Leimert Park in South LA is considered one of the centers of Black life in Southern California. It has also been the target of gentrification for years, bringing with it all the usual misgivings among residents who are watching the character of their neighborhood change as Black residents are priced out:
There are a lots of fears....Fears that once new residents move in, they’ll act like gentrifiers and start calling the police on longtime Black residents. “We are diverse. We welcome everyone into our neighborhood. But we hope, just as when they move into Chinatown, or Japantown, that they recognize this town is based on African American culture,” Fields said. “I don’t want to go for a run outside my house and have somebody chasing me down thinking I’m causing trouble.”
But another fear is about what will happen now that California has passed a law that allows developers to build duplexes and 4-plexes on property that was once zoned for single-family homes:
“If we destroy the single-family neighborhood by allowing developers to come in and tear down the single family homes and put up triplexes and duplexes and quadplexes that we can’t afford to buy, we’ve lost,” Fields told me.
I don't get this. If a single-family home near Leimert Park is going for $1.5 million, then a single unit of a 4-plex would go for—what? Maybe $500,000? That's more affordable. If anything, it seems like the best bet the Black community has for remaining a strong presence in the face of gentrification that otherwise has little chance of being stopped.
Am I missing something here?
It's actually much less attractive than that for developers. The law requires the owner to sign an affadavit saying they'll live in on of the units for 3 years.
Seriously? It's hard to imagine a more bizarrely unjustified provision.
As of a few months ago, I heard people arguing this was all a big giveaway to developers. You'd be amazed what a potent argument that is, especially with California liberals.
I imagine that provision -- 3 years residence that is -- was necessary to fight off that argument.
You are vastly underestimating the final cost of the fourplex units.
And even if you are correct, it still requires a 10 or 20 percent down payment.
50 or 100 thousand dollars cash on hand.
That is a lot.
But still cheaper than a single family house, which some affluent would probably purchase as a knockdown before building a McMansion.
No you're not missing anything. Allowing a higher supply of housing to meet demand will lower the cost of housing so that people can better afford it. Constricting supply to only single family homes over the course of decades has made CA housing unaffordable by limiting that supply. It may be true that some of the newer duplexes/triplexes seem pricey at first but I'd place a bigger hope that building more of them over time for supply decreases housing costs than building SFH McMansions in the long run.
right: new development does not deal with affordability directly, more, denser housing changes the entire market to increase supply and reduce prices on the existing housing stock, even if those new quad-plexes are expensive. It is a long term solution. Those who focus on "building affordable housing" are missing the point. The person complaining wants no new housing development whatsoever.
Let's not confuse 'lowering' the cost of housing with 'slowing down the rate at which it increases'.
More supply may do the latter - there is no chance in hell it does the former. Private developers have no incentive to build at a price point *below* current market value - and that is what is required to actually LOWER the cost.
Now, as Kevin notes, they CAN change the mix of available housing. But that's not really addressing affordability. Houses and apartments/condos/duplexes are distinct products appealing to different consumers.
Building four $500k units instead of a single $1.5m unit on a lot actually makes stand-alone housing *more* expensive by incenting developers to tear a bunch of it down
Market value is determined by supply and demand. Tearing down one house to build multiple increases supply because multiple is more than single.
Your argument that they condos are distinct markets is nonsense. There's plenty of crossover between them, such that they can be considered a single supply, and that's why they are considered one.
That must be why New York City has the lowest cost housing in the nation.
The current price point as affected by building costs will come down if developers build with that in mind - its how markets work. But the problem is the land - price of land per occupant can only come down if there are more people per acre.
The best that I can think of is the problem is new versus old. If developers tear down an existing single family home to build a more profitable quad-plex with all the newest building amenities, a middle class black family may have been priced out. But that would be even more true if developers build a fancy new single family home.
So the complaint could be that making development more cost-effective could result in pricing out certain families. But at that point you are railing against change full stop. And I suspect that is what is going on. That is true for the other complaint against quad-plexes: that they may be more attractive for couples and singles as opposed to middle aged full-sized families. Affordability complaints are just dishonest misdirections employed by people who want NO CHANGE. You see the same thing in white neighborhoods trying to keep out "undesirables" as well.
I think you're somewhat underestimating what the rent actually charged will be (hint: only slightly less than the entire single-family unit for each unit), at least in the short-to-medium term. (Yes, in the longer term this will definitely bring rents down, but that will take time.) Landlords, particularly ones that just put a bunch of capital into a project, are not patient about getting paid back.
But also you're underestimating the degree to which this community flat-out assumes that you're talking lies in bad faith, because that's how almost everyone in power has talked to them for their entire lifetimes. They fully expect that, despite any laws to the contrary, if landlords can profit by tearing down the house they've lived in for 40 years they absolutely will kick everyone out onto the streets. If the law ever catches up, they will have made enough profit by then to cover the fine. The former tenants? Screw 'em, they're just poor blacks.
If you want them to actually believe you have their best interests at heart, you need to overcome their entire lifetime of people just like you who really, really don't.
Landlords typically want to be paid back quickly because their units are all gloss and no boss. This happened recently in my old hometown, Columbia, MO (Hmmm Actually, ten years ago. My God, time passes so quickly these days!)
TL;DR: If city inspections and building codes meant anything, realtors would have more patience. But they don't, so they don't.
I have to admit that I struggle with the concept of "gentrification". For decades we've railed against white people with "misgivings among residents who are watching the character of their neighborhood change". Now with minorities we're encouraging that very behavior.
Sorry guys, but no one gets to claim a neighborhood for generations. Cities are always changing. And I've had to move a couple times in my life when the landlord raised the rent. That's life.
Your life is so terrible
I think the fear is more conservatively oriented whites buying the multifamily structures then renting more commonly to other whites, & the occasional Asian or Hispanic, by jacking up rents.
500K is hardly affordable in the real world
And a year is a long time, amirite? IOW, depends on your age, or so I suspect. Five-hundred-thousand dollars (_never_ start a sentence with a number) isn't a lot of money. Really, it's not, though it may seem so to those who once bought trade paperbacks for $0.35, back in the day, textbooks for $35.
I can attest that a half million dollars is a lot of money.
What you are missing is Fields et al, like many, wanting single family homes at quadplex prices.
I assume Irvine is not all that different from the SF Bay Area. If you take a close look at your property tax assessment you will find the land is roughly 80% of the assessment and the structure itself 20%. Which minimizes the degree to which price can come down.
If California really wants affordable housing it needs to find a way not simply to increase supply, but reduce demand. Or make more California somehow…
If California really wants affordable housing it needs to find a way not simply to increase supply, but reduce demand.
There's no reason in theory why California couldn't build its way out of its affordability crisis. If what you mean is politically it'll never be possible to make the policy changes that allow this, you may be right.
(Also, exiting the "affordability crisis" doesn't necessarily mean —and in California's case probably doesn't mean — an absolute real term reduction in prices. It just means bringing them more into line with incomes, ie, over the next 20 years prices go up "only" 15% in real terms as opposed to the 40% they'll go up if nothing's done).
Tokyo's experience over the last three decades is "exhibit A" as to what can be achieved with a robust "shall issue" legal framework with respect to building permits.
If population growth does not stop, building will have to continue and that is not sustainable. And California has a slight problem with another natural resource besides land. Fresh water.
If population growth does not stop, building will have to continue and that is not sustainable.
Building will have to continue for the foreseeable future. Quite right. You're proposing to end housing construction in California? Good luck with that.
in the long run it's highly likely nearly every place on earth is going to be challenged by declining population numbers (because the human population itself is going to be contracting by the end of this century). In a desirable, rich place like California, it's likely to take longer than that. So, who knows when and how big "peak California" is. Maybe the year 2114 at 63 million?
Perhaps 2095 at 57 million? Or 2203 and 79 million? I have no idea and neither do you.
Until we create a new source of fresh water, we have a pretty good idea what the peak population in California is.
Population density in California is higher than Spain or Greece (although nowhere near as high as Israel), so it's no longer an undeveloped frontier.
And, by how much has Tokyo’s population grown in those thirty years?
How much has LA's populartion gone up since 1990? Fifteen percent? Similar number for San Francisco?
Since you piqued my curiosity, I looked it up. Tokyo has gone from 12 to 14 million since 1990. LA County has gone from 9 to 10 million in the same time span. So, Tokho has been dealing with substantial population growth (though, given the robust "shall issue" legal standard, I have no reason to believe the city's construction sector couldn't have brought even more housing on line if the need had been there).
Average annual rainfall in Japan is 1600 mm/year. In California, 560mm/y.
The point you are missing that with more buildings the price of the land can be split among a larger set of people. Costs per inhabitant are lower because of higher density.
And higher density, while perhaps inevitable, isn’t “California.” Ultimately perhaps Manhattan West.
Indeed. This is my go-to article on the subject It's also one of the very, vey few times I'll give a tip 'o the hat to Tyler Cowan.
On a related note, legislation in 2017 spurred growth in ADUs across the state, and it's been very popular in Los Angeles.
https://www.buildinganadu.com/adu-blog/california-adu-charts
In our LA neighborhood of single-family homes, we see them being built quite a lot. If you're buying a home and a mortgage of $3000 or $3500 a month is a stretch (understandably), it helps to have a rental that could provide an extra $1000 or $1500 in monthly income. ADUs make steep home prices much more affordable.
We're thinking about adding an ADU. Maybe we'll rent it in future years, but meanwhile it could provide some much-needed square-footage.
You're not missing anything, but your numbers are off.
First, acquisition and redevelopment costs of a $1.5M home to turn it into a 4-plex would result in units closer to $1M each than $500K each... Maybe as low as 750K if the structure can be adapted rather than demolished and rebuilt. But keep in mind that even if that's the case, the most expensive parts of the home will need to be built 3x more in the 3 new units: kitchens and bathrooms. If it can't be adapted, you're talking about an addition at minimum for the plumbed stuff.
Also, that person isn't really wrong about duplexes/triplexes/quadplexes that they also can't afford - but it's also not going to lead to the destruction of SFH neighborhoods. It's not a mandate. It just allows for it to happen, under certain conditions (e.g., owner-occupant of 1 of the units).
The reason for the high cost also isn't just the cost of doing that business. It's that we've underbuilt housing by so much that all that gets built is top-end housing, and that's going to include these additional units in previously-SFH spots, so they're going to be uber expensive as well.
Welcome to America.
The reason for the high cost also isn't just the cost of doing that business. It's that we've underbuilt housing by so much that all that gets built is top-end housing
The solution to that is to overwhelm the "underbuilding" with new supply: a tsunami of building permits. California's new law won't do that. But it is a (small) step in the right direction. A much more robust approach would simply be to set building/density code at the state level (perhaps based on such objective criteria as, say, population density of zip codes) and combine that with a air-tight "shall issue" legal standard with respect to building permits. In other words simply abolish the NIMBY veto.
Absolutely. Building on wetlands around the SF bay will solve all our problems.
Exactly right. The time's long past when the myth of 'Americans just want bigger houses' is put to bed. With a pillow over the face, hopefully.
There's a long sad tragic history of black families being push out of neighborhoods by design going back to the end of reconstruction, at the extremes, the Tulsa race riot and Wilmington, NC but also eminent domain to build Central Park in NYC, a lot of the Interstate Highway System and "Urban Renewal" projects like demolishing a middle class black neighborhood in SW Washington, DC for Brutalist blocks of apartments and office buildings that never really were fully used until another phase of renewal to fix mistakes made in the late 1960s-70s - but now it's wealthy folks taking over.
Then in Chicago you had toxic rent to own schemes and Realtors making a killing by scaring whites into fleeing from the city to the 'burbs.
So I get when black residents say they don't trust plans made. Why should they?
They shouldn't, and that's a problem. Vote for the Democrat, always, always, always.
Unless the Green Party candidate has a chance of winning. Or unless the Democrat has no chance of losing and there's a Green Party candidate on the ballot.
Great point. I read that column in the LA Times and felt it was very lacking in nutrition. Sure, radical change in a neighborhood is bad for some people, but what about the elderly Black people in the neighborhood who would like to sell at a high price to have resources for their retirement or maybe to send grandchildren to college etc? I'm not saying that makes it all A-OK, but there are two sides to gentrification, and one of them is much higher prices for the people who are selling.
That said, given the history of abuse of minorities by the financial industry in this country, it makes sense to me that their ought to be some fairly serious guard rails on how banks arrange sales and loans to people who are selling and/or adding units on their property. I'm not sure how that should work, but a requirement that the seller have a lawyer who is not being paid by the buyer is a place to start.
but a requirement that the seller have a lawyer who is not being paid by the buyer is a place to start.
This should probably be required in all real estate transaction, everywhere.
Four thumbs up!!
The problem with the elderly, or anyone, selling their house so they have a nest egg to use is....they then have to find a place to live. Downsizing after the kids have moved out make sense if they can find an affordable place to live and the family has a place to gather.
Paul Krugman, in a recent blog post, states that CA is more than just a NIMBY state, it’s a BANANA state: Build Absolutely Nothing Anywhere Near Anybody! I don’t know who coined the BANANA acronym, but I first encountered it in that blog.
And I feel that it’s more or less appropriate. Coming to CA from a different part of the country, the widespread and influential BANANA perspective has often taken me by surprise. I sometimes fail to show sufficient fervor in opposition to any and all building projects, and that seems to create suspicion among the initiated that I may not be a sufficiently radicalized member of their tribe.
There's a positive feedback loop going on in California, too. The more expensive housing becomes, the more of a typical person's wealth is tied up in real estate. And so the more financial incentive they have to fight tooth and nail to prevent anything that might detract from the value of their primary asset.
There's just not as much money at stake in the exurbs of Tulsa.
Bullseye! That's a very astute insight and a huge part of what's going on.
It's a twofer. Knocking down the single-family homes denigrates the character of the neighborhood and still leaves the new units well outside of the average person's price range. 500,000 isn't remotely doable for most people.
Knocking down the single-family homes = denigrates the character of the neighborhood.
I do not see a connection between the two that can simply be assumed. And the idea that once a certain (type of) neighborhood is built it must be set in stone forever, and that change from that point on will “denigrate” it, strikes me, in fact, as an assertion in need of quite a bit more support.
I live in Jefferson Park, which is next to Leimert Park. I'm providing what I believe is an accurate representation of the prevailing view from the street. Much of the neighborhoods around here are zoned as historic districts because of the plenitude of old and interesting Craftsman homes. It's one of the features of the area. I agree with KD that the new law may help slightly. It's probably better than nothing. But I don't see it significantly stemming the tide of gentrification.
A lot of historical district overlay zones tend to be designed specifically to maintain class wealth in the neighborhood, keeping lower affordable housing out.
Knocking down the single-family homes denigrates the character of the neighborhood...
By "denigrates" do you mean "changes?"
Most "Black" neighborhoods got that way because they, too, changed (typically from white working class enclaves).
No, I mean denigrates. Please see my comment above for more context.
Well, ultimately the decision on what kinds of structures can't be demolished is a subjective one, and one that, needless to say, can be used to impede the production of shelter. We can preserve large swaths of our cities in amber. Or we can address the affordability crisis. Pick one.
A possible compromise might be to designate a certain percentage of historically-significant buildings as protected, and compensate those owners who, as a result, cannot maximize their profits. But obviously the devil's in the details. If we set that number at a level (call it 20%) that allows for significant densification, we can still accommodate a lot of new housing. If we set it at a far higher number (say, 80%) not much is going to get done. Also, it is likely that fears of "everything being town down" to accommodate apartment towers in any event are overblown. The Craftsman houses you mention are highly desirable, and there is zero doubt many affluent buyers are attracted to them as residences for themselves; such persons, in other words, have little desire to tear them down.
I read your comment and I still object to "denigrate". Few California houses (apart from the rare historical ones) are beautiful enough to make anybody nostalgic when they are knocked down.
I very much disagree, but that's neither here nor there. I was trying to provide an interpretation of the quotes that seemed to mystify Kevin and show that they were not necessarily inconsistent, as he seemed to be suggesting.
You're subbing personal perceptions for logic. Not a good way to make an argument.
Am I missing something here?
Yes. You're missing the intersection of NIMBYism and economic illiteracy. It makes for some very bad takes.
Three arguments against gentrification:
(1) Higher property taxes. Even if there are caps, we all know the rates can go up faster than mandated. Long-term owners with fixed or low income will be forced out from their failure to pay their property taxes.
(2) Lower rental rates pushed out. As redevelopment occurs, lower-rent units will be eliminated, replaced with higher rent units.
(3) Character of neighborhood changes cause resentment. The area around USC used to be predominantly Japanese in the mid-century period. In the 60s and 70s it transitioned to predominantly Black. Now, it's predominantly expensive. With each change came resentment out of encounters between different cultures and the expectations with those cultures.
If I were in charge of policy, I would have gone a slightly different way. Instead of eliminating SFR zones, I would have supplemented ADUs by preventing AHJs from increasing property taxes beyond the value of the ADU, slash development and permit costs, and blocked off-street parking requirements for ADUs.
Yay! Plenty of places to live, but nowhere to park your car, and no plan for a transportation system that doesn't involve a car!
BTW, you do realize that the elimination of SFR zones is a boon for private equity, right? The pace of their purchases will pick up now that they know they can turn houses into multiplex rentals.
"You're subbing personal perceptions for logic. Not a good way to make an argument."
I wasn't trying to make an argument, but maybe I wasn't clear enough. I was attempting to provide some context based on my knowledge of the area. I live here. I am all for building and development, but some of the comments here suggesting that people don't care about the character of their neighborhoods, or that California homes are unworthy of preservation are just widely missing the mark. There's an acutely remembered history here of eminent domain being invoked to plow through people's homes for "other people's progress." It's a lot more complex than several of the posters are making it out to be.
You seem to have problems with English. No, that's not what people were 'suggesting'. But you go full tilt boogey with what the voices in your head are saying anyway.
Jesus Christ, man. "Few California houses (apart from the rare historical ones) are beautiful enough to make anybody nostalgic when they are knocked down." Yeah, voices in my head.
And that's not what you said now, is it? Nor should you condescend to other people for supposedly -- I use that word deliberately -- 'not getting' local history, etc. They do. They just fail, oddly enough, to appreciate your special snowflakeness. This happens slow-rover cycle happens all the time in Chicago, BTW, and for much the same reasons it needs to happen in (certain) parts of California. Did you even bother to read the article I linked to? I'm guessing the answer to that one would be 'no'.
I think you've confused me with someone else since I have no idea what you're talking about. I hope that's the case. In any event, good-bye.
You're kind of being a moron today, Scent.
It seems to me the arguments here are incoherent because no-one is willing to talk truth. The issue is not economics, it is culture. But white people don't want to say they want to live in a culture of people who think and live like them (norms regarding noise, litter, smells, yard/curb/frontage care) etc.
And their champions don't want to admit that the existing inhabitants (maybe non-whites, maybe eg drag queens, whatever) have exactly the same concerns about wanting to live in a place that meets their expectations for social space and norms.
No-one is willing to admit that Schelling's housing model describes the way reality actually works -- because people live not just in a dwelling but in the neighborhood of that dwelling, and have different, incompatible, desires as to how that public space of the neighborhood comports itself.
Throw in further incoherence (people who simultaneously want to say that no-one deserves to inherit wealth from their parents, but then want to say that they should be able to inherit a neighborhood character from their parents; claims that all cultures are equally good alongside mocking how uniquely terrible is the culture of suburbs or gentrified neighborhoods) and you have a class 5 level of dishonesty.
And so we get this silly and dishonest argument that pretends gentrification is all about money (and then heads off into wild fantasies when it turns out the costs don't behave anything like what is claimed).
Hear! Hear!
There's a lot of talk about rezoning to allow duplexes, but it never seems to amount to much. These aren't changes that developers are pushing for. If they were expected to provide profits to developers, it would have happened ages ago.
Are there places where zoning changed in the last 10 years and then a sizeabale number of duplexes and fourplexes were built? And what were the prices like? Perhaps a few people will add an accessory unit for a family member, so that profitability isnt a factor in the decision. But the only money makers in new construction are the large 5 over 1 apartment buildings and really expensive single family homes.
And $500,00? That seems far too low.