la times takes ignorant stance on downtown market
“Downtown not the center of it all,” states a headline from a Los Angeles Times article today that tries to make a case that Downtown’s revival is nothing more than over-inflated hype or a passing fad.
“More than one-third of the residential projects approved by city officials have been sidelined… But some real estate analysts believe downtown’s housing troubles run deeper. They say developers and planners miscalculated its appeal as a residential community, leading them to build far too many projects for the demand.”
The majority of the article stands behind weakening condominium sales statistics and quotes from skittish real estate “experts” and other Downtown nay-sayers to illustrate the argument.
Of course, condo sales here are following the trend of a nation-wide slump and economic downturn, a point clearly explained in the article. However, I’d like to point out a huge oversight of the Times piece: For-sale units comprise only a portion of the local residential market. Downtown’s rental sector remains very strong and occupancy rates in those properties are high.
In fact, South Park’s new 717 Olympic apartment tower will hit the market this spring with asking rates in the chart-topping $4.00 per square-foot range, indicating that ebbing property values and a couple ex-Downtown residents who prefer the comforts of suburban life (as featured in the article) are no gauge of Downtown’s long-term viability.
Overall housing demand in the central city remains very strong, and “organic” improvements such as frequent retail openings, pedestrian-focused enhancements and rail transit expansions are producing a liveable and exciting urban core for all Angelenos.
Aside from the numerous new shops, galleries and restaurants that angelenic scrambles to cover on a daily basis, we regularly encounter business owners and visitors who are enamored with the burgeoning Downtown community and aspire to live here.
Why? Because Downtown’s appeal runs much deeper than the highly publicized mega-projects such as LA Live, Grand Avenue and Park Fifth — the extent of most Downtown coverage offered by the Times.
I challenge the author of the article to step outside of his cubicle at 2nd and Spring to visit the vibrant districts of Little Tokyo, Chinatown, Broadway or the Financial District’s 7th Street on a weekend afternoon. The bustling street life that has ignited in these areas over the last year is tremendous — an undeniable achievement more than any real estate market perceptions or irrelevant quotes can undermine.
While I understand the importance of attention-grabbing headlines and the entertainment value of news, ignorance of the facts and a stacked deck of interviewees provide no insight into an issue.
Despite the Los Angeles Times’ global aspirations, it’s unfortunate they can’t open their eyes and see what’s going on in their own backyard.
-Update: Developer South Group’s rebuttal to today’s market woes:
“Silver Lining in Downtown L.A. Downtown”
-Downtown not the center of it all (Los Angeles Times)
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40 comments
Stephen, you made a good point. Thanks to your article, I was able to see how’s the situation in L.A. Our company’s running business for a few years in Canada, and we’ve witnessed some important alteration in demand. One of our branches is speciallized in big private investors. They have been looking into center-located condos, but surprisingly this type of clients is into our city’s downtown. How’s the situation elsewhere?
As a sidenote to the article regarding the condo sales slump in Downtown, it strikes me that like always, the LA Times (and sometimes bloggers) examination of Downtown as a neighborhood or city center talks about the two groups at the two extreme ends of the economic spectrum, those that can afford $600,000 condos and the homeless population living in the streets. For those of us that grew up with Downtown through it’s economic highs and lows, various chapters of urban renewal (both good and bad) and population shifts whether an influx of homeless people or the new “urban loft dwellers” it’s all part of the gestalt of Los Angeles. We are the invisible ones who were here in the 70’s when living in buildings zoned for industry was illegal, and we’re going to be here when and if the influx of “new urban dwellers” tire of Downtown’s “edge” and move to Altadena to have a garage or a Pasadena condo for “stores and theater”. Personally, I don’t think the article got it right and the real estate market here is reflective of a nationwide trend. Buck up Downtowners! Edginess is good.
Didn’t the Downtown News just do an article on the softening rental market?
The Downtown News’ stance was that the rental market may be softening in the future. My research in calling for-lease developments (and my own personal experience during my recent move) has shown another story.
Though we’re seeing some projects go rental, we’re not seeing a huge shift in that direction. Add in Downtown’s increased desirability and current leasing rates versus last year’s leasing rates, and building owners aren’t hurting.
I’m suprised that one of the most famous Newspapers in the Country can’t explain true relevance on the condition of the Downtown L.A. market.
Well said Stephen!
The article also misses the foresight that as a result of various planned projects being sidelined, the growing supply of condos will be curbed thereby increasing the potential value growth of the current inventory of condos. Downtown real estate is a good long-term investment at this point, and not a “flip” market.
On another point, the article uses Paul Park as an example of someone who decided to continue living in Hollywood and set up and office in West Hollywood because the “night life and shopping downtown wasn’t as abundant as he would like.” Well, I used to live in Hollywood and work in West Hollywood prior to moving Downtown. I just wish the article also mentioned that the 5-6 mile commute from Hollywood to West Hollywood on average takes 45 minutes in the mornings, which will only grow longer and more unacceptable to people living in the area. Really cuts into the nightlife and shopping time !
Amen!
The media flames the hype, then the media flames the backlash… makes for good copy … has little relevance to the facts.
No mention of Broadway Revitalization project anywhere. No mention of access to Metro at a time when freeways are busting at the seams.
The idea that people who want to live in suburbs with garages and gardens should be the barometer of Downtown’s desirability is ridiculous. It’s a unique market with a unique appeal.
And a woman walking a baby stroller near “winos” … heavens! What a putz. Typical of the bunker mentality and “out of sight out of mind” thinking that has driven Los Angeles “planning” for too long.
I totally agree with you Stephen.
And you wonder why “old media” (LA Times,newspapers) are down sizing or shutting down. Sure some of it cause of lower circulation and loss of advertising revenue.
But the “new media”- internet- websites and blogs are not just complimenting but now so many times “scooping” and eclipsing the “oldies”.
But a sure and clear example is their coverage and stories such as this one you mentioned.
I mean it is all how you “choose” to look at it. Obviously it was not overall encompassing. I mean they need to look at the “sum of all the parts” sure some are smaller, but still contribute significantly to the overall “big picture” of downtown housing.
But on a better note-
This tuesday the LA Times had a story on koreatown (which in my opinion is also a very imortant part of downtown and los angeles)- “projects breathe life into wilshire corridor” maybe Cara Mia Dimassa should of written the story instead of Peter Y. Hong http://www.latimes.com/news/local/la-me-wilshire11mar11,0,3502197.story
And by the way- The little tokyo lofts suck!—- its all about location, location and location (they aren’t even technically in little tokyo).
I have yet to see a single article produced by the LA Times regarding downtown that isn’t completely imbalanced and negatively skewed. When they discussed Astani’s plans for digital ads on his Concerto project they immediately interviewed all those against and nobody who may like the idea, which I’m sure there are some. All stories regarding downtown real estate and market prospects are doom and gloom and they have Joel Kotkin on speed dial for a quick quote, which alone undermines their credibility as a news source. What a sad state for what was once a decent paper…
The LA Times writer really does bring home some important points - namely that the *promise* of what downtown *could* be is not realized by the *insane* prices of the condos TODAY. I can understand paying that much if Downtown were all that it is supposed to be, but to be the first movers you have to give someone something other than a vague promise on glitzy marketing advertising.
Vibrant communities are built out of people who have all levels of income. After all, who is going to work at the local coffee shop? People making $200K per year? I don’t think so. Downtown has priced itself out of the range of people who have just graduated from high school, and those are the ones who make coffee shops, pizza joints, corner cafes work. Without them, you have nothing a bunch of lawyers in a fortressed building who all commute out of the area to get their coffee.
That’s one thing that always irks me about people arguing that for downtown - they claim that as gas costs rise, the rich people are going to move downtown. First of all, gas costs don’t affect rich people that much. But they DO affect people working for $10 per hour. Those people won’t be commuting as far for work, and per Tim K.’s point above, that means if a high school graduate can’t afford to live in downtown he certainly won’t be working at the Starbucks downtown, much less commuting to it. He’ll stick to his cheaper neighborhood since they won’t pay $30/hour at Starbucks just because it’s downtown.
as always, the LA Times is very negative about Downtown LA, and LA in general. I wrote the editor a little comment. i think everyone should email with their opinions about the LA Times skewed coverage. dont forget to flame kotkin… http://www.latimes.com/services/site/la-contactus,0,1439615.htmlstory
I think the Fred Sands quote is a little irresponsible. He “was seriously considering buying apartment buildings in the downtown warehouse district three years ago. He said he changed his mind after seeing ‘an attractive young woman pushing an infant in a stroller, with winos all around her.’”
First of all, that was three years ago. A lot has changed. All this proves is that Fred is a pussy.
Downtown is in transition. The Naysayers need to calm down a bit. sure this is LA, and competition is fierce (beverly hills, west hollywood, hollywood, mid-city west, west LA, santa monica, venice, cuvler city, silverlake, the burbs like pasadena). Downtown isnt the only game in town, so it will take time for it to find its place.
remember, LA metro is almost the size of the ENTIRE STATE OF FLORIDA. IF only 1% of the population moved downtown, there would be 170,000 people living in a 4 squal mile radius.
Let’s not be alarmists. 130000
I work in Downtown and make 40k a year. I would love to live in Downtown but I am priced the fuck out. I’m really tired of Mac-using, bike-riding transplants telling me I’m horrible for having the gall to drive to work every day. Fin.
Chris, I make half of what you do and am doing just fine living downtown. But it requires simplification and certain sacrifices. I pay a comparable rent to anything else around town.
ps I dont own a car, bike to work in ktown ..and I have a mac (but I hate it!)
i just wanted to add that i dont judge anyone for car-ownership. plenty of people need them for certain jobs/ family situations etc
and this la times article is silly.
What did you expect from the LA Times? I even read where some knucklehead columnits wrote a short blurb mentioning the lack of shopping options in downtown. Check it out on their real estate blog from today under LA Land (http://latimesblogs.latimes.com/laland) and you’ll read a litany of others complaining about how downtown is too ‘edgy.’ I had to laugh at the one nincompoop who complained he couldn’t find anyplace to have a decent lunch in downtown LA. other than Jack in the Crack. Are these people for real? I think i could go to a new place for lunch every day of the year here.
I shouldn’t be surprised, though, I do work with enough cubicle dwellers that seem to be inextricably tethered to their desks during lunch and unwilling to leave the building, sitting in front of their computers picking through their sad leftovers from the night before. They must be the ones writing into the LA Times during their lunch breaks….
> tethered to their desks during lunch
> and unwilling to leave the building,
> sitting in front of their computers
> picking through their sad leftovers
> from the night before.
I bet those also are the same type of people who, after the end of the day, get on the packed freeways of southern California and head over to some frowsy, lousy suburb, to lead their lives of quiet, dull desperation — to a life that’s really no different from the ones found in Kansas, Dallas, Minneapolis, Nashville or Muncie.
The Times has written one of the stupidest, worst researched, and inane articles I have ever seen. So, the condo market has softened. Some people may lose out. So what? The almost 20,000 people who have moved downtown in the past 5 years won’t move out, the buildings that have been built won’t be torn down or emptied out, the renters who have moved in (who make up the majority of the new residents) won’t be affected by this at all.
It’s speculators who drove these prices up and who will suffer by their fall. The rest of us can get back to the business of building our communities. I say it is a good thing, and will help the development of downtown, not hinder it.
I agree with almost all of the above, and my jaw just drops at the stupidity of the writing about Los Angeles in the LAT, when I bother to read it. It seems like they just recycle negative and wholly inaccurate LA stereotypes from the New York media. One thing I just hate when they write about Downtown is the false dichotomy they create, “urban” living Downtown, or the suburbs, as if those are the only two choices we have in Los Angeles. I’m not even going to bother to read this article, because I don’t want to get my blood pressure up. The LAT to me is written by and for Westsiders, or, it often genuinely seems to me, by non-Angelenos altogether, with virtually zero knowledge of the city they’re supposed to be covering. Who they’re writing for, I have no idea.
In every “metropolitain area” the downtown area is the center of attention. Los Angeles was actually the only major city that let their downtown area surmised to ruin. After the northridge earthquakes bulidings where sold next to nothing and they could’nt give/lease nor retail space away…until the artists came. But now downtown LA is almost back to “it’s hey day” and will be so fabuLouss! ==]
when the la times wrote a story about the alexandria hotel a few years back and outed me and my blog, the writer of the article didn’t even interview me. she “lifted” choice passages from my blog and put quotes around them - as if i had been interviewed. damn near everything they’re written about downtown since has the same journalistic integrity.
PS: LA times is notoriously bad for coveraging LA’s urban revival. IF you want to read anything half way decent, pick up a NY times article regarding LA’s urban revival.
Or better yet - just stick to the localized press.
I have 4 words for all of you:
LOS ANGELES DOWNTOWN NEWS
(Since 1972)
If the Times can’t be bothered to cover a story properly that’s happening just around the corner from their own headquarters building, how good do you think they are at covering news stories that happen 3000 miles away, or in some other country?
The Los Angeles Times is a pale shadow of what it once was, and it deserves to go out of business. Sad but true.
The LA Times article is a bunch of hogwash. As someone who has lived in Downtown for the last 15 years, I can tell you that Downtown is in the middle of a upscale revolution. 99% of people who I’ve met living in Downtown LOVE Downtown. The ONLY residents I’ve met that live here that don’t enjoy it are clinically depressed (and may not know it yet or be on their meds) or are women who figured out Downtown is not for young children or parents with small children (not yet anyway). So the ladies complain until they get to move to a small house in the middle of no where.
I get so bored when I’m any other place than Downtown. Downtown is the LARGEST, MOST HISTORIC part of the city and takes people with BIG PERSONALITY to fully enjoy it. I think Downtown’s character may be too much for people who don’t have a sense of self. I mean Johnny Depp lives here. I guess that says it all.
Bottomline is, the story is actually more telling of the condition of the LA Times. Instead of making Downtown Los Angeles look bad, they should turn the pen on it’s own newspaper. Sad but true. No body wants to read their paper anymore. I get sad when we see the structure here in Downtown and think, “it would make a better loft building than office building.” Maybe that’s it. The Newspaper thinks they are the next ones to get axed from the community. Maybe someone has reported they are going to sell the paper and turn their building into lofts. It all makes sense now.
Kind of funny, today the Times has this article: “As downtown revives, so do congregations. A growing, diverse population in the L.A. neighborhood results in new parishes and bigger old ones.”
As I’m working away, someone who I work with is telling someone about downtown. My colleague is a homeowner in Corona. Key comments:
“Nobody wants to live in downtown L.A.”
“There are no ammenties.”
“High crime rate.”
“Just a bunch of studio apartments.”
“It is mostly high-rise office buildings and some residential towers.”
“I don’t know anyone who lives in downtown.”
Sigh. This is the perception of most people in Southern California. The hegeomony of the suburban paradigm is so dominant. Downtown is the boogeyman. Urban living is incomprehensible to most people in Southern California.
There are always going to be those suburban homeowners who will doubt urban living. That’s never going to go away, even with $5 gas and two-hour commutes. Those people don’t matter.
All we need to do is focus on bringing in as many people that want to live here as possible, and bring in the businesses to help support that. If we do that, we’ll be successful as a strong city center.
I don’t mean to be discouraging. The core problem with the L.A. Times article is that it speaks to the suburban mindset as if it is the only viable alternative. I agree that downtown can thrive even if the vast majority of Southern Californias are completely uninterested. There is enough demand for what downtown has to offer.
Rich Alossi — well said.
The following is an official response to the LA Times article titled “Downtown not the center of it all” by Peter Hong, published on March 13, 2008 from the Downtown Real Estate Association members, a group of licensed REALTORS® committed to promoting and fostering the professional ethics and camaraderie of its members in conducting real estate transactions as well as educating and promoting life in the Downtown Los Angeles market.
FOR IMMEDIATE RELEASE
Date: March 17, 2008
To: John Corrigan, Deputy City Editor
Peter Hong, Los Angeles Times Staff Writer
Company: Los Angeles Times
Email: Letters@LATimes.com, John.Corrigan@LATimes.com
For Further Information Contact:
Bill Cooper
President, DREA
849 S Broadway, Loft 810
Los Angeles, CA 90014
213.598.7555
Bill@TheLoftExpertGroup.com
http://www.DowntownRealEstate.LA
Downtown Real Estate Association, a consortium of residential REALTORS® with deep roots in the rebirth of downtown as a residential oasis, wishes to comment on and correct the record in regards to Peter Hong’s piece “Downtown not the center of it all: Downtown fails to lure residents” published March 13, 2008 on the front page of the Los Angeles Times and continued on page A15:
Mr. Hong used information gathered from a company called DataQuick to make a biased statement of the downtown market, but a review of their website and charts containing information on residential sales in Los Angeles failed to list several of the key zip codes for the downtown market including 90014, 90013, 90015, 90017, 90021. We would suggest you refer to area 42 in the Multiple Listing Service (MLS) for Los Angeles, which delineates the “new downtown”. The average asking price for a condo the 1st Qtr ‘07 was $573,366 and the last Qtr ‘07 was $595,819. And since the end of 2006 the prices have softened about 16% as compared to Citywide of about 20% (as reported by the LA Times on March 14, 2008).
Downtown Los Angeles is faring better than the region overall. Yes, the condo resale market has slowed along with the rest of the country; however, new condo development sales have increased making overall sales quite healthy. The total number of condos reported sold in the MLS for Downtown in the first quarter 2006 was 27, for the first quarter 2007 it was 75, and for the first quarter 2008 to date it is 19. Add to that the number of contracts written for new condo sales not reported in the MLS for this quarter and we are well above 2007’s figures. For comparison the total number of condos reported sold in the MLS for Hollywood in the first quarter 2006 was 4, for the first quarter 2007 it was 10, and for the first quarter 2008 to date it is 14. Today, most of downtown housing is comprised of new product introduced by developers with a small number of resale units coming on line. Just three of the many developers report 22 sales in just the past 30 days. Even in today’s market, most resales units are selling at a profit.
There is no lack of interest in living downtown… simply a restraint (hopefully temporary) of financing due to a systemic dysfunction in lending protocols because of the nationwide mortgage crisis. Even with a lack of lending support, there are those who can and are still investing in the downtown market. Downtown population grew 21% in 2006 since 2004. The median household income for downtown households with at least one income earner was $99,600 in the 2006 survey - almost double the average median income for the city. Of those households, about 17% made between $100,000 and $124,999 and more than 14% claimed an income over $200,000.
So, if many who were wary of downtown in its infancy retreated to the burbs, what lures those who are now buying and renting downtown with its 1% vacancy rate?
• Empty nesters who would rather live near Disney Hall and the Music Center and Staples/Nokia Theater and in a lively young community than Sun City.
• Entertainment, communications, internet, technology innovators and creative young professionals who don’t want to live in a cookie-cutter community and who want to use the area’s transportation linkages when they venture outside downtown’s energizing and supportive environment.
• People who decry a gated community and have joined with City government to be part of the dynamic of addressing the needs of the disadvantaged among us in the same way as Santa Monica has.
• The 8 to 10 billion dollars worth of development being poured into downtown neighborhoods on such projects as LA Live, Grand Avenue, Educational institutions including the Colburn School, Theatre restorations, Bringing Back Broadway initiative, new subway stations, hotels, parks and lots more retail.
Whether you want to live in an architecturally significant readapted piece of LA history or a vibrant arts community or in the middle of a cultural district in a luxury condo, downtown has it all! What downtown has that no area of the City will ever have is a place for every lifestyle imaginable. Downtown grew naturally from the birthplace of Los Angeles to become the diverse economic, social and cultural district it is today: not only the center but a microcosm of our vast city.
Downtown Real Estate Association
Those of us who both live and work downtown know the Times is uninformed even when the writers would have only to look out their window or look around as they hurry from parking structure to office. But, one wonders what the saturation point might be. Ever try to find an on-street parking space?
Rich and Friday. I gotta say this was an awesome read. I was thinking about my statements on Curbed.la as I read through the comments and I make the statement that Downtown was a mixed use community at one time with Victorian Houses everywhere. The only conclusion I can draw is that Downtown Los Angeles is going back to the residential community it was before these behemoth , phallic odes to man were built.Downtown wants to go back to it’s natural place in the larger scheme of things as the residential community it once was. Even the office space is being leased again because of the Residential Upswing;as workspace, that is. Real Estate people might have a tough time before we crawl out of this sub prime mess , but in Downtown that will surely pass.
On another note :we have a big battle brewing. When I supported the density bonuses around transit corridors I made one statement to our City. Protect the Single family dwelling unit neighborhoods. These are quickly becoming extinct. They are like an endangered species. And I am starting to see that that density bonus is being abused. Infill housing should not destroy the identity of those who bought where they are. We need to follow our General Plans. Downtown can hold the density of residential , infill development. It is quite interesting that Mid Wilshire got in on the action too. We just need to shore up the infrastructure. Look to Atlanta who got a lot of it’s water from far away. Take heed. We get our water from far away too. By bringing in more density are we going to tax the infrastructure , which of course water is? Just one example.
And for those who do not understand the fiscalization of land use, look that up and you will understand why this city fights so hard for big box stores and is approving luxury living where retail and restaurants can charge a pretty penny. Hint: sales tax.
Wow, Don! Honestly, that was a great response. I agree that single-family neighborhoods should be preserved. There’s enough room to grow in this city, on large boulevards with decaying commercial space, that single-family neighborhoods should be able to remain so.
“But, one wonders what the saturation point might be. Ever try to find an on-street parking space?”
That’s b/c the City anti-gridlocks (red zoning) most of the streets in downtown and the City. Creating fictitious highways on city streets, danger to pedestrians, and high speeds. We need the street parking back.
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