THE VIEW FROM HERE - Sound economic planning needs stability. Hence, families need a stable housing market. Zoning provides that stability. The neighborhood where I grew up in the 1940's - 1960's Upstate New York was exclusively R-1 from the day the first house was constructed in 1910 and it is still exclusively R-1. The house in Los Angeles, where I now live, was built in an R-1 area over 100 years ago in 1916 and has remained R-1 . . . until now.
California’s SB 9, SB 10 and L.A.’s 99 Poverty Projects Are Killing the Single-Family Neighborhood
SB 9 allows four houses on each R-1 lot; SB 10 allows 10-unit apartments on any R-1 lot close to a Transit Line; 99 Poverty Projects refers to the city’s allowing 99 units on R-1 lots if 50 of them are affordable units.
After the developers devastated rent-controlled units and brought the Homeless Crisis upon us all, they reached a dead-end with their large complexes, except as money laundering vehicles. Their plan to destroy RSO units went fine during the destruction years when they made tens of thousands of Angelenos homeless so that LA was having five homeless deaths per day. That didn’t matter since human beings are as disposable as last week’s garbage. February 27, 2023, L.A.’s Homeless, The Waste Product of Density. The developers and politicos did not foresee how their trashing the lives of tens of thousands of people could harm developer profits. Because density construction enhances the power of trade union bosses, the Wokers join the developers in disparaging people in single family homes as racists. In our new Woke society, once one is labeled a “racist,” they have no rights.
Although corruption such as spot zoning and allowing mega corporations like Blackstone to corner much of the housing market was known, young Millennials, who were still living the dorm lifestyle, could double and triple up with roommates or live with their parents. Their parents were pleased with their home’s escalating values without realizing that while the parents and grandparents were getting richer, their children were being closed out of the Los Angeles house buying market.
When the Millennials decided to start a family, their priorities changed, and they needed a stable single family area. Unless they had family financial backing, buying a home in Los Angeles was not possible. Although they may have tried renting, that arrangement was not satisfactory after the first child. Thus, the exodus of the Family Millennials began. Since the young Millennials had been renting the over-priced new apartments and the generation following them, Gen Z'ers, was both smaller and poorer, the vacated apartments stayed empty. By 2013, the newer apartments already had a 12% vacancy rate. With homeless tents crowding people off sidewalks and the criminally insane roaming the streets outside the new luxury projects, the new fancy apartments were not so chic.
As a result when all Millennials had become Family Millennials (ca. 2020), the state of California and the city of Los Angeles enacted laws which made it foolish for family Millennials to buy into a single family area. The developers had discovered that buying R-1 homes and tearing them down was cheaper than buying RSO complexes. Also, the developers figured that R-1 areas have less crime, and hence, they could rent their apartments more easily if they were in Los Feliz than in South LA. But R-1 zoning impeded the developers’ invasion of R-1 areas.
Another Example of the Folly of Supply Side Economics
The fact that developers want to build ADUs, duplexes, fourplexes and 99-unit poverty projects in single family areas does not mean that family Millennials want to live in those places. One constant over the centuries is the American dream of a detached home with a yard for a dog and kids to play. The dream is not to rent a tiny ADU in the corner of someone else’s back yard. Nor, do they want a cramped fourplex on 1,750 sq foot plot. Thus, the idea that family Millennials want to live in ADU’s, SB 9 or SB 10 units is another supply side delusion.
But Wait, it Gets Worse
A home is both a place for the family and the best way to accumulate wealth. The family home tends to be a retired couple’s major asset. One cannot gain equity renting – 100% of rent leaves their pockets never to return. When renters reach retirement, they face rent increases. Retired homeowners live rent free as their mortgages are paid off; their equity is a huge financial cushion.
Buying a R-1 Home Has Become a Form of Russian Roulette
Even if today’s family Millennials have the entire down payment, it would folly to buy into any LA neighborhood. Since R-1 zoning has been abolished, there is no way to stop the house next door from becoming a 99-unit Section 8 housing.
Look at any street north of Franklin Avenue in Hollywood - Los Feliz. If the city declares that the property is near a TOD, there can be a 99-unit poverty project at the corner of Franklin and Oxford. It need have no off-street parking. Initially, the homeowners who sell out to developers will make a fortune, but as the neighborhood deteriorates, even the developers will avoid it. Slumification is not a novel concept – just one which people have forgotten while zoning was protecting detached homes.
If some family Millennials do get the down payment, why invest it in an area where the housing market may crash within 10 years? Millennials need to recognize that by buying into the vastly overpriced housing market, they are making gigantic gifts to Wall Street via exorbitant mortgages. After SB 9, SB 10, etc. all residential markets are unstable markets. Any day a developer may buy one or two lots and ruin the neighborhood’s family character.
SB 9, SB 10, and the 99 Poverty Unit Complexes make it economically unwise for a family Millennials to move into even established neighborhoods like Cheviot Hills, Hancock Park, or Windsor Square. The greater threat of SB 9 and SB 10 is that they are state wide. No area in California with detached single-family homes is safe. Buying anywhere has become a crap shoot where the homeowner is the constant loser and Wall Street is the perennial winner.
(Richard Lee Abrams has been an attorney, a Realtor and community relations consultant as well as a CityWatch contributor. You may email him at [email protected]. The opinions expressed by Mr. Abrams are not necessarily those of CityWatchLA.com.)