Coming Soon: Total Dilapidation

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Today’s LA Times has an interesting feature on the “housing turmoil” (aka the housing bubble) and how the downturn is playing out in the lives of some individuals that make their living in related occupations. In seven short stories they cover some of the ways people are feeling and coping with the pinch. Though the focus is mostly on those involved with the financial side of the issue (one of the commentators shows them no sympathy), they also cover some of the laborers experiencing rough times. A prediction that 200,00 housing related jobs could be lost hints at a very big pop.

Despite the looming housing hangover, the LA City Council just gave real estate developers another shiny gift by changing the zoning laws Downtown to allow for larger and denser developments. Even though politicians have been talking up the potential for new affordable housing, Steve Lopez points out the fact that developers are under no obligation to do so. Best solution for a well planned vision for the city of LA? Cross Your Fingers!

In related news, Downtown developer sued for violating labor laws.

10 Replies to “Coming Soon: Total Dilapidation”

  1. I’m not sure Mr. Lopez is correct in his description of the affordable housing aspects of the new zoning regulations. My understanding was that for developers to take advantage of the new higher density regulations they would be required to provide affordable housing. Where it becomes optional is for developers building according to the older, stricter, zoning rules.

    At least to this layman, that sounds like a good deal for everyone. “You want to build with higher profit margin? Go ahead, but then you gotta help the little guy too.”

  2. From what I can tell from the pdf press release (it’s almost impossible to figure out which ordinance they are referring to) they are merely offering extra incentives of “bonuses” to those developers that want to include “affordable” housing. But most of the other goodies are still available, just not the cash incentive.

  3. There’s so much BS coming from the anti-downtown people on this issue that it’s really starting to stink worse than a skid row alley. So apparently these new zoning rules are a “gift” to greedy developers yet these same greedy money-grubbing developers are not going to be interested in a bonus that allows them to offer 35% more market-rate units (market-rate=$$$$$) in exchange for allocating 15% of the units to affordable housing. In effect, by choosing to set 15% of the units as affordable greedy developers get 20% more market-rate unites. If they don’t choose to do this, they aren’t really that greedy now are they? In fact, they are stupid if they choose not to do it. It’s like saying just because people aren’t forced to give charity that they won’t give charity, even with the tax incentive that charitable constitutions are tax-deductible.

    Furthermore, from the press release:
    Under the leadership of Perry, the ordinance also provides for a no-net-loss of occupied residential units that are at a level of affordability at or below 50% of the Area Median Income. All residential units at this level of affordability will have to be replaced on a one-for-one basis and within the same community planning area from which they were removed. This works in conjunction Perry’s Interim Control Ordinance for Residential Hotel units and helps to protect some of the areas most vulnerable residents while offering an opportunity to update and improve this important housing stock.

    So the woman in the LA Times article worried about her 82-year old mother’s $500/m apartment doesn’t have to worry.

  4. Yeah, lets just sit back and watch all the developers jump at that awesome incentive, what fool would pass it up? Feel free to let us know when the first one takes the bait.

  5. Some of those zoning regulations are badly in need of repeal, for reasons having nothing to do with smart growth or affordable housing. Those setback rules are a throwback to the now-discredited twentieth century notion that suburban standards of building design were universally applicable. The upshot of that setback rule was a whole lot of buildings with useless, sterile “plazas” in front which did nothing to connect pedestrians with the buildings.

    Also, commentators and pundits would do well to give some thought to the idea of “greenspace” before demanding it as though it were self-evidently desirable in all of its forms. Well-designed and well-situated pocket parks are an example of useful greenspace. Strips of lawn surrounding setback highrises are an example of useless greenspace–it’s just landscaping; it may look nice but nobody’s ever going to have a picnic there.

  6. GM see the end of that article EL CHAVO linked. Basically, condos will be converted to apartments, because rents won’t settle down as quickly as condo prices. It also constricts the condo market, to keep those prices high. The rents will be kept high because the demand for some kind of housing persists, and potential buyers now shut out have more cash.

    The rents will eventually flatten out, though. They *should* drop because they’re too high, and will drop as the rental units age and are less competitive with new apartments.

    The most interesting phenomenon will be if the price of houses actually drops. Then, people who recently got into their house, and face seeing the value drop to below their purchase price, will simply stop paying the bank. If they hold out for 3-4 months before being repo’d, they can save around $10,000. At that point, they can move out, knowing that they “got their money’s worth” by living rent-free for a while.

  7. gm: generally, a market like this will drive rental rates up. Supply will tighten because fewer people can buy. Plus, some units that aren’t selling will be converted to rentals at rates high enough to cover the payments.

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