A GLUT of giga-mansions in the hillsides of Los Angeles - WALL STREET JOURNAL, KCRW and BEVERLY HILLS COURIER reports
Wall Street Journal Confirms What We Already Suspect – Too Many Big Boxes
5/31/2019
By Victoria Talbot
An article in the Wall Street Journal (WSJ) this week confirms what residents of West Los Angeles know only too well: that there are too many millionaire’s lairs on the market and not enough millionaires to buy them.
According the WSJ, over 50 more of them are in the pipeline.
The ultra-high-end post MidCentury Modern glass-and-steel construction swept the Westside as the housing market began to recover from the Great Recession. The unrestrained building wrought havoc on the hillsides, where height limitations innovated builders into descent, creating multistory “basements” with multi-million-dollar views of the city, many of them on lots that had been determined to be unbuildable because of the expense, the steep terrain, unstable hillsides, the size of the lot – or all of the above.
In the ensuing boom, none of that mattered. Developers were raking in millions. Everything was on the table. Everything was considered buildable.
The prices they were fetching made it worthwhile to spend whatever it took to build. By 2015, the boom had translated into the war between the developers and the residents. Most of the time, the developers won, and the hillsides became the war zones.
WSJ reports that in Los Angeles on May 30, nearly 100 homes are listed for asking prices over $20 million. It doesn’t say how many of them are spec homes, which is the one component that ekes out all consideration of the neighborhoods and communities that have lived with this phenomenon for the last decade. But properties are languishing on the market longer and reality is forcing the reduction of prices throughout the region.
Ominously, WSJ reports, “The surplus mirrors a similar situation in New York, where high-end developers rushed to build pricey condos amid a market upswing and are now faced with enormous competition for buyers. But unlike New York, smaller, private lenders and wealthy individuals have provided much of the financing for Los Angeles’ spec homes.” The community of residents who actually live on these streets have been subject to incomprehensible discomfort from traffic, street degradation, noise, illegal construction and neighborhoods overrun with construction crews and trucks. Elderly residents have been stalked by realtors who check the records to find homes that have not sold in decades, so they can sell their homes to developers and then sell the redeveloped property to millionaires.
In a state where the housing crisis is so severe, where affordability of the most basic fundamental need for housing is out of reach – the luxury housing glut is a slap in the face to the majority of residents. In Sacramento, to add insult to injury, a bevy of bills with names that make the uninitiated think the politicians are trying to help (like SB 330, “Housing Crisis Act of 2019”) are bills that give developers total freedom to desecrate the state, removing the little hard-won protections that residents and homeowners have won in recent years and undermining local zoning laws. These bills do not advocate for affordable housing, but will enhance opportunities for developers and speculators throughout the state.
Most of California’s residents are totally unaware of these bills and the potential housing impact in their own neighborhoods – especially renters, who will be disproportionately evicted for redevelopment of anticipated luxury units. Meanwhile, developers are turning to increasingly more opulent means of enticing buyers, holding wild parties and partnering with luxury brands to tempt the limited pool of potential buyers with the most audacious offerings. Houses with their own PR firms? Only in West LA.
LINKS:
WALL STREET JOURNAL “L.A. Developers Have a Big Problem: Too Many New Megamansions”
KCRW “Is LA in a giga-mansion glut?”