Studio One Eleven and the main tower was designed by UK firm Adjaye Associates.

Newsom said on Thursday that the scheme would be eligible for judicial streamlining under the California Environmental Quality Act. It would be the third project to benefit from the act, and the first housing project.

The law seeks to bypass lengthy environmental review challenges for projects that use clean energy and provide green housing.

“For decades, we’ve let red tape stand in the way of these kinds of critical housing projects and the consequences are in plain view all around us,” he said.

“Now we’re using California’s infrastructure law to build more housing, faster.”

The project requires approval from the Los Angeles City Council. Construction is expected to begin next year and take between five and seven years.