It’s no surprise to anyone that California has some of the most expensive real estate in the country, and probably also the most prohibitive building standards. It takes longer and costs more to build anything in California than it does in many, but not all, other places. In this situation a couple of things invariably happen. First, people are going to renovate existing older structures because it seems to get you around a great many of the new regulations and makes investing in upgrades a smart financial decision. Also, the high end real estate market is on fire and prices on the very high end of the market are significantly higher than they were a few years ago. In Malibu, no one should be surprised if you see a beachfront home selling for $20-plus million. People seem to have lots of money and look ready to spend. Just drive down Malibu Road any weekday and you’ll see a load of contractors’ pickups parked there. Also, the people coming in obviously have big money, frequently owning several homes, so they are only part-time residents and many are not interested in becoming part of the community, because they are residents of other communities. It used to mean people came on weekends; now, many just show up a couple of times per year. Today, our buyers generally tend to be older so there are fewer kids in our public schools and even if they do have children, many are going to private schools. I also have a sense that as the community has changed, many of the rentals of granny units or pool houses are no longer on the market. In the old days, many of the original homeowners wanted that extra rental income and there was a flourishing illegal rental market that solved some of our local housing problems. Today for many that rental income is not essential and having a renter is more of an annoyance.
Malibu is kind of unique in its location and real estate prices. But what’s happening here is happening everywhere, just with cheaper real estate. Take Venice, for example. Venice for many years was a lower income area. The Venice canals had bad water circulation, were polluted and stank. The homes along the canal were run down and many were cheap rentals. They fixed the canals some years ago, upgraded the water circulation and the canals are now a very desirable and expensive place to live. But the lower income population was pushed out as the supply of cheap rentals kept getting smaller and smaller. Today, many of those people who rented those cheap, rundown apartments are living in cars or in tents.
The federal government’s eviction moratorium ended and soon there are going to be a bunch of evictions putting people out on the street. The Democratic left is angry at Biden for not doing what they were supposed to do and that is to gather enough votes in the congress to pass another moratorium. The federal courts have said the president cannot unilaterally declare it and that congress must act, which needless to say they haven’t done. If they wanted it bad enough, they should stop bitching and go corral the votes in congress, but that requires that they make deals and that they don’t want to do because they have to give the other side something. The political right is no different. They know what they do want. They know what they don’t want. Yet they can’t make deals either because that would be compromising, which is anathema to them also. The reality is we overall are a politically fairly middle-of-the-road country; change comes very slowly and neither side generally has all the necessary votes to make change alone, so if you don’t deal, nothing gets done. As I am writing this, I just heard that President Joe Biden just issued an executive order that stops evictions in communities with high COVID-19 rates, followed by a similar mandate from the CDC. It’s a way around the federal judge’s order for now, but I suspect it’s only a temporary delay and congress will have to pass something.
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The state legislature is trying to deal with the situation of not having enough housing and not keeping up with the state’s housing needs. Every session, bills go into the hopper and then get shot down. For example, there have been bills pushing to allow duplexes or four-plexes in R-1 neighborhoods. There have been bills to allow four- and six-story apartment buildings in towns and cities with nearby public transportation. There are many larger lots on Wilshire Boulevard or Santa Monica Boulevard or Olympic Boulevard that are near bus lines and light rail and could handle larger residential buildings. The rationale being that people won’t need as much parking if public transportation is available. I don’t need to tell you that the reaction, almost across the board, is that the locals don’t want zoning changed, they don’t want more density and they certainly don’t want more traffic. So that’s the battleground. In time, they will have to change the rules even if the locals don’t like it or the young will leave and the homeless situation will continue to grow. As I understand it, we have about 60,000 homeless in LA County, a county of 10,000,000. You would think we could handle it. What happens in time as it grows to 120,000 homeless or 180,000 homeless? No one knows.