Mary Cummins, Real Estate Appraiser, Animal Advocates, Los Angeles, California

Mary Cummins, Real Estate Appraiser, Animal Advocates, Los Angeles, California
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Showing posts with label gentrification. Show all posts
Showing posts with label gentrification. Show all posts

Saturday, October 12, 2024

Cause of Lack of Trees in South Los Angeles, Mary Cummins, Real Estate Appraiser

I just read the LA Times article "Study reveals attitudes about lack of trees in South LA." FTR I live in South Los Angeles in an area that has both a lot of trees and no trees. I choose my walking route based on the streets that have trees that can provide me with sun protection and protection from the summer heat. I can feel the huge temperature difference when I walk the two blocks with no trees to get to the one block with trees. The areas in SLA with trees have nice well maintained homes. The areas without trees have less well maintained homes, apartments, commercial and industrial buildings.

My first issue with the article is it starts off with a very racist comment by an alleged community leader. It's as follows: "Our lack of trees is not an accident or coincidence. It is a result of historic patterns of discrimination, disenfranchisement and racist planning practices." This is false. There is a lot more to the history of South LA and trees. Yes, racism and discrimination exist in Los Angeles but there has never been a policy where no trees were planted in areas because of race.When you automatically accuse everyone of racism and discrimination they are less inclined to want to help. You are attacking the people from whom you are asking for help which makes no sense.

First some history. Originally this land belonged to Native Americans for tens of thousands of years. Later the Spaniards stole the land from the Native Americans calling it New Spain in 1542. Spain claimed the specific area of California in 1769 and Los Angeles was established in 1781. Mexico got their independence from Spain in 1810 and controlled the land. California became a nation in 1846 independent from Mexico. In 1850 California became a US state. California was a free state and didn't have slavery but did have Native Americans and Mexicans.

Southern California was mainly rolling hills with sage scrub and grassland. Most of South Los Angeles didn't have a lot of trees naturally. The area is mainly flat land. It was used for farming because it was flat with few trees. The few trees were near creeks and rivers or in the higher hills. We are in Sunset Climate Zones 18–24. Only very hardy small trees, shrubs grow in the flat areas naturally though we have larger oaks, sycamores, pine trees, fan palm trees... near areas with more water. We are not a forest but a drier desert area without a lot of natural trees.

Around 1880 they started building a lot of homes. Most developments cut down native plants, trees then planted a lot of non native trees around the homes and lining the streets on the parkways. Some still exist today but sadly trees don't live forever so many have died. Many trees were not good choices for our climate, drought conditions so they died. 

From 1880 to 1940 most of South LA was middle class to more affluent. Around 1900 some more expensive developments didn't allow blacks, Mexicans, Indians... The LA Sugar Hill case ended housing segregation in 1945. School segregation ended 1947. Fair Housing Act was 1968. This happened all over the entire US.

Starting around 1945 some people left South Los Angeles and moved to more affluent newer areas. The reasons are because the housing stock was getting older and dilapidated as most homes were built 1880-1920. It was caused partly by the real estate cycle of decline. People wanted to move to newer developments. It was also caused by scaremonger tactics from real estate investors who scared some white people causing "white flight." They were told their properties would be worth pennies once other people such as blacks lived near them. Property values went down and continued to go down as the area fell into disrepair which is called decline in real estate cycles. People weren't maintaining the homes or the trees.

As the property values went down making it more affordable the percentage of blacks, Latinos went up. There is a correlation between income and race. Whites make more money than blacks, Latinos. People who make more money have more money and buy more expensive homes in more expensive areas. This has nothing to do with the Planning Department. Over time more POC lived in these more affordable areas of South LA. Over time the population has become mainly Latino then white then black. LA City Census shows 64% Latino then white, black equally. It varies by poll type and specific area. Little Honduras is more Latino. 

Lower income people tend to live in cheaper smaller homes, duplexes and apartments. For this reason there is a higher density of people in lower income areas. Because of income correlation this means there are more blacks, Latinos in these areas. People buy what they can afford. There are also lots of poor whites here. This explains the people to tree ratio in the Times article. It's not racism but economics 101.

Some people, neighborhoods, cities, organizations would plant new trees as older ones died from age, bark beetles, drought, damage from utility line tree maintenance programs... Those are generally middle income areas and up in Los Angeles. Many times the homeowner, property owner planted a new tree to replace dead ones in front of their property. Legally property owners are responsible for maintaining the parkway and trees in front of their property. That is the little strip of land between the street and sidewalk. People are supposed to maintain the city trees on their parkway though the city will trim it. Many in lower income areas do not maintain the trees on the parkway. Most people are lower income tenants in these areas. Tenants don't maintain anything. Landlords don't live there and don't really care. Not as many are owner occupied homes. Property owners are the main reason there are no living trees on the parkways in those areas. 

Property taxes from specific areas generally pay for city repairs and improvements in those specific areas. These areas have lower values so they have less revenue from property and other taxes. They have less money in their budgets for tree planting. Generally politicians will pass new programs based on what the constituents want. They take polls. The people living in the areas wanted more police protection, general clean up, affordable housing, parks, school improvements... They did not want the few city dollars spent on new trees. It's what they wanted. Tenants and landlords vote equally.

After many years with no new trees planted and older ones dying there are fewer trees in South LA today. Some nonprofits and neighborhood organizations started fundraising to buy and plant trees in South LA. They planted some trees. Many were not watered or cared for and they died. Some were stolen. Others were vandalized. I've seen all of this first hand. I'd replant the ones ripped out by vagrants. I'd water some. I picked up two that were knocked over by cars, replanted and restaked them only for them to later be stolen. I saw someone load one in a truck but he had no license plate so I couldn't report it like that would have done anything anyway.

Some see new trees as a sign of "gentrification" so they destroy the trees which is crazy. Gentrification is just the real estate cycle of revitalization. It's been happening all over the world since the beginning of time. People get pushed out of more expensive areas so they move into adjacent areas which are more affordable. This causes home prices and rents to go up in those areas. Some existing tenants will have rent increases as the area improves. I've found in my area which is mainly Latino that more affluent Latinos are replacing less affluent Latinos. It has nothing to do with race or color but money. It's based solely on economics. In one case middle income Latinos moved into an area of lower income Latinos. The lower income Latinos broke windows, graffiti'd the businesses of the middle income Latinos because they didn't want their rent to rise. What really gets me is the lower income people who own the property are happy as hell to sell for 10x what they paid for it. It's only a few tenants who complain. Since the beginning of time people would just move to another area they can afford but today they protest and blame others and call people racists.

All that said we do need more trees in South Los Angeles and other areas with few trees. The City of Los Angeles has had tree planting programs called "City Trees," "Million Trees LA" for years. They give away free trees all the time. In 2006 the goal was to plan a million trees in a few years. It was not that successful because people didn't care for the trees and they died. They were also not the best trees. I saw one which was a purple potato vine bush pruned into a tree. They are ugly if you don't prune all the time and they provide no shade. I think the tree provider just wanted to make a lot of money off the city.

Any program for new trees must work with the community where they will be planted. People need to sponsor and volunteer to maintain the trees block by block. I can only handle the blocks I walk which is two miles a day. It should probably be a paid group of tree guardians which would also provide some jobs to locals. They need to talk to the homeowners and the homeless people living around the trees. The city, block club, tree group, community organization...can all work to plant and cultivate the trees but if homeless people, vagrants, others steal and destroy them, there will never be enough trees. As areas are revitalized there will be more successful tree plantings.

After I wrote this I took a walk in my area of SLA. I noticed trees were dead in front of apartment buildings, commercial buildings more than homes. Apartment and commercial building owners don't generally live at the property they own. They don't care about trees. They also probably don't realize it's their responsibility to maintain the parkway. No one enforces maintenance of the parkway or trees. One idea to aid in enforcement would be using Google maps street view. You can clearly see if there are trees just looking at the maps. They now even have green colored areas for trees on the maps. Sure Google would write a quick script to get addresses that don't have trees so notices about free trees could be sent with their property tax statements. Or maybe the city can instead of giving away free trees for people to plant on their private property they can go plant some on the parkways where they are missing. They will need to maintain them and should be drought tolerant, hardy and a type of tree people won't want to steal. No one waters the parkway in lower income areas. 

An education campaign about maintaining the parkway might help. Another idea would be to make it mandatory to have a tree of certain species on parkways every so many feet maybe 25'. Average lot is 50 wide so two trees in front of each house away from street signs, utility wires sounds good. One would just have to enforce the tree mandate. If someone doesn't plant or request to have a tree planted by the city or doesn't maintain a tree, they can be fined, have a fee added to their property tax. A professional organization can then be paid to plant and maintain trees. At the last house I owned I added a sprinkler system to my parkway. I also paid an arborist to give me advice to make my tree healthier. 

The problem with my idea is that lower income people will complain about having to pay a fine or do work to plant or maintain a tree. They will scream discrimination and blame it on the "racist" city. I have no faith that anything can be done because the people complaining about lack of trees don't want to do anything about it. They don't even want to maintain the parking strip which is their legal and financial responsibility. After following the tree issues for years I throw my hands in the air on this one.

Here is the LA Times link or you can read it for free via Yahoo news by searching the title. 

https://www.latimes.com/environment/story/2024-10-11/there-is-no-easy-fix-study-reveals-attitudes-about-lack-of-trees-in-south-l-a


Mary Cummins of Cummins Real Estate is a certified residential licensed appraiser in Los Angeles, California. Mary Cummins is licensed by the California Bureau of Real Estate appraisers and has over 35 years of experience.


Mary Cummins, Mary K. Cummins, Mary Katherine Cummins, Mary, Cummins, #marycummins #animaladvocates #losangeles #california #wildlife #wildliferehabilitation #wildliferehabilitator #realestate #realestateappraiser #realestateappraisal #lawsuit real estate, appraiser, appraisal, instructor, teacher, Los Angeles, Santa Monica, Beverly Hills, Pasadena, Brentwood, Bel Air, California, licensed, permitted, certified, single family, condo, condominium, pud, hud, fannie mae, freddie mac, fha, uspap, certified, residential, certified resident, apartment building, multi-family, commercial, industrial, expert witness, civil, criminal, orea, dre, brea insurance, bonded, experienced, bilingual, spanish, english, form, 1004, 2055, 1073, land, raw, acreage, vacant, insurance, cost, income approach, market analysis, comparative, theory, appraisal theory, cost approach, sales, matched pairs, plot, plat, map, diagram, photo, photographs, photography, rear, front, street, subject, comparable, sold, listed, active, pending, expired, cancelled, listing, mls, multiple listing service, claw, themls, historical appraisal, facebook, linkedin

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Tuesday, September 7, 2021

Gentrification and Urban Renewal, the issues and solutions for an improved community. Mary Cummins


The article linked below is an interesting read about "gentrification." The article states people should be more upset about the areas not being revitalized but they're not.

"What we talk about when we talk about gentrification. The worst problems are in the neighborhoods that aren’t gentrifying." By Jerusalem Demsas@JerusalemDemsas  Sep 5, 2021.

https://www.vox.com/22629826/gentrification-definition-housing-racism-segregation-cities

The term is not even American. It was coined in 1964 by a British sociologist to describe the British "gentry" moving into working class areas. It has to do with affordability. It's not the racial issue that it's become here in the US starting in the 1990's. "Gentrification" is not a dirty word as stated by today's US media and some local community groups. 

The article states "But the core rot in American cities is not the gentrifying neighborhoods: It is exclusion, segregation, and concentrated poverty." I agree with this. The article goes on to state the exclusion, segregation and concentrated poverty is caused by unequal income. Poor people live in less expensive areas they can afford. It would make more sense to help them make more money so they can afford an apartment, living expenses, education ... This concept goes hand in hand with the recent false articles about appraisers appraising homes owned by black people for less than homes owned by white people. POC are more likely to have less money and buy less expensive homes in less expensive areas. The homes used in the data weren't even appraised by appraisers but by robots. 

The article stated "Gentrification as the juxtaposition of the haves and have-nots." I see this every day. Someone with less money moves into an area with less expensive rent. Over time the city, businesses, neighborhood groups improve the blighted area as part of urban renewal and revitalization. New parks, streets, stores open as the area is cleaned up and improved. Sometimes the people demanding that the city improve the area are the ones who end up complaining about the improvement which increases property values and corresponding rent. Long time resident property owners are happy but not the tenants. Those tenants originally drawn to the blighted area for cheap rent now may have to pay a higher rent or move. This upsets them and causes them to protest, attack new businesses and new neighbors falsely claiming the new people are intentionally destroying their culture, history and language. The renters actually just want the money, homes and stores the new people have. 

From the article, "It’s no wonder that people who have faced centuries of disinvestment grow angry as public and private money flows into their neighborhoods only after high-income, college-educated people choose to move there. Even if those people are not wholly responsible for the inequality, the blatant injustice is hard to ignore." 

This is why some Latinos in Silver Lake attacked new white owned businesses and residents. What's ironic is in that area Latinos replaced Jewish people who replaced Asians who replaced Mexicans who replaced Spaniards who replaced Native Americans after stealing their land. Which one is the bad gentrifier? At least the people who came after the Mexicans bought the land and didn't steal it. 

I'm positive that if you offered the current lower income tenants to either stop the revitalization and let the area become a more blighted but affordable slum or increase their income so they can afford a nice apartment in an improved area they would prefer to increase their income. This is the no brainer solution to the conflict. Help lower income people increase their income. The solution is not to stop urban renewal and revitalization. That would mean encouraging blight, crime and loss of housing units. From the article, "As George Washington University professor Suleiman Osman wrote in his 2011 book The Invention of Brownstone Brooklyn: “Stories abounded of renters [in Brooklyn] being pressured by landlords to leave revitalizing areas. But non-revitalizing blocks with high rates of abandonment and demolition saw rates of displacement that were just as high.”

The people moving into these less expensive areas don't just have more money. They are also more educated and different in other ways. This can cause friction with some people similar to what's happening in Texas with the California tech industry relocation. In Texas things are even worse because property tax goes up based on current market value. This means an elderly person who has lived in a house a long time now has to pay very high property taxes. They generally are forced to sell and move. At least in Los Angeles we don't have the same property tax issues. 

Gentrification isn't always about people of color being displaced by white people. Again, Austin, Texas is one example, another is England. The tech industry is more diverse. People of color and wealthier more educated white people are displacing less educated, less wealthy white people in Texas. It's not a race issue but a wealth issue. Obviously the more wealth a family has the better education the children can receive. 

A main issue of people who cry “fire, fire, gentrifier” is increased rent. That's not always the case. In Los Angeles, California we have rent control which prevents most of this. I've seen people who have stayed in their same cheap apartment since the '70's for this reason. During that time they've even bought homes which they rent to other people which doesn't really support the purpose of rent control.

"Overall, the research literature leans toward the view that gentrifying neighborhoods can lead to displacement, but they don’t have to. Gentrification can bring with it the promise of integration and sorely needed investment that can increase residents’ quality of life — but only if disadvantaged residents are set up to take part in the benefits of increased investment."

The article goes on to summarize the situation as "City by city, the message is clear: Segregation and concentrated poverty are the true blights of urban life, despite our fascination with gentrification." They're talking about segregating people with less money and not race. Here in Los Angeles and most of the US there is a correlation between people of color, immigrants and having less money. That's not the case in Texas, England ...

The article offers a solution to the real problem, "How to ethically create integrated neighborhoods. First, the economic literature is clear that increased housing production reduces rents. Second, tenant protection policies could help forestall some evictions. Third, rezoning of wealthy white segregated neighborhoods could slow the speed at which gentrifying neighborhoods change, and help tackle segregation. These types of interventions can provide a roadmap for how to ethically integrate urban neighborhoods."

By rezoning they mean allowing 2-4 units in some residential single family zones near public transportation. They're not talking about turning Beverly Hills estate neighborhoods into huge apartment buildings with only cheap studio units. Limiting homes to single family only zones is a more recent development in cities. Years ago in Los Angeles you could almost build whatever you wanted anywhere. By the 1900's the first developers and then cities limited zones to single family, 2-4 units, apartment buildings, commercial, industrial.... because that is what home buyers wanted. Some early examples are housing developments which had deed restrictions starting in 1903. The deed restrictions didn't have to do with race, color or nationalities but with the type of properties that could be built in the development. Some restrictions included quality, styles of homes, set backs, height, size... Only homes could be built in those residential developments. 

The article ends with this, “Gentrification is a cultural sphere to work out feelings of resentment around inequality. ... Those feelings aren’t to be discounted,” Gottlieb argues. “This is a manifestation of a long-running sense of ‘I am not welcomed in the city, I don’t have a right to the city.’ Sometimes those feelings can be worked out in the cultural terrain of gentrification, even indeed if the people moving in aren’t the proximate cause for them leaving.”

We need to deal with the issue of "gentrification" for what it actually is which is revitalization. People pushed out of more expensive areas move into less expensive areas. The city, businesses and community improve and revitalize those areas. The revitalization must just be done ethically while still attracting new business investment to the area. Most importantly we must help people with less money improve their financial situation. This would help all of us and our community by solving the disparity of income, home ownership rates and home values among wealthy and less wealthy people. It's not a race but a financial issue. Fighting, NIMBYism and trying to stop all development is not the answer. That would just make the situation even worse for everyone.

Mary Cummins of Cummins Real Estate is a certified residential licensed appraiser in Los Angeles, California. Mary Cummins is licensed by the California Bureau of Real Estate appraisers and has over 35 years of experience.


Mary Cummins, Mary K. Cummins, Mary Katherine Cummins, Mary, Cummins, #marycummins #animaladvocates #losangeles #california #wildlife #wildliferehabilitation #wildliferehabilitator #realestate #realestateappraiser #realestateappraisal #lawsuit real estate, appraiser, appraisal, instructor, teacher, Los Angeles, Santa Monica, Beverly Hills, Pasadena, Brentwood, Bel Air, California, licensed, permitted, certified, single family, condo, condominium, pud, hud, fannie mae, freddie mac, fha, uspap, certified, residential, certified resident, apartment building, multi-family, commercial, industrial, expert witness, civil, criminal, orea, dre, brea insurance, bonded, experienced, bilingual, spanish, english, form, 1004, 2055, 1073, land, raw, acreage, vacant, insurance, cost, income approach, market analysis, comparative, theory, appraisal theory, cost approach, sales, matched pairs, plot, plat, map, diagram, photo, photographs, photography, rear, front, street, subject, comparable, sold, listed, active, pending, expired, cancelled, listing, mls, multiple listing service, claw, themls, historical appraisal, facebook, linkedin

Sunday, April 21, 2019

Ideas to help solve the housing crisis. Here are a few ideas from others and some of my own. Mary Cummins

How to solve the housing crisis, homeless, eviction, homelessness, house, home,condo, shelter, apartment, building, mary cummins, los angeles, california, ideas, solutions
There is no doubt that California has a Housing Crisis. Not enough units have been built in the last 30 years to keep up with the demand for housing. Insufficient housing has been built because of rising cost of land and construction, miles of red tape in development and  NIMBYs (not in my back yard) to name just a few causes. The article linked below has some good ideas to help solve the housing crisis. I will list all the ideas then add my own.

  • Provide resources and incentives for local governments to pay for their fair share of housing.
  • Integrating housing and transportation planning and investment.
  • Working with locals to reduce regulatory barriers to production.
  • Making state excess property available for affordable housing. 
  • Providing financial assistance to developments to ensure long-term housing affordability.
  • Recognizing that wildfire, climate change, water supplies and quality, environmental protection, efficient transportation and protecting good jobs are all involved. 
  • Change zoning restrictions so multi-family buildings can be built in other zones.
  • Expand tax incentives for below market rate housing construction.
  • Stop adding costs to the home building process with more costly laws and regulations.
  • Roll back some of the out of control building fees.
  • Allow an increase in density along transit corridors.
  • CEQA reform to make it easier and quicker to get projects approved.
  • Guarantee a living wage so wages can keep up with rent increases.
  • Train young people through union apprenticeship programs so they can earn more money.
  • Ensure new buildings are sustainable for the environment.
  • Provide rental assistance to help families secure a home.
  • Protect renters from losing their home and falling into homelessness.
  • Every city in the state must build affordable housing.
  • Allow novel housing options such as micro units, cooperatives, co-living, modular housing.
  • Increase homeowner property tax exemption which hasn't changed since 1974.
  • Reform RHNA process to increase development of homes.
  • Don't allow NIMBYs to use CEQA to stop housing projects for political reasons.
Below are some of my ideas. My basic idea is to have pre-approved plans for standard 2-8 unit two-story buildings on 50' x 100' or 150' lots which NIMBYs can't reject or even have a say in the matter after initial approval. I'm talking about sites already zoned for multi units which only have one old house which are R2+ and other zones which are grandfathered such as C2. The public can have a say in the initial approval of the cookie-cutter units but not after that. This would cut down on the holding costs from permit to occupancy certificate. It would also cut down on the architect, design fees by having the plans be in the public domain. This would make it easier and faster for building and safety inspectors to inspect. 
  • Have pre-approved plans for cookie cutter developments on R2+ standard lots for 2-8 U.
  • Have pre-approved plans for ADUs.
  • Educate poor people about how to work, save money to buy, maintain a home. 
  • Protect poor people from real estate scams. I've seen so many people get ripped off because they didn't speak English, couldn't read or write or just were uneducated and naive.
  • Inventory all vacant properties, underutilized and raw land. Work with owners to make vacant properties habitable, redevelop or sell. Same with vacant land. Other cities have done this with help from cities, developers and non-profits.
Below are some pics of new two and four unit buildings which are cookie cutters. There are a few developers building these on lots with only one old major fixer home. The first is two units, two story. The units are 3 bed, 2 bath which can house an extended family. The ones I've seen have good sized rooms so there could be two beds in each room and/or bunk beds. 


Below is a four unit building. These are plain buildings that meet strict city of Los Angeles building and safety building codes. There should be one plan for properties with an alley which has parking in the rear and properties which don't have an alley and will need a driveway to garages in rear.  

I also believe the city, county, state should do an analysis of the current housing stock. It should include a list of vacant land suitable for housing, under developed properties and properties with inhabitable structures. Plans should be made to give the owners incentives to rehab, develop or rehab the properties. Other cities such as South Bend, Indiana has done this with success.

Government should also look at the various properties and their zones. Perhaps some non-residential zoned land could be used to build multi-family. Maybe some areas zoned R1 which already have some multi-family can be rezoned for R1.5 or R2 uses. Perhaps people with R1 properties should be allowed to legally rent out the individual rooms to different individuals. People are already doing this illegally. If it were legal, there could be regulations to make sure the housing is safe and the tenant is protected. Generally if you share a kitchen in a home, you're not a tenant. You could be evicted with no notice. I'm sure there are many more ideas out there. I welcome a multi-prong approach to help solve the housing crisis.

Let me add a list of things that won't help the housing crisis. In fact these things have caused and made the housing crisis much worse.

  • Rent control. This will cause landlords to remove units from the market. It will cause developers to buy run down buildings, either demolish or do major renovations, pass that through to the tenant who can't afford it and tenant will have to leave. Rent control makes things worse. Developers won't build if they think the buildings could have rent control. As rents rise so do landlords property tax, insurance, supplies, labor, permits, maintenance...
  • Yelling "gentrification" and attacking developers, development as "evil" because the rent has risen for some tenants in some buildings. "Gentrification" is actually a real estate cycle called "revitalization." It's not a dirty word. I wrote an article about it here. If you don't revitalize the area, you create slums. Revitalization creates jobs, causes wages to increase, adds living units, improves the neighborhood, increases value of real estate, increases revenue to businesses, the city, county, state and federal government. More jobs, more homes are created for each tenant who must leave a building for redevelopment. The tenant gets relocation fees in the thousands. Notice property owners are fine with property values increasing. It's only the tenants who are not. Notice offices, retail stores, restaurants have to move. They realize it's just economics and move. DTLA artists moved from those artist lofts to lofts in Long Beach. When Long Beach became more expensive they move to lofts in Santa Ana. If you want low rent, you have to live in a low rent area. 
  • Building condo units for poor people to buy under market value. When the value of the unit increases, they will want to sell for profit. Some don't allow the owners to sell for profit. When they don't, the owners refinance all of the equity out of the property. Most end up in foreclosure because they can't sell the condo for market i.e. more than their new loan. These people didn't have enough money or income to buy a home. They are set up to fail and lose their home. I've seen this happen repeatedly. The owners also stop paying HOA dues as the complexes fall apart. This is one of Bernie Sanders ideas so is rent control and yelling "gentrification." He needs a real estate consultant because all of his ideas fail in real life. I've been in real estate since 1983, over 35 years. I watched rent control in BH, WH, SM and LA. It failed. 

https://www.sacbee.com/opinion/opinion-influencers/article229271379.html

Mary Cummins of Animal Advocates is a wildlife rehabilitator licensed by the
Mary Cummins of Animal Advocates is a wildlife rehabilitator licensed by the California Department of Fish and Game and the USDA. Mary Cummins is also a licensed real estate appraiser in Los Angeles, California.


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Wednesday, April 5, 2017

Real estate cycle Gentrification, Revitalization by Mary Cummins Real Estate Appraiser Los Angeles



What some call "gentrification" is actually just a real estate cycle. There are four cycles through which an improved property will pass in its lifetime. The cycles are caused by ordinary physical deterioration and market demand. Those four stages are as follows:

1. Growth -  When improvements are first made and property demand expands.

2. Equilibrium or Stability - When the property undergoes little change.

3. Decline -  When the property requires an increasing amount of upkeep to retain its original utility while demand slackens. Rents and property values decline.

4. Revitalization or Rehabilitation - When demand increases for any reason serving to stimulate property renovation. Demand generally increases when people are priced out of adjacent areas and need more affordable nearby housing. 

The first three stages of a property's life cycle are also termed development, maturity and old age. The principle of growth, equilibrium, decline and revitalization can also apply to entire neighborhoods.

Los Angeles’ neighborhoods are ever changing. One example of this is downtown Los Angeles. It’s gone through many cycles of change. It currently is nearing a peak with all the new construction and rising interest rates. Read this article as of today’s date of April 5, 2017. 

In a year or so there may be an oversupply of luxury apartments, condos and lofts (happened October 2017 with 12% vacancy rate for luxury units) like there was during the great recession which started November 2007. The great recession was caused by a real estate bubble bursting while at the same time poor quality home loans were made and sold on the derivative market.  Downtown Los Angeles (DTLA) properties went down just a little over 50%. Some luxury loft projects which weren’t finished at least six months before this date were foreclosed upon. HOAs even went bankrupt. Some luxury loft buildings became rentals instead. 

A real estate cycle which irks renters in the DTLA areas is “revitalization.” They like to call it “gentrification.” Gentrification is defined as “the process of renovating and improving a house or district so that it conforms to middle-class taste.” People living in say West Los Angeles can no longer afford the rent or cost of a home in West Los Angeles because their wages have been stagnant. They seek out cheaper up and coming areas to rent or buy such as Boyle Heights. It's about money.

Current renters in Boyle Heights are upset that the area has improved, new luxury condos were being built and more importantly their rents have risen or they’re being evicted so the building can be renovated or torn down and a larger, newer one built. They feel their rent should stay the same even though the landlord’s property tax, utilities, interest rates, repair costs ... have risen significantly. There’s also new development, new stores, boutiques, coffee shops, more people and more demand for housing. The area has improved so market rent will of course be higher. Rents correlate directly with property values. In 2020, 2021 home values increased 15% or more a year. So did the corresponding rents.

Some of these lower income renters go so far as to say it’s wealthier whites pushing out poorer Hispanics, Blacks and their culture. They even broke the windows of and vandalized a new coffee shop and book store to hopefully “scare” away the newcomers. One of the coffee shop owners is Latino. They don’t realize that before Boyle Heights was a Hispanic community it was a Jewish and Chinese community. Before that it was Mexico. Before that it was part of Spain. Before that the land belonged to the Native Americans. These people are only upset about “their” rents rising. They don’t care about the people who own the buildings with rising costs who are generally also Latino or Black. They didn’t care about the people who were there before them whom they pushed out. These people are actually guilty of and benefiting from what they call "gentrification." They took someone else's home. If the area were not improved, it would still be unimproved farm land, vacant land or small run down single family residences. They would not want to live there. The rent they are paying supports revitalization. And the people moving in aren’t all whites. They’re also Hispanics, African Americans, Asian.... The main difference is income.

The main change in the race, color, ethnicity ... of an area has to do with changing socio-economic factors such as income, buying power, marital status, single mother household with young children under 18, credit scores ... The more income you have, the more wealth you have, the more expensive home you can buy, own or rent. Research has proved that whites make more money than blacks and Latinos. This is the cause of the wealth gap between most whites, blacks and Latinos. For this reason whites buy, own and rent more expensive homes than blacks, Latinos. Below is Tobias Peter and AEI's report which shows this. If the government wants to end the white black/brown wealth gap, they need to end the income gap and help people increase their income and buying power. 


It’s never the property owners who complain about their property values going up. It’s a few maybe 3% of very low rent people who intentionally moved to the area to take advantage of the low rents in a debilitated area. Some of these “artists” living in “lofts” even have the nerve to state they are the reason why the area improved in value. They think they attracted new businesses. They are never the reason why the area improved. They merely took advantage of then low rents during that cycle. Or maybe they are long time renters who took advantage of the rents staying low because the area declined. 

97% of the people in the community, property owners, business owners, tenants paying market rents, cities, counties, states getting increased taxes are happy about revitalization. There is more income to pay for lower income programs and low rent projects not to mention community improvement projects like cleaning, beautification, parks and improved schools. Should we stop revitalization to make 3% of the lowest income people happy by subsidizing their low rent because they don't have to move to another low rent area? Everyone has to move for one reason or another. It's a good thing for everyone overall. FTR I'm not a property owner. I've had to move to lower rent areas.  I understand. 

Instead of complaining these people need to move to another area with low rents if they want their rent to stay the same. That’s why some Los Angeles artists moved to Santa Ana, Anaheim and Long Beach industrial areas. They’re cheaper than LA. Many people moved out of California for this reason. If they want to forever pay low rents they’ll have to ride the real estate cycle. They could also increase job skills and seek out higher paying jobs. I realize not everyone can do this but it's an option for some. If they really want to take advantage of this cycle, those that can, can work hard, save money, buy property in dilapidated areas and ride the wave as values increase. If they want to rent out their properties for $1 to people with less income, they can do that and lose money. 

Commercial, retail, industrial tenants have also had their rents raised or buildings razed. They move to a cheaper area. They don’t yell “gentrification” and break the windows of coffee shops. They're business people who know it’s purely economics and move. 

As stated earlier people who are pushed out of more expensive areas move to lower cost areas. It's not just in California. It's all over the nation and the world. This has been happening forever, since time immemorial. Right now people are leaving expensive California and going to Texas, Arizona, Nevada, Montana. Relative to California those places are "cheap." This has caused home prices and rents to rise in those other states. They're not yelling "gentrification" even though it's the same economic process at play. It's basic economics. 

All that said we desperately need affordable housing in Los Angeles. It’s a separate issue from revitalization. The main reason some poorer people can’t afford rent is there aren’t enough units. It’s supply and demand. NIMBYs and red tape has made construction almost impossible in LA over the last 30-40 years. We are years behind the number of units we need. Another big reason is that poorer people’s income hasn’t risen along with rents. This is caused by big business and government keeping lower income people’s wages low. This is caused by the upper 1% using their money and lobbyists to get bills passed which hurt lower to middle income people. I’m talking about Walmart, Walgreens paying poverty wages. These are the real reasons why poor to middle income people can’t afford rent in LA. 

Mary Cummins of Animal Advocates is a wildlife rehabilitator licensed by the California Department of Fish and Game and the USDA. Mary Cummins is also a licensed real estate appraiser in Los Angeles, California.


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