Downtown blues: Rough edges, falling prices

Downtown L.A. residential real estate is suffering more than the city as a whole, the L.A. Times reports tonight in a story that questions whether the much-heralded revival of the city center is really happening:

"Prices of condominiums, which dominate the downtown market, have fallen more sharply here than in Los Angeles and Orange counties overall, according to DataQuick Information Systems. More than one-third of the residential projects approved by city officials have been sidelined."

Telling anecdote: Developer James Osterling is working on a residential project in Chinatown, but isn't interested in living there: "Though he calls himself 'a huge believer in the renaissance in downtown Los Angeles,' he likes his Altadena house just fine.  If he did downsize, 'I'd probably get a condo in Pasadena,' he said. 'It has the theater, restaurants and culture without the rough edges of downtown.'

Rough edges.

Random personal observation: I've been working downtown for 3 1/2 months now, and the thing that strikes me is the lack of shopping. It's pretty much a retail dead zone. Just before Christmas I was trying to sneak in some lunch-hour Christmas shopping, and after a couple of attempts came to the conclusion it couldn't be done downtown, which surprised me. I don't know of another big American city where that's true.

Thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Photo Credit: L.A. Times.

Comments

[jaded]

you couldn't pay me to live downtown.

[sfvrealestate]

Great comments from everybody here. I worked in high-rises in downtown from 1987 through 1996. There was lots to love about downtown even then (although you really had to work at discovering it). Yes, there was lots to despair about then, too. I just think the loft developers moved way too fast. There is just not THAT much of a market for downtown lofts, and the market that exists is quite limited by age and family size demographics. And I think it's a real mistake to impose a new city on an existing city.
But Peter, you really have to check out the jewelry district!

[Lost in Deutschland]

What is up with all the luxury condos, especially in admittedly marginal areas like Downtown east of Spring? Who is going to buy all these condos? To me, this issue seems to be the failure. If the housing was actually cheaper in Downtown than housing in Pasadena or Los Feliz, people would definitely come. But it isn't and that's simply silly. Though I love Downtown, the simple truth is that it is not safe at night (e.g., skid row) or has the amenities of the Westside or Pasadena. Why would you spend more for less? Even out-of-town hipsters know that a little bungalow in Echo Park has more value than a luxury condo on Broadway.

[Liz]

It just makes me laugh so hard to read that young people bought the marketing crap of these "artists" lofts. Artists like what? painters perhaps? or dancers? let me tell you something, painters dont make money, so does dancers. The money comes from computer programmers and money managers. If you are a computer programmer hacking codes everyday, would you want to be in box, when you can be in hilltop overlooking the valley rather than looking down at tenements? The new yorkers want la to turn like NY. Have the people live like rats packed in stacked boxes while they make money out of these poor people. AH YOUNG PEOPLE, so stupid and inexperienced. Now their new fad is Barack. just makes me laugh so hard.

[miguel]

However you feel about downtown it has certainly improved over the years. The Homeless population is considerably less. There was a point where the smell of LA and 3rd street was unbearable in the summer now it is generally clear of homeless.

The problem is all of those welfare hotels along LA and broadway, they need to be closed and distributed throughout the city.

LA is over zoned.

[downtowner]

I've lived in downtown 10 years now. I go out on night jogs twice a week and feel totally safe. The change over the past years has been dramatic. More lighting, cleaner streets, greater police presence, and so on....

I'm an optimist. It's going to take more time, be patient. Downtown will eventually get there.

[Rich]

I had to laugh when I read some of these comments--on my one visit to LA in 2001 I got the impression the "downtown" area was so compact that it essentially seemed like an outer suburb of Santa Monica rather than vice versa. Californians suffer from the same problem most people do when considering these issues--not enough exposure to other places. Go to the downtowns of other American cities like Cleveland, Pittsburgh, Hartford, Philadelphia, Boston, etc., and see whether you feel still feel so bad about what you've got. Most downtowns in most large American cities became a disappointment in the age of the automobile and have remained that ever since. Most scenic smaller northeastern cities from Newburgh, New York to Norwich, Connecticut have main streets of empty buildings falling into decay because nobody can figure out how to make city centers viable for retail any more. Even the vaunted avenues of Manhattan are a disjointed collection of pockets of life and pockets of decay. You're not suffering a worse problem than the rest of us, you're just not aware of the larger problem...

[Ben W.]

I'm a new downtown renter and, so far, I'm loving it. But I live alone and that simplifies things. No worries about schools, playgrounds, children's safety, et cetera.

Contrary to a lot of opinions expressed in Peter Hong's article, I enjoy living in the loft environment. It's probably just a matter of taste.

I don't know LA all that well, but I wonder if part of the downtown expansion has been the result of the novelty and pent-up demand (or curiosity) for something almost maybe approaching a Manhattan style enviornment. Obviously, it's a long way from NYC, but it's still a lot closer than a subdivision in Redondo.

what do you think of my pet theory?

[TakeFive]

"Mr. Viles: Your comment ...smacks of a certain westside white-bread classist attitude,..."

Well at least the literacy of your detractors is improving, since this guy didn't accuse you of being white-bred (although we all know you were raised the son of poor, black sharecroppers).

Live downtown - no way. I'm down by there by Disney & Colburn in the evening often enough to know I wouldn't want to run out for a quart of milk at 11 pm. And that's the nice part of town.

Shopping? Do it online. Most of the time you can get a discount free delivery to your door. You get the added benefit of denying additional sales tax for our state to waste.

[Michael Snyder]

Somebody once called Los Angeles a suburb in search of a city and twenty years later it still holds true. I call it "New Yorkifacation", a phenom similar to the "Californication" of Oregon. Hordes of Californians emigrated to Oregon to build that bubble, but I just don't see the New Yorkers coming here. In the world of "high end" inner city living Los Angeles is just an upstart devoid of the iconic restaurants & entertainment venues that give places like New York, Boston & San Fransisco their unique character.

I'm not saying Los Angeles lacks for anything any city can offer (except the romance of Paris) but you have to brave traffic to get there. You'd be hard pressed to find the diversity of culture & climate available in southern California anywhere on earth which is why this real estate will always be expensive.

I've spent many a night filming along skid row and there's nothing quite as heart breaking as seeing a mother put her child to sleep in a cardboard box. As the sun goes down fires fueled by scrap pallets & paper ignite along 2nd St. as families huddle together along with the drug addicts and marginally insane rejected from our mental health system. This is the real story of downtown real estate and a symbol of shame for Los Angeles.

Simply shooing the homeless along the streets with selective enforcement in areas like Santa Monica & the beaches merely concentrates the problem into one area. The way things are going we're in for a "box bubble" at 2nd. & Los Angeles St. real soon.

[Matt]

Instead of developers offering discounts why not offer sub prime loans to lower income families in exchange for living side by side with the homeless? Maybe developers would be better off as part time economists rather than casino style investors.

[sjen]

I had worked in Hall Of Administration (that ugly government building next to The Cathedral, Music Center, and Civil Court House) from 2004 to 2007. Since I live nearby, I'd come to Little Tokyo for dinner on weekends. In short 3 years I witnessed the changes brought in by increased number of residents and metro stations.

I believe that downtown will be more residential and pedastrian friendly. In about 10 to 20 years perhaps. It takes time for the landscape and perception to change. It takes time to move the homeless out of downtown. It takes time for retail to move in.

One thing I do agree with some comments here is that the developers were moving too fast. The kind of pricing only works for transplants from NYC or London. How many of them are out there? If the developers were not so greedy as to price the units starting from the high $200,000 range (one bath, no room divider, no parking space, and no balcony), the potential buyer pool would definitely be bigger.

[Steffen]

No shopping downtown?! The garment district is some of the best shopping in California. Try not sticking to within 3 blocks of the Times Building.

[N. Scranton]

Until the homeless problem is addressed and resolved, downtown will never be a desirable place to live.

As the homeless numbers increase, so does crime and general blight to the area. These are real estate realities, and no agent or broker in their right mind should be selling condos downtown without fully disclosing the crime statistics and the homeless problem.

Clean up downtown first, then start selling lofts and condos. Until then, no thanks...

[TrojanDLA]

PETER, you of all people, have you forgotten the tale of New York City? Was Time Square not a wasteland of porn theaters and drug addicts in 1980? How about Chicago in 1990? Both of these cities experienced historic resurgences that have yet to stop, but somebody had to start somewhere. San Diego experienced a similar resurgence in the mid 90's into the heart of the housing bubble, but after a decade the conversion there is complete.

The truth is this: if we want Downtown L.A. to be a beautiful place to shop and live, SOMEBODY has to put money into cleaning it up and building it up. Well guess what? It's started, but this is only the beginning. Do people honestly expect this to be completed in 3 years? The new developments only started gaining traction in 2004 that's no more than 4 years ago and now that we are in a credit crunch, well, it has to be on hold. The quaint shops are coming, check out the Historic District around 4th and Main. Check out the new restaurants coming online along 7th.

But ultimately, if Downtown LA is to change, then we have to let it progress - comments like "LA is never going to change , it will always be a concrete wasteland" is no different than telling a person "you're fat too bad." Cities, like people, are dynamic, and with the right leadership, a city can improve itself no differently than a person choosing to hit the gym. The mayor has already committed to a larger police force and rezoning huge sections for residential development. The homeless have been moved farther and farther into oblivion. Compare and contrast Downtown today with its condition 4 years ago, and the improvement is striking.

And for those "residents" of Downtown, you've gotta admit that things have changed significantly for the better in the last 3 years in terms of 1. cleanliness 2. beautification 3. crime 4. homelessness. These steady improvements over time will result in a suddenly "different" LA after 8 years.

For those keeping track, the city has already approved of the L.A. River Park plan which will convert a 4 mile stretch of the river going by the industrial area into a dedicated green space park area. Just remember what Manhattan was like 40 years ago - cities can change if people are willing to let it.

Stop and look at the big picture - the change has begun but to measure its progress as if it's "completed" is very unfair.

[cec]

At least the immigrants will have many more options to choose from. Homelessness and despair, dirt and lice will not bother them -- they will feel right at home.

The rest of us?

[gerald]

I started going to downtown 20 years ago, some parts more than others, but at least four times a year. Downtown has come a long way and I think the housing downturn will actually help it a lot. During the bubble properties were being snapped for investment purposes. In other words, they were bought by people who had no intention to live in them. Most people who wanted to live downtown just couldn't afford it. Once prices come down 30% to 40% then you'll see lots of people moving in. But here's what I have seen:

Little Tokyo. Back in 98 I worked a summer for the city and used to park across the street from Parker center. Lots of people going to work. Dead at night except for a couple of misplaced Japanese tourists. Came back this year to see the Murakami exhibit on a Saturday night and was blown away, people walking about, we went shopping to a couple of stores. There was some construction going on. The Gold line is going to stop right in the heart of the neighborhood. I was impressed to say the least.

Broadway. Should be renamed via Grande. I have been going there for 20 years and it has changed a bundle. It used to feel like you were in a third world country with all the counterfeit merchandise and people speaking Spanish. It was the only place you saw people walking on the weekends. Now, you see gringos and Asians and blacks. Some stores catering to non-Spanish speakers. You may even see a person walking their dog. And the pedestrians overflow to other streets. I even went to a show in one of the old grand theaters, very nice.

I could go on, but the truth is there has been very noticeable change for the better. I really think the downturn will be good for downtown. I myself would love to live in downtown (its not for everyone), but just can't afford it. If the MTA figures out the regional connector thing that will improve things significantly. Don't underestimate the power of the EXPO line and the Gold line. The Gold line stop in little Tokyo is a big boost to the neighborhood and the EXPO line is going to bring a lot of USC students that have nothing to do in their neighborhood, especially when LA Live opens.

[MyLessThanPrimeBeef]

Disney Hall, Garment district, the Jewellery District, California Mart, the Grand Central market, great shopping, entertainment...

I thought going forward we were going to save, save, save and save some more...and more...

We are quitting that shopping addiction. What happened to that resolve?????

BTW, as for the Westside looking like Calcultta, it is not so bad...Oh, Calcutta, or as the French say, O quel cul
t'as...reminding me of that movie with Brigitte Bardot.

[Ria]

Mark these words. LA's housing cost will fall. LA is behind many other areas in the decline. It's coming, and even the entertainment industry won't keep LA outside of the recessionary times knocking on the door.

[campechano]

Excuse me, but the elephant in the room is that fact that THOUSANDS and THOUSAnds of people live in skid row with no future and no help. The police won't even venture in there. The thought of condo's selling at those prices without giving back to its community is totally unethical. I could never live in a place like that unless the builders, businesses and the city all agreed to pitch in and take responsibility. LA is NOT Dubai--thank you very much--.

[JohnnyB]

peter m… scathing, but accurate summary that highlights what tends to be overlooked when these downtown condos are priced out. They are in fact surrounded by a lot of real negatives in terms of making a “lifestyle” go of it in an affordable, safe, accessible area.

Christopher Eaton… good hype at the “promise” on the other side of conversation. A vibrant downtown with some tradition, spotty development and future prospects. This is certainly why LA’s downtown (and many other city’s downtown locations) are so “potentially” appealing. But, the reality is no where near the hype.

I would just add that I spent a while looking around downtown LA in late 2004… because of a lot of what your talking about. I was also familiar with the many downtown neighborhoods that were revitalized and developed in Chicago, where they converted all those old factories into cool lofts and condos. Very cool. In that city (conversely) there’s never a lack of options for nearby shopping, groceries, restaurants, bars, clubs, music, arts, entertainment, sports, etc.

But, here in LA’s downtown, the environment is so different and those negatives are still very weighty in the decision making. There’s an amazing lack of grocery shopping, an abundance of over-crowded scummy districts, an enormous homeless problem (and that means drug addicts and crime) and not a large assortment of galleries, restaurants, bars, clubs and entertainment options. And, those saying the fabric district is a good place for individuals to shop (for clothing) are ridiculous.

But, the MAIN problem that stood out SO CLEARLY when looking at downtown LA condos, is that they WERE (and remain) WILDLY OVERPRICED. And, they made them TOO FRICKIN’ SMALL. Because the developers were GREEDY.

If the city and developers really want to spur growth and revitalization they need to price these so that they FILL UP with actual people. I mean how basic is that? Many folks actually like a “gritty” environment, but only if it’s at a down-and-dirty price.

Most city downtown revitalizations that work are led by the “cool” crowd. Artists, musicians, entertainers (creative folks) and the like need to have an affordable, cool and fun place to call home. A community and network of “individuals” develops that attracts others and it builds and builds. They open galleries, clubs, hangouts, etc., and attract other people with money to spend and who also see that a very cool place to live is developing. Then you get the whole… “hey, this downtown is really happening… that’s where I want to be too”… and then suburban office workers fill in the ranks.

Of course, if a developer just wants to “hype” some sort of “exclusive” downtown neighborhood and price the condos in the stratosphere, what you get are spotty results and an overall negative response to the developer’s greed.

Otherwise, the only folks who can afford to make a go of it are rich folks. As you eluded to… “new financing that the Grand Ave. Project has just received from the Royal Family of Dubai”. If the goal is a downtown community of rich condo owners spending money at a few high-end developments, the LA developers have their work cut out for them.

[left of lefty]

The problem with downtown, perhaps unique among large cities in the world, is that there's just too much space around it. los angeles is huge in terms of land area. so the population has a lot of choices in terms of housing.

in other large cities around the world, like tokyo and manhattan, where land is scarce, then condos and lofts do a lot better because there's no other choice.

however, a vibrant downtown is not impossible. just look at the downtowns of pasadena and long beach.

[Zuke]

About a year ago I was forced to move from my cozy Hollywood cottage. Looking East, I thought about downtown and the blooming loft business. I looked. I saw 1000 sg ft for $3000. I did see penthouses, quite stunning, but so was the price, over $5000. I anchored myself in Westlake instead. Near but not in downtown.
The whole downtown loft scene was a marketing ploy from the beginning. Every loft website had the requisite flash, the nice graphics and the unappealing prices. The fact is, downtown is far from being the cultural or living space that so many loft companies claimed. It will happen. But it was extremely premature and frankly unfair. They should invited people to live downtown and create a unique environment without having to spend ghastly sums of money for dead empty space. In the end, it all balances out. Downtown will be fabulous, in time...until then...the loft companies should lighten up on their PR and their prices.

[PJ]

What is with this fixation on the scariness of the homeless? There seems to be a classist, perhaps racist, undertone in many of these posts that suggests that the homeless are just criminals waiting to strike.

Seriously, a baby stroller in the presence of winos? first of all, the word winos should be a dead tip off that this person is about 50 years out of touch with state of modern cities. Has the person who objected to that image ever been in a major city in America? We have homeless. It's sad but true. That doesn't mean that Manhattan or Washington, DC are uninhabitable.

The idea that DT is unsafe is a fabrication. It is just not true on an any level. Of all of Los Angeles ' police districts, Downtown has the lowest crime rate. The fact of the matter is that Downtown is as safe if not safer than anywhere else in the city. Why doesn't the LA TIMES cover that story?

[Homeless will win at the end!!!!!!!]

Ya, I remember the good old days 1993 to 2000 when the homeless glimed the streets, mexicans flow like water and traffic and smug clogged your ears and nose. And currently, its almost the same thing, I never felt safe in downtown then, and i still don't feel safe now. You really have to be the adventure type to buy a $500K condo from downtown. Also, did people forget that we live in earthquake country, do you really want to be living in a old converted to new high rice building when a earthquake hits???? how safe are these buildings???