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THE VIEW FROM HERE - Wall Street is fretting that office workers are refusing to return to long commutes in order to work in some hermitically sealed office time so that their commute starts at daylight and they get home after night fall. Titans of Wall Street like JPMorgan Chase Jamie Dimon, who believe there is magic in their reciting the Pharaoh’s phrase, “So let it be written, so let it be done,” tried to enforce their edict, only discover that workers replied, “No way man.”
“The share of people in the office full time dropped from 49 per cent in the first quarter of 2023 to 42 per cent in the second quarter.” Aug 20, 2023, Spiked, The death of the great American city. Yes, another 7% drop in one quarter after the mucky-mucks tried to order their peons back to the office. The office towers are ½ full and yet, they continue to build more. Why? They made their construction plans years ago based on Lies and Myths. Los Angeles under Eric Garcetti was not the only mega-city that believed its own hype. Even after Judge Goodman had ruled that Los Angeles intentionally used fatally flawed data in its city planning, Wall Street believed in own BS. In 2025, $1.5 Trillion in mortgages payments are coming due in the nation’s most crowded downtowns. 50% capacity portends bankruptcies. Lowering rents for the bosses will not attract workers, since they hate the commutes and now they have alternatives. Wall Street financed this fiasco, but it lives in deep denial.
Realities Which The Woke-Developer Alliance Ignore
As Citywatch predicted years ago, the more they build density, the more people leave. Hollywood is Exhibit 1. In 1990, Hollywood had 214,000 ppl, in 2000, it had 210,800 pp, in 2010, population was only 198,228. During the litigation on Garcetti’s Hollywood Community Plan’s promotion of densification, SaveHywd and HELP pointed out that the twenty year downward trend would continue and the City had to study a Downsizing Down Zoning Alternative. The response of the rich and powerful was to disbar the SaveHywd’s and HELP’s attorney for his factual position that building more high rises and Infils into a glut was horrible city planning. To the Developers’s shock, not allowing facts to be presented in court, did not stop the downward population spiral. By 2015, the population was down to 195,709, and after the pandemic in 2021, Hollywood had only 190,417 ppl. (2021 City LA of Dept Planning Hollywood Demographic Profile)
The 1%’s Unshakable Faith in the Power of Lies
They all proclaim that city cores will come roaring back after the pandemic, but wishing it does not make it so. Their delusion is dead wrong. Covid-19 merely allowed people to do what they wanted to do for years. Offices were closed, on-line Zoom meetings were everywhere. Office workers, who were staying at home, discovered how great that was. Why waste hours on the freeway, when one can walk to the back bedroom (now “the office”) and go to work. One could appear in court wearing no pants – people only saw each other from the waist up. Then, one could go in the backyard with the lap top and write a summary of the hearing and email the entire firm. It was a lie that Working at Home was caused by the pandemic; it merely resulted in people discovering how abused they had been all these prior decades.
Many bosses realized that they could cut costs by reducing their rental space when employees were at home. There was a wholesale non-renewal of office leases. Nonetheless, Wall Street continued to finance more high rises and more density, only to discover a basic economic reality: after a certain point, density increases prices and reduces the population. (As with most things, the relation between prices and density is complex). That’s why SaveHywd and HELP said the city had to plan for Hollywood with fewer people and more amenities, such a parks and woonerfs, less traffic, and rehab of existing housing with more HPOZs and very low cost loans to upgrade homes, but with no more density. Hollywood needed a moratorium on destruction of single family homes plus an ordinance that a new apartment complex which tore down a prior building could have no more than 1/3 the density of whatever was destroyed. Housing prices would immediately drop as developers would cease buying. Only families would be buying homes and housing prices would reflect Living Value and not the inflated Developer Value. Since rents follow housing prices, rents would also fall.
The Larger Trend
Across the nation and much of the industrialized world, the educated population is escaping to the county. While those who can work at home may be the first to settle near a farming community, all the other trades will follow. They will need carpenters, plumbing, electricians, restaurants, flower shops, etc. Their new technological life will demand more living space because people will be home much more than when their lives were committed to commuting. People who move to PennYan, NY or Austin, Texas, can afford a 3 bedroom home, large yard in a safe neighborhood for what it would cost to rent an apartment in LA. Ownership builds equity; rent gets you endless rent increases.
In Los Angeles, Distance is Measured in Time
DTLA is farther from the Valley during rush hour than at 12:00 midnight. With robo-cars, distance can almost disappear. With a functional robo-car, as opposed to our current defective prototypes, the nature of much of travel changes. While in the car, one can write a report, watch TV, sleep, etc. The inside of a car will be reconfigured for a new lifestyle. Also, at night robo-cars can run errands, e.g., the grocery store, the pharmacy, dry cleansers. In some versions, the refrigerator will automatically buy food such a milk, and send the robo-car at 3:00 a.m., to Ralph’s and bring the food back and place the items in cabinet with the right temperature control.
The Disaster Facing Wokers and Developers
The world has changed and they’ve lost control. Their plan for eternal densification with everyone living in tiny apartments and funneling all the money to Wall Street is disappearing. No matter how many apartments the Woker-Developer Alliance builds in Los Angeles, they cannot force people to stay in LA.
(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]. The opinions expressed are those of the author and not those of CityWatchLA.com.)
