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120 Pages Of LA Times’ Real Estate Ads Shine A Light On The Housing Crisis

PLANNING WATCH LA

PLANNING WATCH - In 2022 I paid over a thousand dollars for home delivery of the Los Angeles Times.  This is why I pay careful attention to the paper’s decline, revealed by its kitschy crime, sports, and celebrity stories, dwindling foreign bureaus, trimmed reporting staff, and dropped business and entertainment sections.  Likewise, LA’s once paper-of-record rarely runs display ads from major retailers.  

But one remaining source of advertising continues, two large weekend sections featuring expensive houses.   For example, the paper’s Saturday, March 4, 2021, edition contained two 60 page inserts, sections J and K, filled with luxurious homes that few Angelenos could afford.  Even though City Hall does not have enough money to maintain LA’s water mains, sanitary sewers, electric grid, roads, sidewalks, and street trees, the city’s leading newspaper’s real estate advertising sections continue unabated. 

If we analyze these weekly real estate ads, we can understand why the housing crisis is getting steadily worse and why City Hall’s short-term homeless programs, like refurbishing old hotels for temporary housing, do not make a serious difference.  After all, the high-priced houses that fill these advertising sections are just as much part of the housing crisis as the tents lining up on LA’s streets. 

Most of the local homes for sale in Sections J and K are expensive.  Section J includes a Beverly Hills mansion priced at $85 million, while houses in the $3-$6 million range make up the bulk of the listings.  If you prefer to rent, there is no problem finding a mansion going for $100,000 per month.  Those who can only afford to pay a miserly $10,000 per month have their pick of neighborhoods across Los Angeles.   But if you are an Angeleno suffering from the worst overcrowding in the entire country, you are out of luck.  The LAT’s expensive rentals are far beyond your reach, no matter how many relatives you can crowd into a room. 

There is no mystery why the overcrowded don’t buy or rent one of these houses.  They can’t afford them, and as their financial situation gets worse through underemployment and inflation, so does the housing crisis.  Even though most people experience the housing crisis by counting the growing number of tents on nearby streets, the upscale houses listed in the LA Times advertising inserts, are part of the same crisis.  The immiseration of the homeless and overcrowded at the low end, is a bookend for the luxurious housing and condos going begging at the high end.  They are two parts of the same housing crisis; too little for most and too much for a few. 

These paper’s two 60 page real estate advertising sections also reveal the following: 

  • The serious profits in the real estate sector come from expensive housing, not from the dwindling supply of lower-priced housing.   The latter’s slim profit margins hardly warrant inclusion in these LA Times advertising sections. 
  • Economic inequality is growing steadily worse. According to Margot Roosevelt, a Los Angeles Times reporter, “In Los Angeles, from 1980 to 2015, inflation-adjusted pay rose by just 3% for those in the bottom 10%, and by 18% for those at the median wage. For workers at the top, earning in the 95th percentile, pay rose by 69%.”  Since 2015 economic inequality has continued to get worse, according to the Federal Reserve Bank of St. Louis. 
  • Only a small percentage of the population can afford to buy or rent expensive houses, but their inordinate consumer power makes them a market segment that real estate agents fight over. Many realtors want the business of the increasingly affluent top 5 percent, not the 95 percent priced out of the luxury housing market, some of whom end up homeless. 
  • The price of housing, made worse by inflation, has spiraled upward. In combination with stagnant wages, this is why Angelenos rent, often from predatory companies like Blackstone.  According to the Los Angeles Daily News, median home prices in California were $150,000 in 1988 and soared to $800,000 by 2021.  In this 30 year period, low, mid, and high tier price housing prices increased by 350 percent. 

In combination, these trends reveal that most people have been priced out of the housing market in cities, like Los Angeles.  Their alternative to homeless and overcrowding is renting, the goal of companies like Blackstone.  As for public housing, the McKinsey consulting group reports that funding for public housing in Los Angeles declined by 70 percent since 2008

As long as economic inequality gets worse and is reflected in LA’s split housing markets, the efforts of LA’s elected officials to reduce homelessness while ignoring the root causes of the housing crisis will be futile.   It is time they considered alternatives, such as these: 

  • Increase wages.
  • Preserve older, cheaper housing.
  • Strengthen rent control.
  • Clamp down on discretionary zoning approvals, the engine for the inflated housing prices that give rise to both the LA Times real estate advertising sections and to homelessness and overcrowding.

 

(Dick Platkin is a retired Los Angeles city planner who reports on local planning issues for CityWatchLA.  He serves on the board of United Neighborhoods for Los Angeles (UN4LA).  Previous Planning Watch columns are available at the CityWatchLA archives.  Please send questions and corrections to [email protected].)