Fri, Sep

Quit, While the Quitting is Good!


THE VIEW FROM HERE - In Fight Extremism. Regain Your Power By Quitting on June 26, 2023 , the reasons for all non-extremists in both the GOP and the Dem parties to quit their respective party were set forth.  This article discusses who should quit Los Angeles and why.

The groups which should seriously consider moving out of Los Angeles as soon as possible are the Millennials (born 1981-1996), the Gen Zers (born 1997-2010).  The next people who should weigh their options are renters who can gather together the financial resources to buy even a modest home outside of Los Angeles.  In fact, moving to another state and paying low rent there could be a two step process to owning one’s home.

Basic Reason To Quit Los Angeles

The surest way to accumulate wealth for retirement and for the next generation is through real estate. For the vast majority of families, that means owning their own home.  There is a financial pyramid, and the base should be whole life insurance and owning a home.  Like real estate, whole life insurance builds equity. Term life is similar to renting. When the term is over, you’ve got nothing. But I’ve digressed.

Since a family has to live somewhere, there are three options: (1) own a home, (2) rent - usually an apartment, (3) be homeless.  If you are just out of school, homelessness can be a viable option. It will take 150 years to save up for the down payment.  Unless you’re a Getty heir, forget about saving up for a mortgage while paying rent.  Also, paying Los Angeles’ absurdly high rent prices gobbles up the money your future family will need to relocate.

Prepare Yourself Psychologically

The following articles should help Millennials and Gen Zers cut through the Woker-Developer propaganda which is shoved at them 24/7/365. 

May 29, 2023, CityWatch, Los Angeles: Once America’s Dream, Now America’s Nightmare

May 25, 2023, CityWatch, LA's Housing Shortage Myth Exposed

May, 19, 2023, The Marin Post, Voice of the Community, Power Players’ Problematic Playbook For Housing

June 18, 2023, Newgeography,  Housing Report: Blame Ourselves, Not Our Stars, by Joel Kotkin and Wendell Cox   The Housing Report itself is a pdf near the end.  That is vital to read.

September 21, 2017, CityWatch, What if Angelenos Stopped Paying the Wall Street Tax? 

The disaster which is befalling Los Angeles was well under way over six years ago. In fact, Judge Goodman alluded to it in his January 2014 opinion rejecting the Hollywood Community Plan where SaveHywd and HELP had shown that Hollywood had been losing population since 1990 and that if the densification mania continued, the entire city would lose population.  The population loss in the city of Los Angeles leading up to the 2020 Census was so great that the State of California lost one Congressional seat.

Chart of Median Cost of Detached Home in Los Angeles

2000   $221,340

2010   $328,140

2017   $577,690

2019   $641,340

2021   $826,500

Houses in 2021 were not substantially better than those in 2000 since they were overwhelmingly the same homes. Adjusted for inflation the 2000 cost of $221,340 would be $376,168 in 2021 dollars.  Thus, the real price increase was $826,500 less $376,168 = $450,332 That’s the gap which a mortgage must increase to get nothing more.  That’s median LA price. 

Post pandemic, Los Angeles housing prices may fall because so many Millennials, Gen Zers and foreign immigrants have fled. However, price will still be exorbitantly high and the detrimental impacts of densification will not disappear just because the younger middle class moves away.  The corruption juggernaut shows no signs of slowing down.

Employers Have Been Leaving Los Angeles for Decades

Employers know that the only source their employees have to obtain money to pay horrendously high rents and mortgages is to them, their bosses.  Thus, high housing costs have forced employers to leave Los Angeles, and they have no intention of returning. Not only have the employers established roots elsewhere, but their employees are tied to the good schools, the nice large homes and with yards and low traffic.  Los Angeles housing prices would have to drop between 50% and 75% to be competitive with exurbs in other states.

A Drop in Housing Prices Will Be Worse than their Rise

If property values do drop, everyone will demand a re-appraisal and property tax revenues will crash. How will the city repay the billions of dollars in loans it took from Wall Street to pay developers up to $1M per affordable apartment?  Then, take a gander at the hundreds of billions squandered on rapid mass transit. Those loans have to be repaid by Metro. Guess which city is the largest city in the Metro system?  While the one bright star for Los Angeles is the new superintendent at LAUSD, Alberto Carvalho, he’s probably 20 to 30 years too late.  Similarly, 1930 was too late to seal the bulkheads in the Titanic.  Even before the income from real estate property taxes crashes, the school district will have lost so many students due to the Millennials and Gen Zer families’ departing that the district will be bankrupct.  The state will have to drastically increase its per pupil payments, but where will the state get the funds? LA will be unable to pay its police and fire departments or fix the roads (well that’s one thing which will stay the same.)  The destroyed older single family homes will not magically spring back to life. The miles of vacant apartments will be the prelude to LA’s South Bronx phase.  

The problem with becoming obscenely obese is that one cannot abruptly stop eating. One has to cut back slowly.  Is anyone so naive as to think that the idiots, charlatans, and crooks who have driven Los Angeles into this disaster will abruptly stop their criminal behavior in time to save LA? They can’t, because it’s already too late. Los Angeles is over stuffed to the gills with excess mixed-use housing.  And here’s the kicker – if LA stopped the excessive construction, LA’s economy would crash like a narco-drug state which closes down all its meth labs and tears up its poppy fields.

When Should Families Quit Los Angeles?

Yesterday would have been good. Even we altercockers are beginning to worry that maybe we aren’t old enough to die before the disaster strikes.  

(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])


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