Gentrification is a tricky concept: not easy to define, but people know it when they see it.
If you ask me, I wouldn’t say Palms is gentrifying. As of 2000, median incomes in Palms were similar to some other neighborhoods you might consider to be under gentrification pressures, like Leimert Park and Highland Park. However, Palms lacks what I’d consider one of the definitive markers of gentrification: a cycle of decades of public and private disinvestment followed by a boom. Palms has always been one of the Westside’s outlets for growth; apartment construction has been robust since the 1950s. In the last 15 years, the pace of development in Palms has slowed, simply because the neighborhood is running out of easily developable sites.
Still, a few recent anecdotal incidents got me thinking about neighborhood changes on the Westside, what that means in Palms, and how it relates to the city as a whole.
First, as part of its Micro Week series, Curbed LA ran a story about a small apartment in Palms, whose renter described the neighborhood as “rapidly gentrifying”. Second, a current resident had recently been looking for a new place in the neighborhood, and found the available apartments at about the same rent to offer a lower level of amenities. (If you live in a rent-stabilized apartment, it’s easy to lose all perception of the current state of the rental market.) Third, while walking down Motor Ave recently, a friend described disliking the new buildings there (Palms Point and M Lofts) for “all they represent”.
Well, what do the new buildings in Palms represent? They’re called luxury, but that’s a slippery term; property managers in Palms call their 1980s podium buildings luxury too. Certainly the M Lofts includes a level of amenities not found in older buildings, but the same could be said of new cars compared to old cars. Anyway, that’s partly a function of needing to secure higher market rents for the market-rate units, as some of the units are reserved affordable units.
A change in our environment is often hard. Perhaps new construction makes people feel like the neighborhood is shifting, away from a place that has the kind of amenities we like, towards a place that has the kind of amenities someone else likes. And it’s possible that the new amenities will appeal to people with more money, who will bid up rents.
This isn’t a plea for sympathy. These anecdotes refer to people who are not without means. People like me certainly don’t deserve any sort of housing subsidy, direct or indirect through regulatory policies.
The important thing to see is how all these housing markets are connected. New construction in wealthy areas of the Westside is prohibited by zoning, so new buildings are only put up in places like Palms. As demand to live on the Westside keeps growing, this development starts to skew towards the high end. Some residents of Palms will move to other neighborhoods, either to find the amenities they like or to keep housing costs down. That, in turn, will start putting upward pressure on rents in those neighborhoods.
We don’t call it gentrification until we get three or four moves down the chain, in places like Boyle Heights. If you want to live in Venice but can’t afford to do so, it’s unlikely you’ll go directly to Highland Park as the alternative. But the connections are real. The process starts with the lack of construction in wealthy areas on the Westside, and that’s where it needs to be attacked.
Let’s say the city suddenly became super-hospitable to multifamily developers on the westside. relaxed FAR and parking minimum. Given land and development costs its hard to imagine say an 1000sf 2br for less than 3-400K even under those circumstances. Am I off base? I personally expect no meaningful policy change, so I think housing costs will become so onerous that jobs migrate away from the coast. Its already happening to some extent in Santa Monica. Jobs are going to Playa Vista and Culver City, ultimately Downtown in the future hopefully.
There’s definitely a price floor for new housing, but not all housing is new. And if there is significant upzoning, it’s likely going to be cheaper to replace SFRs than dingbats with new apartment buildings, which has the nice effect of preserving the dingbats and other more affordable housing stock, though at the expense of more displacement from SFRs. Of course, most SFR residents own their houses, so they get a nice payout when they’re displaced and have plenty of options to move into relatively affordable apartments.
It’s definitely more cost effective to replace SFRs than apartments or retail – less opportunity cost. So we should expect that not allowing redevelopment of SFRs raises that price floor.
Maybe in the past, the government could up-zone a SFR to multi family on the westside, but that time has long past. The SFR zoning is way too valuable for homeowners. And there’s plenty of proof, as we see renovation of SFRs all over the westside. What left for multi family is the industrial and commercial zoning that’s rapidly being rezoned. Take a look at all the new development south of the Marina del Rey Costco, or along the Expo line. And in the most expensive westside neighborhoods, multi family is being torn down and rebuilt slowly. Unless transportation habits can be drastically improved, there is no more room for job growth on the westside, as wages aren’t keeping up with the cost of living.
The reason you see SFR renovations all over the Westside is that that’s all you’re allowed to do! Other things equal, SFR zoning destroys value relative to denser zoning.
Pingback: A Farewell to Palms | Let's Go LA