Granny Flats: How Corrupt Pols, Two-Bit Developers Destroy LA’s Middle-Class Neighborhoods

LOS ANGELES

CORRUPTION WATCH-Los Angeles, the nation’s greatest city, is being poisoned by an amalgam of corrupt politicos, Wall Street, and a corrupt judiciary. 

Starting at the end of the 1800's, millions of people came to Los Angeles for one reason – wonderful homes in the sun. Those days are coming to an end. This cadre of actual Deplorables is murdering the ability of middle-class families to own those homes in the sun. 

The final blow comes with the comforting name of “Granny Flats.” The real purpose of Granny Flats is to destroy home ownership in Los Angeles by decimating single family neighborhoods. Los Angeles’ home ownership rate has already fallen to the lowest in the nation. 

Here Is How Granny Flats Bring More Destruction 

A Granny Flat is a rental house which is constructed in the backyard of a single-family home. There will be no way to stop the building of these second homes. The immediate result will a significant jump in the cost of all detached homes. No home will be priced according to its Living Space value for a family, but rather at its value as two potential rental properties. 

When a home goes up for sale, any two-bit developer can buy the home for 150% of its Living Space value knowing that he will be able to construct a second house on the R-1 lot and then rent out both houses. This act of turning all residential neighborhoods into commercial rental properties will devastate Los Angeles’s economy.  

Here’s How the Destruction Will Happen 

Until now, the escalation of housing costs in Los Angeles has been somewhat indirect. The judicially sanctioned criminal vote trading system at LA City Council has allowed developers to purchase whatever properties they desire and construct whatever they wish just by being nice to one councilman and the mayor. As a result, developers have been able to buy up multiple homes, demolish them and then construct apartments. Each sale of a single-family home to a developer at above Living Space market rate places upward pressure on nearby single-family homes. Each sale price becomes part of the “comparables” that Realtors use to set listing prices. These “comps” treat an R-1 home bought for Living Space no differently than an R-1 home bought for apartments. If a family wants a detached home, it must pay the Development Value. 

Large developers have focused on constructing large complexes in Transit Oriented Districts. As a result, the criminal voting system which has allowed for the improvident construction of the current glut of apartments has had only an indirect impact on homes ensconced deeply within R-1 neighborhoods. After a few blocks, the influence of comparable prices wanes. 

Granny Flats, however, bring Developer Value into the very heart of every single detached home enclave. There will be no piece of residential property where a developer cannot pay 150% or 200% of the Living Space Value for a detached home and then build another house in the backyard, allowing both houses to become rental units with absentee landlords. 

The huge number of people who can get into the Granny Flat market will devastate Los Angeles beyond anything previously seem. The mega developers want towering high rises near subways.  Their projects require hundreds of millions of dollars, like the Millennium Earthquake Towers in Hollywood. Granny Flats, however, allow small-fry developers on the flipper level to buy single-family homes in the heart of detached home neighborhoods. In fact, Granny Flats make the better middle-class neighborhoods a prime target because that is where the rental value will be the greatest. 

Within a few years, entire neighborhoods will tip from owner-occupied detached homes to dense rental communities. Long before this reality is obvious to even the mentally dullest among us, employers will foresee the terrible financial impact Granny Flats will have on their business costs. 

Don’t deceive yourself into believing that these renters will be upwardly mobile families concerned with good schools and stable neighborhoods. The County already has a proposal to subsidize small developers who will rent these units to formerly homeless people without any screening for prior criminal records, drug abuse, mental illness or even convictions for sex crimes. 

The War on the Single-Family Home Drives Out the Productive Class 

One major goal of Family Millennials is to build equity in their detached homes that have yards, fruit trees, and space for their children and dogs. In fact, studies have shown that even unmarried Millennials want homes with yards for their dogs. When homes are priced by Development Value rather than by Living Space value, employers know that the cost-of-living for employees to stay in Los Angeles places them at a competitive disadvantage compared to businesses in parts of the country with lower housing costs. 

Already, the judicially approved criminal vote trading at LA City Council has caused an exodus of Family Millennials due to the escalation of housing costs. Los Angeles is hanging on to Family Millennials by one thread, i.e. the willingness of Family Millennials to devote 40% to 50% of their income to their detached homes. The Granny Flats will push the Development Value of detached homes so high that middle-class Family Millennials will simply not be able to compete. They cannot devote 80% to 100% of their take home income to a mortgage. Nor, will they be willing to become renters and build zero equity. 

So long as Los Angeles is governed by a tiny cadre of corrupt politicos, developers and a corrupt judiciary, the exodus of our productive middle-class Family Millennials will accelerate. Simply put, it takes either a criminal or a fool to think that Los Angeles can withstand the destruction of its middle-class neighborhoods.

 

(Richard Lee Abrams is a Los Angeles attorney and a CityWatch contributor. He can be reached at: Rickleeabrams@Gmail.com. Abrams views are his own and do not necessarily reflect the views of CityWatch.) Edited for CityWatch by Linda Abrams.

-cw

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