Downtown Gentrification and Its Discontents
The flood of investment into the Downtown Los Angeles market is slowly producing a world class, 24 hour city. Already a sports and cultural powerhouse with the Staples Center and Walt Disney Concert Hall (above), the influx of new loft dwellers is finally drawing essentials like a Ralphs supermarket slated to open later this year.
The Walsh Team is at the forefront of the area's explosive growth with two new downtown listings: 1) Artist's Lofts at 900 E 1st St, an industrial adaptive reuse with wood floors, exposed brick, and killer views of the downtown skyline (currently under contract); and 2) The Oviatt SRO Apartments at 1315 S Flower in the heart of the exciting developments in downtown's South Park district. It's flanked by the Convention Center and a Blue Line Metro stop and contiguous with Legacy Partners beautiful new 100-unit luxury building City Lights on Fig. You'll see from the photographs that the owners have adopted a similar paint job to blend their 1911 brick building in with the 2003 wood frame and stucco. The Oviatt has been dramatically renovated with a new lobby and leasing office, fresh carpet, mailboxes, and new windows on the sides facing Pico and Flower, but still has lots upside with more improvements. There's also vacant retail spaces on the bottom floor, valuable assets for a retail-lean market that's adding so many new households.
Five years ago, it would have been unthinkable to renovate these older single room occupancy hotels with shared baths and tiny rooms, but the market forces are unstoppable. That doesn't mean everyone's happy about the trend. SRO buildings in other parts of downtown like Skid Row have always been the housing choice of last resort for the poor and homeless. According to a recent Los Angeles Business journal article, homeless advocates aren't too happy to see developments like this:
For decades, the Cecil, at 640 S. Main St., was among dozens of run-down single room occupancy hotels on Skid Row that rented rooms without kitchens or private bathrooms for between $150 and $200 per week.Many of the SRO hotels are owned by non-profit groups like Skid Row Housing Trust, which buys small hotels to preserve as affordable housing, but that leaves 4,000 privately owned units near Skid Row, which worries the Trust's executive director Jim Bonar:
But Street Wise Investments LLC, owner of the 634-room Cecil, has made nearly $4 million in improvements since it bought the hotel in 1999....Gone are the advertisements for $150 weekly room rates. In their place are efforts to lure budget domestic travelers and European and Asian backpackers.
With limited affordable housing in the city, gentrification is threatening one of the few options [left for low-income tenants]. "I'm afraid the handwriting is on the wall," he said. "At this point it's only a matter of time."Looks like he's right:
Gilmore & Associates LLC, a pioneer in downtown loft conversions, has purchased a condemned SRO called the El Dorado at 416 S. Spring St., where it plans another market-rate condo project.Limiting development problem either, since the major cause of homelessness is the growing gap between wages and housing costs. And the major cause of skyrocketing housing prices (besides ultra-low interest rates from Greenspan) is lack of supply due to backward land use regulations and NIMBYism. A Heartland Institute Study found the implicit zoning tax on a buildable quarter acre plot of land is $303,178. No wonder it's so expensive to live in LA!
Downtown Los Angeles is one of the last available areas where significant new housing resources can be built. Along with efforts to provide education and health care to those on the margins of society, we need to let the market develop enough new housing that everyone can afford a place to live.
For more about the exciting story of downtown see the LA Downtown News, an excellent resource about downtown development and the Central City Association. For more about homelessness in LA, check out Beyond Shelter and the Los Angeles Homeless Services Authority.
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