Amnesty for illegals (apartments, that is)

Per the LA Times (and via Curbed): Landlord and tenant groups in LA are uniting around an initiative to allow landlords to legalize non-conforming apartments more easily.

Right now, if the Housing Department catches a landlord with an illegal apartment, here’s what happens:

  • LAHD cites landlord for un-permitted unit, orders her to either get it permitted or vacate it
  • Landlord attempts to permit; discovers that it’s nearly impossible to do (because adding a unit always requires adding parking and adding parking is nearly impossible)
  • Landlord decides to vacate unit
  • Tenant is evicted; receives $8-19k from landlord (ouch), who must also pay to remove the kitchen and bathroom

The net result of the above is that the tenant is out a place to live and the landlord is out a bunch of money and receiving less rent going forward.

You can see why landlords and tenants have an incentive to band together to try to change city policy. And, lo and behold, they’re trying: The idea is to get the city to make it easier for the landlord to bring the unit into compliance so that the tenant can stay.

I’ve permitted a non-conforming unit before and it’s no joke. The problems break down into two categories:

  1. Bringing the unit itself up to code. That means appropriate ingress/egress, windows, fire protection, etc. This is almost always possible to do, so long as there is sufficient money… and the value-add from adding a unit would almost always justify the cost;
  2. Adding the parking. In my case, I was able to squeeze in another parking space by moving a giant electrical panel at the cost of $30k. But, generally, this is impossible, because there’s just not enough space on the lot and digging out subterranean parking would be totally financially infeasible.

So here’s the rub: If the city is going to make it easier to permit non-conforming units, it’s going to have to waive the parking requirements.  And the city has generally been very wary of anything that would reduce parking and therefore anger neighbors.

Have rents got so high that politicians are willing to consider allowing alienating homeowners by allowing landlords to reconfigure existing buildings to add more units? I doubt it. But I hope I’m wrong… because my business would get much, much better if it did!


What’s wrong with this picture?

I usually avoid giving design advice on this blog, mostly because my partner Jon is the design expert at Adaptive. I mostly do the numbers.

That said, I thought I’d draw your attention today to a classic error that landlords make when renovating apartments.

Look at this picture:


Can you see what’s wrong?

The owner decided to use tile or some kind of laminate for the dining / kitchen area.

The effect is to make the room feel considerably smaller than it actually is, because the eye is tricked into thinking it’s divided in two.

If, instead, the owner had continued the wood floor all the way to the far wall, the space would feel huge and open.

Why do people choose to do tile dining / kitchen areas? Well, I guess there’s an argument that they hold-up better when water is spilled on them. But tenants these days tend to cook a whole lot less than before.

That said, as between getting (1) higher rents but having to refinish the floors slightly more often; and (2) getting lower rents, I’ll take 1 every time.

Off with the security bars

How can you tell that Silver Lake and Echo Park weren’t always so nice?

The window bars.

Back in the 1980s and 1990s, both neighborhoods had plenty of shootings, burglaries, etc. People naturally responded by “up-armoring” their homes with strong doors, fences and window bars.

Now, both neighborhoods are very safe. It’s not that there’s no crime; it’s just that most of the serious stuff is gangster-on-gangster violence that does not involve civilians.

Meanwhile, those window bars are still up, mostly due to laziness on the part of homeowners and landlords.

But they send absolutely the wrong message about the neighborhoods. And, worse than that, tenant absolutely loathe them. No one likes to spend a lot of money to feel like they’re in jail.

So, do us all a favor and take a look at your Silver Lake / Echo Park property (properties?). If you still have those bars up, it’s time to send the handyman over to take them down.

Interesting piece on the history of LA zoning

I recognize that my continued harping on our antiquated zoning code is not the fastest way to build readership (to put it mildly). However, I am not going to stop writing about it, because zoning shapes LA in ways of which most people are not at all aware.

In any case, today I want to draw your attention to an interesting piece about the history of our code which was recently posted on the Recode LA website.

Here’s the money quote:

“[C]onflicts over the maintenance of the early postwar concept of good zoning have led to a great number of discretionary actions built into the Code. These have tended to increase the weight of those disinclined to allow change. This use of discretion has been at the expense of the creation of new housing. It has been at the expense of the environment and efficiency, displacing density from urban areas to exurban locations.”


An email filter I’d like

Can someone please figure out how I can block solicitations from brokers who want to sell me “turn-key” assets?

“Turn-key” is broker-speak for “No value left to add”.

Don’t misunderstand: There is a large group of investors for whom turn-key deals make a ton of sense, including everyone who has bought deals from me over the past five years.

Busy, wealthy people who want to place capital in multifamily can do a LOT worse than paying the market price for a very-close-to-perfect asset with high quality tenants.

And syndicators who can raise cheaply and don’t mind thin margins can do well with these deals, too, because they don’t require much in the way of management time and expertise.

But I’m not personally wealthy (yet!) and I’m not the best fund-raiser in the world (I’m temperamentally unsuited to bullshitting people). So the money we raise is expensive.

And that means we’re looking for screwed-up buildings, where there is plenty of value to add and excess returns to be generated.

So, please, no more calling / emailing me about “turn-key” deals… I’m totally uninterested.