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[ LOS ANGELES ](https://mail.citywatchla.com/los-angeles)
# Los Angeles’ Doom Loop Becomes a Death Spiral
March 30 2026
Written by Richard Lee Abrams.
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THE VIEW FROM HERE - Wall Street’s monetization of Los Angeles housing with its excessively dense DTLA caused our Doom Loop, which is why Los Angeles cannot be saved. Once density has been added, who will pay another to demolish it? Look at the Graffiti Towers. When the foreign developer realized that it had been conned by Garcetti etc. to build its huge project, it stopped. It did not spend more money to tear it down. LA has apparently found a new sucker, KPC Development, to pay $470 Million to take over Graffiti Towers Oceanwide Plaza 1101 S. Flower.
Other DTLA developers and owners of high rises are walking away and allowing the banks to foreclose. For example, The Gas Company Tower (555 W 5th St, 777 Tower (777 S Figueroa St), 624 S Grand Ave, One California Plaza (1 Cal Plaza), 444 S. Flower formerly Citigroup Center.
Densification of Real Estate Is Only one-half of the Doom Loop
The other half, which makes even more money for Wall Street, is rapid mass transit. When the city loans money to a project, Wall Street earns hundreds of millions of dollars in interest and management fees, while gigantic construction companies earn billions of dollars. The city issues bonds, i.e., borrows from Wall Street, so that the city taxpayers have to repay the principle plus interest. Mass Transit’s real purpose is not to benefit Angelenos but rather to suck billions of dollars out of the public upwards to the 1%. That is the sole motive for the absurd subway underneath the 405 into the Valley.
As soon as the city increases density, it claims it needs mass transit in order to handle the increased traffic due people converging Bunker Hill, etc. The city always lies that subway or above ground fixed rail trains and trolleys will reduce traffic congestion. Congestion never decreases because of the Doom Loop. Densification leads to mass transit, and then the city claims it needs more densification so that there are enough riders close to the subway to pay for its operation. Residents who can afford to live in TODs own cars which makes traffic worse so the city calls for more mass transit to reduce street congestion, but it claims the need more population density to increase ridership. Judge Chalfant rejected the Millennium Project in Hollywood for this reason. Densification brings gridlock which mass transit cannot rectify. Each fixed-rail mass transit costs billions of dollars and traffic congestion has greatly increased since 1985. That is billions of tax dollars which Angelenos have unwittingly paid to make LA worse.
This Doom Loop process brings us to the exodus of the middle class who move out of LA; businesses follow them. In 1990 the City of Los Angeles had eleven of the Fortune 500 companies. Today it has only three Fortune 500 companies, and the City population is dropping for the same reason. People do not have to put up with decline and the smarter and younger ones leave. As shown above, in DTLA where the city went berserk with it excessive densification, the city is losing at least $358 Million in property tax revenue. DTLA’s vacancy rate, 22%, depreciates other DTLA office towers which will petition for lower property assessed values. Due to the Doom Loop, DTLA faces up to $70 billion decreased valuation loss over the next 10 years.
When the excessive densification causes population and businesses to leave, the Doom Loop cycle becomes the death spiral.
The Death Spiral Stops Construction
The State may mandate as much density as it desires with SB 79, but it cannot lock people inside LA. While the city is in the process of building excessive density, construction dollars flow into the local economy. It takes years before the densification-mass transit Doom Loop to reduce property tax and sales tax revenues before Death Spiral starts, fewer residents means less sales tax revenues and more empty buildings, causing lower property tax income so that the bottom falls out of the construction industry.
SB 79 The Dumbest Idea Known to Mankind
The Doom Loop has entered the Death Spiral, and SB 79 will only hasten our demise. While the city thinks that it can mollify the impact of SB 79, it cannot. All the decent single family neighbors within ½ mile of a TOD become unmarketable to Family Millennials. As long as residents could cloister themselves away from the densification areas and work at home, use Zoom meetings, and Amazon reduces the number of trips to the market, viable neighborhoods can exist. Beverly Hills did it with its Wilshire Wall behind which single family homes were safe. SB 79 outlaws such “Walls” as everything within ½ mile Wilshire would multi-use projects. Backed up with the folly of Builders’ Remedy (Government Code Section 65589.5(d)(5)), builders may build wherever they wish.
SB 79's and the Builder’s Remedy’s Fatal Error
No one can force Angelenos to stay in Los Angeles, and immigrants especially the more wealthy from Asia are already skipping Los Angeles in favor of interior cities like Denver and Nashville.
As Patrick Range McDonald showed in his Citywatch article, the Ellis Act continues to increase homelessness, while developers construct the type housing no one wants, e.g. multi-unit projects without parking. See [Ellis Act Destroys Affordable Housing](https://tinyurl.com/5ddh6fa8)
The Advent of Decommodification of Private Housing
Decommodification means that the government takes over all housing on the theory that housing is a human right which overrides private ownership. DSA-LA has decommodification as its core strategy to solve the housing problem – the city of Los Angeles will own housing and individuals will own nothing, neither their own homes nor any income producing properties. In more common language, DSA-LA supports “nationalization” of private ownership of all housing. Per the DSA-LA website: “We support the decommodification of existing housing and the development of new, decommodified housing.” When DSA LA councilmembers speak of Affordable Housing, they mean the city pays for the housing so that the city is owner and landlord. Occupants are not allowed to gain equity to accumulate intergenerational wealth.
Who gets which apartment or which house depends on kissing up to the DSA elites which always get the best. City Councilmember Nithya Raman lives in the expensive Lake Terrace Area of Silver Lake (90019) overlooking the lake and is worth about $1.9 million. Does Raman plan to decommodify her property?
*(**Richard Lee Abrams** is a former Los Angeles-based attorney, an author, and political commentator. A long-time contributor to CityWatchLA, he is known for his incisive critiques of City Hall and judicial corruption, as well as his analysis of political and constitutional issues. Abrams blends legal insight with historical and philosophical depth to challenge conventional narratives. A passionate defender of civic integrity and transparency, he aims to expose misuse of power and advocate for systemic reform in local government. You may email him at [RickLeeAbrams@Gmail.com)](mailto:RickLeeAbrams@Gmail.com)*
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