A Tale of Two Universes: Real Estate Speculation in LA

PLATKIN ON PLANNING-Based on a debate I participated in over the Neighborhood Integrity Ordinance, it is clearer to me than ever before that Angelenos live in two parallel universes when it comes to their take of the frenzied waves of real estate speculation now rolling over the city. 


Real Estate Speculation run Wild: In the universe that so many LA residents live in and that gave rise to the Neighborhood Integrity Initiative, small fry real estate hustlers, as well as major tycoons, rule the roost. City Hall gives their projects full support at every step. In this LA shoddily built McMansions, boxy apartment buildings, and Small Lot Subdivisions easily obtain building permits through worthless ordinances and lax code enforcement, while initially illegal automobile-centric high-rise luxury buildings manage to pop up like mushrooms. The best known are 69 such projects in the pipeline for Hollywood, even though similar, over-sized projects can be spotted in many other LA neighborhoods, almost always generating major opposition. 

The list of complaints about these luxury projects is long. They are not allowed by the City’s General Plan and zoning code. Their self-justification for special legislative treatment is an imminent population boom based on chronically inflated population numbers. When completed, they spew out pollution, foster traffic congestion, drive up housing prices, displace local residents, and destroy neighborhood character. Finally, it is political influence that allows these behemoths to be built on parcels where public infrastructure and services are already so stretched that they cannot meet the needs of local residents, much less those of high maintenance newcomers. 

In this universe LA stopped being a boomtown in the early 1990s. Nevertheless, high stakes real estate speculators still flock to LA because they believe that expensive real estate investments here are still less risky than keeping their fortunes in troubled economies, such as China, Brazil, and Middle East monarchies. 

City Hall loves these risky speculators for all the wrong reasons, most obviously their willingness to kick in money for pay-to-play schemes that result in City Council approvals for their projects. In the words of this week’s Los Angeles Times,  “ . . . projects are often considered on a case-by-case basis, with Council members dictating what's appropriate on particular sites based on the desires of developers, many of whom are influential campaign donors.” 

Is it any wonder then that the Department of City Planning, City Planning Commission, and City Council ultimately handle each mega-project in nearly the same way? They are all “Approved, with Conditions.” We also know that these projects’ Environmental Impact Reports (EIR) consistently reveal unmitigatable environmental impacts, especially Green House Gases. In assembly-line fashion, however, the City Council reflexively glosses over these disturbing EIR findings with unanimous votes to adopt cookie-cutter Statements of Overriding Consideration. Poof. The damaging revelations are banished forever. 

Benign Business-as-Usual: I encountered the universe parallel to the one I just described at the debate I mentioned over the proposed Neighborhood Integrity Ordinance. The other panelists, both well spoken, listed the many benefits of business-as-usual city planning in Los Angeles to make their case against the Initiative. Lo and behold, though, they had the very same talking points as Steve Afriat, the well-compensated chief lobbyist for the high-rise luxurious Palladium project that the City Council approved in its entirety on Tuesday. 

In this universe, Palladium-type real estate investments are the tide that lifts all ships. They are a powerful economic stimulus for Los Angeles that ripples out to the entire city. They also meet LA’s mounting need for jobs and housing, while attracting young, trend-setting apartment and condo tenants wildly enthusiastic about transit. 

According to this universe’s advocates of business-as-usual city planning, these mega-projects are all warranted. They welcome them to Los Angeles because the city is still on the verge of a population boom for which more housing must be built now to meet the needs of future residents. Furthermore, City Hall gives these discretionary projects a detailed review and resulting approval because they promote transit ridership and contribute vital units to the desperately short housing market in Los Angeles. These approvals certainly do not involve pay-to-play at City Hall, but are considered on their merits after the City Planning Department’s staff, the appointed members of the City Planning Commission, and then the elected members of the City Council carefully weigh their merits and environmental impacts before voting to adopt zone changes and General Plan Amendments. 

Apparently these projects also do not wipe out affordable housing because they are constructed over empty parking lots. Furthermore, the luxury units in these buildings actually benefit the rest of the non-luxury housing market because they filter down to become affordable housing. 

As for allegations of insufficient public services and public infrastructure, there is nothing to worry about because the projects are reviewed in detail, often through an Environmental Impact Report.  And, as for LA’s regretful record of not updating and monitoring the elements of its legally required General Plan, in this parallel universe, the barrier is the City’s budget, not City Hall’s penchant for approving (with conditions!) nearly all parcel-level applications for relief from the General Plan and the zoning code. 

Some might call this “lipstick on a pig,” but by the time these glib discussants were finished, part of the audience undoubtedly thought that LA’s business-as-usual planning process was really the envy of the entire country.  

What next? While none of us, even pricey consultants and devoted surrogates for real estate speculators, can accurately divine the future, my crystal ball catalogs no shortage of calamities facing Los Angeles if it continues to substitute pay-to-play for careful planning and monitoring.   

LA will still have the worst air and traffic congestion in this country. Economic inequality, already extreme, would become more even pronounced as the City’s elected officials bestow billions of dollars in unearned wealth on real estate speculators through zone changes, General Plan Amendments, and citywide land use programs, such as re:code LA and zoning ordinances attached to Community Plan Updates. As for the certain disasters already headed our way, especially accelerating climate change and major earthquakes, the small failures of public infrastructure that regularly appear in Los Angeles because of poor planning, monitoring, and maintenance will destructively reveal themselves within minutes, not over years and decades. Hundreds, maybe even thousands, will meet preventable deaths. 

This grim future I glimpsed inside my crystal ball is not, however, a certainty. LA’s voters finally have a vehicle to head it off, the revamped Neighborhood Integrity Initiative, as well as an organization to keep its reforms on track, the Coalition to Preserve LA. 


(Dick Platkin is a former LA City Planner who reports on local planning issues for CityWatch. He welcomes comments and corrections at [email protected].) Prepped for CityWatch by Linda Abrams.