The kind of regulation that drives me crazy

Hat tip to Adrian over at Curbed for noticing a new, irritating piece of regulation from LA’s city council.

Here’s the regulation, in a nut-shell:

“The LA City Council … preliminarily pass[ed] an ordinance that will make it illegal to covertly demolish buildings more than 45 years old… The ordinance requires property owners to notify neighbors and their Council District Office, and to post notice on the property, for 30 days before they can get a demolition permit for an old building. It also introduces a $60 fee for anyone looking to tear down an old building, to cover costs.”

It’s only 30 days, right? Not a big deal, you might think. Wrong. Why?

45 years ago, LA was basically a bunch of inter-connected suburbs. A ton of residential structures were not built as densely as the zoning allowed. And much of the commercial space reflected the times in which it was built (for example, strip centers with awful parking lots abutting sidewalks and making neighborhoods feel terrible).

Developers big and small are now making money by buying these obsolete buildings, ripping them down, and building better structures in their place. Am not arguing that all development is sensitive / good… there’s plenty of junk being built. But, by and large, I’d prefer to bet on the profit motive forcing developers to build densely, which is the most important thing for making our city more affordable / walkable.

So, you might ask, why does a 30 day delay matter?

The answer is that it introduces additional uncertainty into the development business. Now, instead of closing on a property, getting plans approved, and ripping the existing structure down, you’re going to need to run this 30 day gauntlet with your fingers crossed, hoping that some wacko isn’t going to start a campaign to save it.

When you add uncertainty to development projects, you force the developer to demand more profit in order to run the risk of building. The main ways to build in more profit are to buy the land for less (hurting the existing owner) or else sell / rent the resulting new structure for more (driving up housing / business costs).

Now, I’m not arguing against the idea of historical preservation. There are clearly some exceptional buildings that we’d like to keep around in our city. And, if the city is doing its job, then those buildings should be on historical preservation lists where you can’t pull any demo permits, ever.

But it’s patently absurd to make delay ALL development so that we can avoid maybe losing some marginal structures that aren’t actually important enough to be designated as landmarks. Not very smart.

(For what it’s worth, here’s my prediction: Developers will start asking sellers to post notices and then pull demo permits prior to removing contingencies on acquisitions of properties with “historical” structures. This way, it will become the seller’s problem, rather than the buyer’s.)