Thursday, February 28, 2008

LA Weekly - "Density Hawks"

This article in the new LA Weekly, "City Hall's 'Density Hawks' Are Changing L.A.'s DNA", really hit me. We talk about whether people can afford to live here. But this is about whether you would even want to. From its beginning (you should read the whole thing):

With little debate, a trio of new "density enabling" ordinances (a real mouthful, known as the Downtown Ordinance, the Parking Reduction Ordinance and the Senate Bill 1818 Implementation Ordinance) has rolled through Goldberg's Planning Department and ended up in the ornate council chambers on City Hall's second floor. ...

On paper, the three ordinances will let developers bypass the city's fundamental zoning protections — and profoundly alter the livability, look and essence of L.A.

... much taller and fatter residential buildings than zoning law allows, significantly less green space, obliteration of residential parking in some complexes and removal of older, less expensive housing.

35 comments:

Lionel said...

I think all the talk about density is mostly just a big scam. Developers use the ideal of urban density to get projects moving, yet all the talk seems to do is provide a Trojan horse for massive new developments without the infrastructure to support more people and, inevitably, cars. I think this move to density has made life in LA almost unlivable.

Anonymous said...

la is already unlivable

that's why everyone on this board wants to live in santa monica

if you live in sm and work in sm you have a happy civilized life.

any other arrangement it hellish beyond all compare

!

Anonymous said...

the key to happiness is to work very very close to your office and never be stuck in traffic

Lionel said...

"la is already unlivable"

I voted with my feet - literally. I moved to Seattle in June and walk everywhere: grad school, coffee shop, park, grocery store. It's surreal.

Anonymous said...

If you don't like it here then leave LA. Then you can stop posting on this blog about how you want to buy a house in the westside when prices hit bottom.

Epsilon said...

Maybe it's because I'm from the east coast, but I don't get why density is bad. If it really gets so bad that the sewer systems can't handle it, that's obviously a problem, but otherwise I think LA needs more high rise buildings.

It would certainly make condos more affordable by vastly increasing the supply...

Epsilon said...

Here is one interesting paragraph in the article, though. I'm not sure how the bulls would explain this:

"The actual growth statistics fly in the face of the luxury-apartment future envisioned by the Villaraigosa administration. The U.S. Census says that between 1990 and 2000, 400,000 more residents fled Los Angeles County than moved in from other states and California counties. And significantly, the people who moved here earn an average of $3,000 less per year than the 400,000 who fled."

Anonymous said...

"Maybe it's because I'm from the east coast, but I don't get why density is bad."

You have no kids, right?

Anonymous said...

what do you think the average commute is of someone who LIVES in santa monica
i think it is much less than the la area average

people in santa monica are closer to their jobs

Anonymous said...

we stil see houses closing in sm at more than three million a pop

can i get a rundown of who it is that is buying these and whether you think they are paying all cash

and if not what their income is

Anonymous said...

on the last thread we had some one who said that building costs for a custom home will go up in the next five years and others that said it will go down

if we are talking about the quality of new construction you get on la mesa, let's say today that costs 400 a square foot all in

what do people think will happen to that price per square foot going forward?

Anonymous said...

"can i get a rundown of who it is that is buying these and whether you think they are paying all cash"

Yes, they're all from Europe and they're paying cash. Buy now or be priced out forever. Feel free to call me at 800-FLEECE-U for some showings before they're all gone forever...

pwnd said...

Please god let this housing bubble pop so all these silly realtors can just go back to selling cell phones.

Anonymous said...

"I think all the talk about density is mostly just a big scam. Developers use the ideal of urban density to get projects moving, yet all the talk seems to do is provide a Trojan horse for massive new developments without the infrastructure to support more people and, inevitably, cars. I think this move to density has made life in LA almost unlivable."

"la is already unlivable"

"If you don't like it here then leave LA. Then you can stop posting on this blog about how you want to buy a house in the westside when prices hit bottom."

"Please god let this housing bubble pop so all these silly realtors can just go back to selling cell phones."

So much anger and hate on this blog! I can't tell if people love LA, hate LA, or just plain hate people in general. I guess all of the above. Is there anyone on this blog who has a friend in real estate? We are also talking about people possibly losing their homes and some many people here are relishing the thought. I really don't think that is ethical or kind.

Lionel said...

"So much anger and hate on this blog!"

I don't see the anger in my comment, except that directed at developers. I 'm certainly not misanthropic. In fact, one of the reasons I moved to Seattle was to be in more direct contact with people. And it's worked. I live in a fantastic neighborhood where my 5-year-old can walk less than block in either direction and be at friends' houses. It's safe, lovely, and feels like a real neighborhood.

As to LA, it's upsetting that a once livable city has become so difficult to navigate. The night it took me an hour and a half to get from the Palisades to UCLA I knew it was time to leave. I don't blame people in general for this. I blame fat-cat developers and the politicians who allowed LA to become such a bloated mess.

pwnd said...

"Is there anyone on this blog who has a friend in real estate? We are also talking about people possibly losing their homes and some many people here are relishing the thought. I really don't think that is ethical or kind."

Nope, I wouldn't associate with grifters who charge 6% for babysitting a piece of property until someone happens to buy it.

Wake up people! These realtors (tm) have no actual skills. Yet selling houses can be one of the most lucrative "careers" in our backward society.

It's no wonder America is falling behind the rest of the world. Instead of getting degrees in engineering, math, science, etc. everyone was getting rich selling and financing houses - it's such a joke. Seriously, why bother with college or learning when a realtor with a GED can make a real professional's entire annual salary by selling one fucking house in Santa Monica.

This is going to end badly; *really* badly for those who are leveraged up to their eyeballs, and have no real education or actual skills.

Anonymous said...

"Nope, I wouldn't associate with grifters who charge 6% for babysitting a piece of property until someone happens to buy it.

Wake up people! These realtors (tm) have no actual skills. Yet selling houses can be one of the most lucrative "careers" in our backward society."

Well Pwnd, I do have friends in real estate and most of them are decent people and extremely intelligent. Some of them are lawyers, bankers, and former business owners. Not many realtors actually make a living in real estate and as you said, many are not educated. However, they will not survive anyway. You have made some fairly egregious remarks and generalizations about that business. If you want to be upset about people in that industry, you should be more upset at the CEOs of the banks and homebuilders who created and duped thousands of home buyers. Get your anger out on them as most realtors hardly sold a thing in the past few years. Remember, just a year ago 1 in every 70 people in this state had a real estate license. If you are fed up with them get your own license and do all the work yourself. You definitely will potentially save thousands of dollars.

Anonymous said...

"I live in a fantastic neighborhood where my 5-year-old can walk less than block in either direction and be at friends' houses. It's safe, lovely, and feels like a real neighborhood."

I take it the chronic depression hasn't set in yet? If you're born and raised in California, you stand almost zero chance of lasting long term in Seattle.

pwnd said...

"We are also talking about people possibly losing their homes and some many people here are relishing the thought. I really don't think that is ethical or kind."

Another thing, no one is "losing their homes." They are being evicted for not pay their rent to the bank. If they *owned* their home, the bank couldn't make them leave. But, a bank owns the house, and therefore the bank is the landlord. Should congress get involved when renters get evicted for not paying rent? They are losing their homes too - right?

If people get foreclosed on it's because they never should have been given a loan in the first place. They will go back to renting - big deal. You don't need to feel sorry for them any more than anybody else who rents; any more than the people who think they own, but really just rent their house from a bank.

Lionel said...

"I take it the chronic depression hasn't set in yet? If you're born and raised in California, you stand almost zero chance of lasting long term in Seattle."

I was depressed in LA, not here. Love it here, absolutely love my life here. Yes, it does rain, but strangely, falling water doesn't seem to affect my moods as much as the mind-numbing traffic, sky-high housing costs, and the persistent and amoral stench the entertainment industry imbues LA with. I have many good friends still in LA, and family I'm tight with, but I don't see myself ever moving back. Seriously, I went from feeling like I was always behind, always striving for something decent, when, with a simple move of a thousand miles, life suddenly felt good. As difficult as the move was, particularly in regards to friends and family, it was one of the easiest things I've ever done. I don't want to torch LA, I have many great memories of the place; I just wish I'd left sooner.

Anonymous said...

Lionel,

I am right there with you! People like pwnd make this place stink! People have their name on the title pwnd. Yes, they actually do own the house, just not outright. They have merely borrowed money to pay it back in the hope they will pay it off one day so they do not have to rent the rest of their life. I am sure many will be fine, but when banks create loans they thought were manageable and they are shocked to learn their payments are much higher it creates a crisis for many. I don't know what makes you think this is no big deal? Sure, there are people who borrow and just walk away from a house thinking it is no big deal and they deserve what they get, but most are not like that.

pwnd said...

"I am right there with you! People like pwnd make this place stink! People have their name on the title pwnd. Yes, they actually do own the house, just not outright. They have merely borrowed money to pay it back in the hope they will pay it off one day so they do not have to rent the rest of their life. I am sure many will be fine, but when banks create loans they thought were manageable and they are shocked to learn their payments are much higher it creates a crisis for many. I don't know what makes you think this is no big deal? Sure, there are people who borrow and just walk away from a house thinking it is no big deal and they deserve what they get, but most are not like that."

Hey idiot, if they owned even part of the house, they would be able to sell it for more than they owe. The problem is they don't own *any* part of it, not "outright"; not at all. Therefore, they have no choice but to get foreclosed on, putting the house back to a bank as a REO.

Do you really think most people who took an interest only, neg am., no-doc ARM planned to "pay it off one day"? They took that mortgage because it was the only way they could afford the monthly payment, which was an artificially low teaser rate. Masses of financially unsophisticated debtors embraced these toxic loans because everyone was getting "rich" off home equity. As long as home values increased it worked. These people were greedy, plain and simple, and now the it's time to pay the piper - finally.

Perhaps if these "homeowners" weren't so focused on consumerism and keeping up with their peers they wouldn't be in the mess they created. You make it seem as if renting is such a horrible, unbearable condition. In my opinion, it's better to live within your means than being a slave to debt.

As far as me making this place "stink". In case you didn't notice, you are in a housing bubble blog. If you don't like people telling the truth my advice is you take your Pollyanna attitude elsewhere.

Anonymous said...

Hey idiot, if they owned even part of the house, they would be able to sell it for more than they owe. "The problem is they don't own *any* part of it, not "outright"; not at all. Therefore, they have no choice but to get foreclosed on, putting the house back to a bank as a REO.

Do you really think most people who took an interest only, neg am., no-doc ARM planned to "pay it off one day"? "

Wow, I'm the idiot? You really don't know what you are talking about, do you? So the only way to own a piece of property is to not owe anything on it? If that was the way this country functioned no one would own anything, or could show they own anything. How do LBOs occur? How does the government borrow against itself? You make no sense whatsoever. Just because they owe more than it is worth does not mean they don't own it. That is a contradiction! What you are suggesting is that title means nothing and that these people who "intentionally" took these loans are just duping the lenders and squatting on these properties. Here are a few article links that might set things straight for a person of such insightful cynicism:
1. http://globaleconomicanalysis.blogspot.com/2007/11/wamu-collapses-under-appraisal-probe.html
2. http://www.post-gazette.com/pg/08036/854804-28.stm
3. http://www.businessweek.com/magazine/content/07_33/b4046601.htm

You really think people took these loans out on purpose knowing there was no way to pay them back? I don't know what planet you live on? How many banks and homebuilders are getting sued right now? Most Buyers bought homes without understanding the ramifications of the loans they took. Most people are not nearly as educated about the lending process as you may think they are and the job of the mortgage broker or lender is suppose to explain that process to them. If someone is trying to get a loan with the intention of never paying it back it is called fraud and if found out they would more than likely go to jail. Here is a link to help explain how federal prosecutors would come after someone who tries to defraud a lender:
http://www.federalcrimes.com/mortgagefraud.htm
There is no doubt that it is occurring, but most Buyers did not understand the type of loan they got because it was explained to them incorrectly by a guy who had been in the industry maybe a few months and was trying to make a money of unsuspecting buyers.
I know what kind of a blog this is, but that does not mean you can have a reasonable discussion about these topics. It does not give you an inherent right to act like a jerk.

Anonymous said...

"Do you really think most people who took an interest only, neg am., no-doc ARM planned to "pay it off one day"? They took that mortgage because it was the only way they could afford the monthly payment, which was an artificially low teaser rate. Masses of financially unsophisticated debtors embraced these toxic loans because everyone was getting "rich" off home equity. As long as home values increased it worked. These people were greedy, plain and simple, and now the it's time to pay the piper - finally."

Oh really? Hmm, the L.A. Times and the 278 civil suits being filed disagree with you.

http://www.latimes.com/business/la-fi-litigation3mar03,0,1221135.story?track=ntothtml

Anonymous said...

I'm an infill residential developer in LA County. So take my comment for what it's worth. There is no stopping the densification of Los Angeles County. It is a product of baby-making and preservation of the economy. If people quit increasing the population when we can all live on spacious plots of land with green all around us. If you want LA's economy to stop growing and have high unemployment, then density can also be curbed. This is just a natural progression of the metropolis. Those who value space and separation from their neighbors have two options:

1) make a ton of money and buy your space.
2) leave town for less populated areas

You can't stop it. The pressure is on and it's relentless. The pressure has more money than you and the welfare of LA economy needs it. I'm sorry, but that's just how it is. You have to ignore it, embrace it, or leave. You won't stop it for long. Maybe you can slow it. That's all. Sorry about the density.

Anonymous said...

Most people are too specialized in their own careers to really stop and learn what the true economics of their loans are as they relate to the broader economy. Hell, most people can't even understand a thing about what the guy in the next department over in their company does even though they have been there for a decade. It's no wonder that people outsource everything because we have been neutered by specialization and the renaissance types are few and far between. once you take responsibility for your life and start to learn other trades and skills you become less likely to be taken by things like an obviously retirement threatening home loan. We are too specialized.

Lionel said...

Very interesting points, infill developer. I won't disagree with your points. However, it is worth considering that, according to recent US census tracking for CA, residents leaving CA tended to be much more highly educated than those arriving. While these stats were for CA in general and not LA, if they do apply to LA, I can't see how that could be a positive trend for the economy.

Anonymous said...

Lionel,

I'm as anti-growth as you can get as a developer. It pains me to see rural areas get gobbled up for seas of 7,000sf lots, which is why I made the move to redevelopment. However, to answer your question the best I can- all i can say is that it's not the educated, white-collared types who are driving the stats. It's all about asses in seats plugging away at some enterprise, contributing to an economic behemoth that is the LA Metro area. I'm not saying that it's good policy, sustainable, or sexy, but it's what keeps the meter fed. Wealth always seems to escape the hands of the poorer people and floats up to those more privileged. Our middle class in LA is getting pummeled. Growth, however, doesn't necessarily need to be in terms of higher-paying jobs for more educated people. I've started on a rant and now I can't even remember what I was saying...

I guess it's sad to see so many nice places sacrificed for housing, but I have a hard time feeling really bad about creating housing opportunities for people who wouldn't have a shot in hell if the density were lower. My advice would be to take refuge in the places that don't embrace growth. There are a lot of them out there.

Anonymous said...

By the way, Lionel...

Seattle is urbanizing at a pace much faster than that we have seen in Los Angeles. Look at all the Vulcan projects, the industrial areas around downtown, Belltown, Capitol Hill, Queen Ann, Fremont. You have massive momentum gobbling up everything in those spots and your traffic is getting horrible. I go up there about five times a year and have noticed the increase in traffic. Even look at West Seattle along that seaside drive - tons of density. I love Seattle, but it's not the best example. Housing there is very expensive. A friend of mine just bought a Finney Ridge condo for something like $600k and it is about as nice as what you would get in Newport Beach for that price. Perhaps a little more affordable than the west side, but not by much.

Lionel said...

Interesting stuff, infill developer. (No irony, by the way)

You're right about Seattle in one regard, in that property has become very expensive to own. (Traffic has not been a big deal for me as I walk everywhere.) However, I'm renting a beautiful 3-bedroom craftsman within walking distance of the U (where I'm a grad student) in a beautiful neighborhood (Ravenna) for under 1700/month. The reasonable rent has meant that my family and I have been able to live a very nice life, near parks, the U, shopping, while I've been in school. This wouldn't have been remotely possible in LA. Ravenna compares very favorably to Santa Monica IMHO. I don't think I'd find a tricked out craftsman for 1700. A great move for us, but obviously it wouldn't be for everyone.

And... Seattle's a little late to the bubble party, so prices are peaking right about now. Not a great move by your friend to buy a condo. Phinney's a terrific neighborhood, but condos are going up everywhere here. I have a buddy up here who's in CRE and very gungho RE in general, and even he is very bearish on condos. By summer, I think he or she will be regretting that move.

Anonymous said...

I agree with everything posted above

Perhaps we need a thread on this board suggesting alternatives to Santa Monica -

places where you can get SOME (not all) of what we all love about Santa Monica for much much less money

I will start off with a few suggestions, i know i will be flamed by the people that say SM is the greatest, but the goal here is not to replace SM but to offer alternatives for people that can't afford SM (even if SM comes down in price 40% from here, which it may or may not do)

I guess what i am saying is that if a person can't afford SM even if SM falls 40% from here it may be worth talking about other places

Anonymous said...

Alternatives to Santa Monica? That's hard. If you eliminate the obvious westside destinations then with what are you left? I moved here from Manhattan Beach and I have to say that I prefer it here. MB has some nice elements, but the people are painful. SM residents are no cup of tea. I'm sick of hearing the I don't go east of: Lincoln, Centinela, 405, etc argument. It's so pathetic. There is a lot of attitude around here. You know where it seems there is less attitude and greater affordability? SFV, SGV, places like Westchester, El Segundo, Playa, Mar Vista. I would love to live in San Marino when I have kids. That place is all about the children. It's hot and smoggy at times, but I hail from AZ, so I think I can hang. What are my dream alternatives? A place with a large body of water,or even a stream or lake, tall trees, distant neighbors, wildlife...a place where I can get away, smoke dope and make love.

Anonymous said...

I suggest Brisbane, Australia. You are near the Pacific Coast with its beaches while a twisty river runs through the city among hills festooned with late 19th Century and early 20th Century bungalows, many with lovely views. Public transit is on regular-running catamarans (the City Cat). There are two excellent public art museums, a compact and dense commercial core immediately next to a fine large botanical park. There are several universities and the Queensland marijuana is well-known. Produce and other foodstuffs originate from sufficiently nearby to assure freshness inspiring even in this life-long Californian. Total population of the metro area is about 2 million so there's the necessary critical mass for culture and between walking, the City Cat and the bus system you can do without learning how to drive a car on the wrong side of the road. Winters are at least as mild as Los Angeles winters but summers are admittedly more like Atlanta's. Hence all those old houses have lovely shaded verandahs and cross-ventilation. There's your alternative to Santa Monica.

Anonymous said...

That's a great idea, but it's nearly impossible to get a work visa.

Anonymous said...

"That's a great idea, but it's nearly impossible to get a work visa."

Isn't there a way to get in based on one's net worth?