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THE VIEW FROM HERE -
Short Answer: No!
Why Won’t Los Angeles Get Any Better?
Short Answer: Wall Street is making too much easy money by sucking the wealth out of Los Angeles
What Is Wall Street Doing That Is So Bad?
Wall Street is behind the ever-increasing density of Los Angeles which drives up housing prices which require property owners to carry extra high mortgages. As Wall Street sucks out hundreds of billions of dollars in inflated mortgage payments that money leaves Los Angeles, reducing Angelenos’ consumable income to buy goods and services.
According to the Multiplier Effect, each dollar spent results in a society generating 2 or 3 more dollars. If Joe buys a new refrigerator, the store makes money and it pays its employees who then spend their income on other things like lessons for their children. The dance teacher makes money which she spends on a variety of things. If one’s mortgage is $500,000 too high as densification has pushed up the prices of houses without increasing their actual value, then Joe may wait 2 or 3 or 5 years before replacing his refrigerator. A house north of Franklin Avenue can be as much as $500,000.00 to $1.1 Millions Dollar over the real fair market value, but Wall Street’s years of densification and other frauds have artificially inflated housing prices.
Wait, It Gets Worse
The more mortgage money Wall Street takes out of LA, the more businesses have to charge for their goods and services. Suppose Home Depot is selling 100 refrigerators per week, but magically Joe’s and his neighbors’ mortgage payments dropped by $300 per month so that they can afford to buy new refrigerators today. Then Home Depot may sell 110 refrigerators per week, so that its profit goes up by 10% and it can lower prices by 1% to 2%. That price drop will bring in a few more customers so that Home Deport makes more money and consumers have slightly lower prices. The, Home deport will order more refrigerators than usual. General Electric, etc. will make more money because sales have increased and they can hire more employees who then have more disposable income.
When there has been a reverse Multiplier Effect, the more wealth Wall Street sucks put of LA, the greater drag it is on the economy and each store has to keep its prices high or even raise them. If Home Depot can sell only 80 refrigerators per week, it may have to raise the price in order to generate enough income to pay its employees, re-paving the parking lot, pay the electric bill, etc.
Lower Prices vs. Higher Income Affect Cost of Living
The cost of living is the ratio between the cost of goods and disposable income. When people keep their money in Los Angeles, they spent it here and make the society wealthier, which usually leads to lower prices. Having to pay small mortgages is like getting a raise, leaving Angelenos more money to pay for less expensive goods. When mortgages are lower, then landlords can charge less rent. However, since 2001 Angelenos have been paying constantly higher and higher mortgages as densification has increased prices without increasing actual value.
A family making $85,000 per year in Los Angeles is much poorer than a family with a $85,000 annual income in Houston, Texas. For a Los Angeles family to have the same purchasing power as a Houston family, it needs a family income which is 33% higher, i.e., $113,050 annual income. Think of a higher cost of living this way: A family pays an additional 33% of its income just to live in Los Angeles. California income tax is about 4% to 5%. California’s income tax is clearly too small to be pushing Family Millennials out of Los Angeles. $11,275-7500 = $3,775
But Wait Some More, it Gets Still Worse
Anyone who bought a home in Los Angeles in the last 15 to 20 years is also paying a needlessly high annual property tax. Why? Wall Street has fraudulently increased the prices of homes so that newer owners pay excessive property taxes. In 2025, the average cost of an LA home is $1,100,000 which means today’s buyer will pay $11,275.00 in property taxes per year on a home which should have sold for $550,000 with only $3,775 annual tax. The higher the property taxes the more income for the city so that it has no motive to stop the corruption. (These illustrative figures are approximations based on averages.)
None of the Charter Reform Proposals Address this Issue
The city is committed to more densification and the AB 79 is forcing greater densification in residential areas. AB 79 is designed to destroy detached R-1 homes with yards which will reduce the supply of R-1 homes which Family Millennials desire. Each time a developer pays the higher developer value for a home, all the comparables for nearby homes increase.
Poor People as Well as Middle Class People Wants Detached Homes
While the rent for an apartment in a Poverty Project will be less than buying a home, poor people still want the American dream. That is why lower middle class is a major segment moving away from LA. If they stay in LA, they will never be able to buy a home, but if they move to the Exurbs outside of Denver or Nashville, their rent and other costs of living will be so low, that they will be able to save up for down payments. People know that being a renter forever means never accumulating equity and generational wealth. When a renter reaches 65, he looks forward to more rent increases, but a homeowner has a huge pile of money and no rent or mortgage payments.
Does any Charter reform proposal reduce density and housing costs?
Answer. No!
(Richard Lee Abrams is a former Los Angeles-based attorney, an author, and political commentator. A long-time contributor to CityWatchLA, he is known for his incisive critiques of City Hall and judicial corruption, as well as his analysis of political and constitutional issues. Abrams blends legal insight with historical and philosophical depth to challenge conventional narratives. A passionate defender of civic integrity and transparency, he aims to expose misuse of power and advocate for systemic reform in local government. You may email him at [email protected])
