10 responses to “New Classical Architecture in Pasadena.”

1. 

   Wad

   February 17, 2006

   Slightlyslack wrote:
   “(Genevieve Giuliano is my PhD advisor, so I’ve had to learn a decent amount about travel demand.)”

   I am not very familiar with Dr. Giuliano. How is she relative to her colleagues? A few professors at that particular USC college have given it a reputation for being a Libertarian madrassa of sorts.

   “You could drop Atlanta’s freeway system onto Fargo and you would never come anywhere near the system’s capacity, even at the peak 5 minutes of traffic density every afternoon.”

   But … you cannot, unless the city of Fargo is so economically depresses that they’d have to add that capacity as a make-work project.

   Atlanta and Fargo serve very different functions in their state’s, the country’s, and the world’s economies.

   When I referenced the gas theory, I meant an area like Atlanta or L.A., where it would not be possible to “build out” of congestion because of such things like induced demand and incidents that would bog down traffic.

   “The difficulty in increasing housing supply around here through formal means (=construction) means that it goes up through informal ones: namely, more people in a unit. Santa Ana doesn’t have much in the way of apartment buildings, but it still has a high population density in the aggregate, mainly because people live 10 to a house. (Gustavo Arellano of the OC Weekly is always talking about “5 laborers from Guerrero living in what used to be a child’s bedroom.”)”

   It doesn’t all boil down simply to economics. Politics, and even sociology, play important roles as well. Certain people will oppose higher densities because they’ll attract lower-income, darker-skinned residents to the neighborhood, regardless of the economic value of construction. One of the more recent, disgusting examples, was in Mission Viejo (or an adjacent South Orange County city) where residents were up in arms over the city’s plan to build workforce housing for teachers, firemen and policemen. These were city workers and the residents reacted in a fit of modern-day blockbusting.

   You would have to decree a fiat that says such behaviors must be overruled if there’s an economic imperative. Otherwise, we have to plan around petulant homeowners.

   “People who flip housing generally rent it out, though, in order to offset the cost of the mortgage. (Flippers often rent out at or below cost, which actually keeps rents down.) Speculation in any commodity, be it bungalows or (pork) bellies, does not impact real supplies.”
   Speculation is different from trade, though. Flippers and speculators buy to resell what they have to another party at a higher price and let them assume the risk. Flippers don’t intend to be landlords.

   Speculation does not impact supplies but it does impact prices, since all prices ultimately have to be borne down the consumption chain. It’s what happens with the speculative capital that determines supply. Speculators do not produce anything. They don’t have to.

   Consumers care more about what they can afford than what’s available. Look at the real estate classified ads or all the ads in newspapers and billboards. There’s always housing available. It’s just that it’s too damn expensive to buy, unless you earn a six- or seven-figure salary or you have lenders willing to give out loans like they were Skittles.

   Remember that the demand market is not just homeowners, but also speculators who use the home for other purposes.

   ” “Location, location, location” is why even the most dreadful 1BR in a 1950s dingbat box in Westwood rents for the same amount per month as a 2BR Craftsman bungalow in Watts or East Los. Except for those fortunate enough to get in new-build subsidized housing, poor people don’t live in brand-new apartment buildings, anyway; they live in the oldest, lowest-value housing. Remember: buildings tend to depreciate, no matter the price of the land under them.”

   Buildings are separate from land, but function from them. Land prices will always command a premium, even in the most high-crime, economically depressed neighborhoods. Otherwise, you can buy several properties dirt-cheap in South Central and build yourself a heavily fortified mansion if you wanted to. At least your housing problem will be solved.

   Otherwise, again this is sociological rather than economical. There is an economical aspect, but it’s lost on anyone who has not had an exposure to Marx.

   (Disclaimer: Since I brought up the M word, let me say that I am not a Marxist, and will not tolerate being painted as one. I have read it, and am bringing up an economic condition that he has argued.)

   Marx, in his condemation of capitalism, brought up the point of the “lumpen” class. These are the people that are so poor that their survival depends on illegitimate, and illegal, means of economic activity. These are charlatans, prostitutes and professional criminals. The most depressed parts of South and East Los Angeles service the “lumpen” economy. The class is both the suppliers and the consumers.

   The Latino communities are often the points of entry, where many illegal immigrants reside. Some will earn money under the table, as maids, day laborers and street vendors. They’ll live in slums, renting from slumlords who are often foreigners themselves.

   There is a tacit covenant between the slumlord and the “lumpen” residents. The slumlord will tolerate his tenancy and command a very high rent, knowing that legitimate landlords would not deal with them. The tenants will tolerate squalor because they know that they have this, which is pretty bad, or something else which can be much worse.

   It’s very hard to gentrify the area because legitimate businesses would not want to be tarred by association, and that if reformers come in, they obstruct the covenant and create more problems for the one that they solved.

   So it’s much more complex than saying that a Westside residence costs more than a slum in South or East Los Angeles. Most of the residents in South or East Los Angeles work in the Westside anyway, and would like to live there. Heck, a low-income Latino tenant can say that he/she could find 9 other families to pool the rent for a $1,500 studio. The landlord would balk in a heartbeat. They can refuse to not lease to minorities; they just can’t say that outright.

   “No, but we’re not talking about the price of land; we’re talking about the price of housing. Higher land prices mean more housing units being built anyway.”
   They are not the same but are closely related. Land price determines housing price, since all costs are going to be borne by consumers. There’s also the value theory of land (land becomes more valuable at the end of the consumption chain; FAM has the lowest values and housing has the highest).

   If a developer sees a parking lot at a supermarket in the Palos Verdes Peninsula and thinks that he/she could make money building condos on it, that has added to the housing supply without bringing down prices. Why? Parking is free at the market, and it’s only there to get people to shop in the store, so it’s not producing money for the market. It will still be expensive to develop the lot, because the land prices are high. The condos’ sale price will resemble something close to what a mansion gets on the Peninsula.

   If there is a reasonable chance of success for this project, this fuels waves of speculation, which in turn helps keep housing prices high, even though supplies are added.

   Housing supply is not the issue. Housing is not as finite as the land underneath it. Even if we eliminated density restrictions and made movement more efficient by reducing personal automobile usage, it would open up more opportunities for housing. It would also open up more opportunities for speculation, which adds to prices.

   Prices begin to drop when speculation falls off or populations decline. These are not necessarily the same thing; the former happened in the Antelope Valley a decade ago, and the latter is happening in places like Detroit, Pittsburgh and St. Louis.

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2. 

   slightlyslack

   February 17, 2006

   Once supply is added, not only will people in the area look to move into different neighborhoods, but then people from other areas would want to move here now that there is so much more available housing. Think of the “gas theory of highway congestion,” where any added lanes on a crowded freeway will have no relief on existing traffic.

   The “gas theory” is wrong, though. (Genevieve Giuliano is my PhD advisor, so I’ve had to learn a decent amount about travel demand.) You could drop Atlanta’s freeway system onto Fargo and you would never come anywhere near the system’s capacity, even at the peak 5 minutes of traffic density every afternoon. Trip generation is solely a function of demand for travel; supply of capacity is a separate issue. People who talk about “induced demand” are mistaking increased quantity demanded–which occurs when the supply curve for any commodity, such as road space, is shifted outward from the origin–with increased demand. In the case of Fargo, the demand function for travel might be so inelastic (vertical) that the aforementioned massive supply increase would have virtually no impact on the amount of travel that actually occurred.

   Housing is the same way. From our perch on the West Coast, it’s easy to forget that in the vast majority of the country, housing prices have not appreciated all that much. Sprawl is driven as much by policy as by economic demand, but at least sprawl-aiding policy allows for increases in the housing stock. In greater Los Angeles, population growth has outstripped the increase in urbanized land area since the 1970s.

   The difficulty in increasing housing supply around here through formal means (=construction) means that it goes up through informal ones: namely, more people in a unit. Santa Ana doesn’t have much in the way of apartment buildings, but it still has a high population density in the aggregate, mainly because people live 10 to a house. (Gustavo Arellano of the OC Weekly is always talking about “5 laborers from Guerrero living in what used to be a child’s bedroom.”)

   Second, people don’t just buy properties to live in them. Acquiring properties for speculative value is now commonplace. The more housing that comes online, the more open it is to “flipping.” Also, you would have to contend with REITs and corporate brokers.

   People who flip housing generally rent it out, though, in order to offset the cost of the mortgage. (Flippers often rent out at or below cost, which actually keeps rents down.) Speculation in any commodity, be it bungalows or (pork) bellies, does not impact real supplies.

   Third, older cities know that they would be losers. There will still be sprawl to exurbs, and older buildings would be converted under adaptive reuse. Cities are going to want to avoid “Lynwoodization,” where there is a rapid transformation from a higher income demographic to a lower one, and all of its aggregate problems. This happened in much of Southeast L.A. County as well as the San Gabriel Valley between the 10 and 60 freeways. The cities will do everything in their power to stop their decline, from buying up houses and taking them off the market to Kelo eminent domain.

   Sprawl to outer suburbs will always occur, sure, but economies of aggregation mean that proximity to high-value job centers means that underlying demand for housing near these centers will always remain strong so long as the centers themslves remain economically vigorous. Vacancy rates in pretty much every business district except Downtown Los Angeles and Wilshire Center are on the order of 5%, so it’s clear that places like Beverly Hills and Burbank are doing pretty well for themselves in spite of nasty congestion.

   The rapid transitions in social class that occurred in places like Lawndale, Norwalk, and Baldwin Park had a lot more to do with the decline of heavy industry in the ’70s and ’80s than with the construction of apartment buildings. (The collapse of the defense industry after 1990 was almost an afterthought.) High rates of single-family home ownership are no guarantor of socioeconomic stability: think Flint, Gary, or Birmingham, to name three largely 20th-century industrial cities that hitched themselves to a few huge employers that then hit the skids.

   “Location, location, location” is why even the most dreadful 1BR in a 1950s dingbat box in Westwood rents for the same amount per month as a 2BR Craftsman bungalow in Watts or East Los. Except for those fortunate enough to get in new-build subsidized housing, poor people don’t live in brand-new apartment buildings, anyway; they live in the oldest, lowest-value housing. Remember: buildings tend to depreciate, no matter the price of the land under them.

   Fourth, if L.A. was to go full-bore New Urbanist, keep in mind that land prices are already high now. Turning parking space into housing (or anything else productive) only realizes the latent value of the land. It doesn’t bring down the overall price of land.

   No, but we’re not talking about the price of land; we’re talking about the price of housing. Higher land prices mean more housing units being built anyway.

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3. 

   Wad

   February 16, 2006

   Slightlyslack wrote:
   “It’s pretty simple: add supply, and you’ll get downward pressure on prices. Prices will stop rising when enough supply is added.”

   But, it’s not that simple. There are so many variables thrown into the supply-demand mix.

   The only sure way land prices go down is if the population is declining. You can get a good price on a home in much of Michigan and Ohio, St. Louis and Pittsburgh. They’re all seeing job and population declines.

   When you have an area like L.A., you have a situation where the price of land is stratospheric. There is no land shortage, just wasteful land usage. Once you add supply, will prices come down? I’d guess no.

   Once supply is added, not only will people in the area look to move into different neighborhoods, but then people from other areas would want to move here now that there is so much more available housing. Think of the “gas theory of highway congestion,” where any added lanes on a crowded freeway will have no relief on existing traffic.

   Second, people don’t just buy properties to live in them. Acquiring properties for speculative value is now commonplace. The more housing that comes online, the more open it is to “flipping.” Also, you would have to contend with REITs and corporate brokers.

   Third, older cities know that they would be losers. There will still be sprawl to exurbs, and older buildings would be converted under adaptive reuse. Cities are going to want to avoid “Lynwoodization,” where there is a rapid transformation from a higher income demographic to a lower one, and all of its aggregate problems. This happened in much of Southeast L.A. County as well as the San Gabriel Valley between the 10 and 60 freeways. The cities will do everything in their power to stop their decline, from buying up houses and taking them off the market to Kelo eminent domain.

   Fourth, if L.A. was to go full-bore New Urbanist, keep in mind that land prices are already high now. Turning parking space into housing (or anything else productive) only realizes the latent value of the land. It doesn’t bring down the overall price of land.

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4. 

   slightlyslack

   February 15, 2006

   Hey land use planner dude,

   The solution to affordable housing is pretty simple: up-zone all those precious single-family neighborhoods that the entire urban planning enterprise has so zealously nurtured for 75+ years. Dramatically reduce the number of historic preservation zones. Relax minimum parking and height requirements so that mixed-use development can occur along transit corridors. Shall I continue, or do you get the point?

   When I hear people complain about housing not being affordable, and then bitch and moan about “overdevelopment,” I want to smack them around until their cerebella come out their noses. It’s pretty simple: add supply, and you’ll get downward pressure on prices. Prices will stop rising when enough supply is added.

   Restrictive zoning laws are just subsidies to the property values of existing homeowners; affordable housing mandates are subsidies to the <10% of the population (un)lucky enough to get in on the action. Why distort the market with offsetting subsidies, when you could get the same results so much more cheaply by giving out bigger Section 8 vouchers and making it harder for landlords to opt out?

   –An urban economist

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5. 

   Wad

   February 15, 2006

   I’ll try to answer Percival’s questions with some of my own perspectives and experiences:

   “Why it is that none of these residences will be offered at a price point accessible to the median household income in Los Angeles?”

   Because the price of land is astronomical. Why is it so? Southern California wants to be car-friendly. We waste a lot of land for unproductive cars (parking). You could get more productivity from any other land use.

   And, the only solution to your problem right now would be socialism. Governments would have to be major players in acquiring land and setting price according to social needs. Singapore, not known for its Scandanavian Socialist Democracy, is the largest land-owner on the island. Almost 85% of Singapore’s residents are tenants of the government.

   “Has their ever been a New Urbanist project that has either an affordable or workforce housing component that was not mandated?”

   No, because that mandated housing is undesirable to the market.

   Much of the right likes to uphold markets, or “the” free market, as achieving social equality without laws. What is omitted, of course, is that there’s a caste system of marketing in society. The highest income whites, aged 18-49, are at the top of the caste. Low-income blacks are at the bottom.

   “Urban enviroments are chaotic. This project is gated and set upon a hill next to a cul-de-sac and will be tucked behind a gate. Should this project be renamed to New Suburbanist.”

   This is the fine American tradition of experience-selling. Americans don’t desire authenticity, they settle for buying into the experience of a community they were not part of. Las Vegas is the crystallization of this mentality. People will pay big money to live in a New Urbanist home even though they are protected from real urbanism.

   “If M&P are really talented, could they not replicate this project in an urban environment with a construction cost of less than $150 – $200 per square foot? Or does New Urbanism feed and placate to an audience that starts at $400 per square foot and higher?”

   Yes it does, for the caste system of marketing as I described above. If M&P built a project like this and 100 yuppies moved in, it’s the Next Big Thing. Conversely, if M&P built a project like this and 100 poor black families with Section 8 vouchers moved in, it’s Ghetto.

   “By trade I’m a land use planner and I truly question this packaging now being sold has ‘new urbanism.’ “
   New urbanism is in part a reaction to the status quo that produced and reproduced the suburban land use system America made its own. If you really think about it, “new urbanism” is an oxymoron. It’s not new at all. It’s very reactionary, seeking to move us back to before World War II, where land uses were distinctly urban and rural.

   Is that inherently bad on its own? I’d say no. America has a “throw the baby out with the bath water” culture. A new idea catches on, and soon enough it becomes the only game in town. It’s scary to think that Vons and Ralphs, which can trace their existence back to long before the automobile, cannot build in urban areas without parking moats because they don’t know how to make such a project work. This is why it has taken Ralphs over a decade to open a store in downtown L.A. (The store is under construction and is set to open this fall or next spring.)

   The post-war suburbanism happened for a variety of factors: The U.S. made a ton of money during World War II and the banks sought to capitalize on that wealth through home loans. Also, social theorists of the time saw suburbia as a cure for then-modern problems and designed the suburban form. It was also designed to fulfill the prerogatives of the military and political classes. They saw urbanism as a Petri dish for communism and socialism, and wanted to stamp out virulent ideologies through design.

   Suburbia has led to its own problems, which the New Urbanists are trying to correct by reintroducing elements of an older time that would work now. We’re seeing a classic battle of the Establishment versus the Young Turks. Regardless of which side wins, the suburban Establishment must know that if it defeats New Urbanism, another movement will rise up against it and be a much more formidable adversary because it knows of the Establishment’s weaknesses and what pitfalls to avoid that led to the New Urbanists’ downfall. If the New Urbanists win, they are now the establishment and must now defend their position against other radicals and possibly New Suburbanist reactionaries.

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6. 

   Andrew

   February 15, 2006

   Percival House: Your points are well taken. There is a pressing social need for low cost housing throughout LA. It is not just the form of “new urbanism” that matters but the function of it.

   But architects and their firms cannot take on the entire responsibility to provide affordable housing when so much of the costs are out of their control. M & P is talented, but their talents do not extend to remaking the entire political system of the US which currently does a poor job of providing for the poor (see New Orleans).

   As a land planner you must also be interested in expanding the opportunities to provide housing by freeing us from constraining laws and zoning ordinances that “mandate” set asides. If more housing were built in Los Angeles, the price would drop, but we are hampered by excessive regulations and laws that inhibit development and ultimately harm all of us, rich and poor.

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7. 

   Percival House

   February 15, 2006

   Well,
   Thank you for your contribution on New Urbanist perspectives, but I challenge you to not merely laud, but to also question what is on offer:

   Why it is that none of these residences will be offered at a price point accessible to the median household income in Los Angeles?

   Has their ever been a New Urbanist project that has either an affordable or workforce housing component that was not mandated?

   This project has been slathered with a dose of ‘historicalness.’ But whose history is being highlighted? The guests of the former hotel or those who could not afford (or were allowed) to stay the night?

   Since the City of Pasadena has an inclusionary housing ordinance, did the project provide on-site affordable units? If not, is it because the future tenants would ‘mind’ the neighbors?

   How Urbanist is the project if you (a) each unit has a two car garage, and (b) the tenants are still car dependent for local items?

   Urban enviroments are chaotic. This project is gated and set upon a hill next to a cul-de-sac and will be tucked behind a gate. Should this project be renamed to New Suburbanist.

   If M&P are really talented, could they not replicate this project in an urban environment with a construction cost of less than $150 – $200 per square foot? Or does New Urbanism feed and placate to an audience that starts at $400 per square foot and higher?

   By trade I’m a land use planner and I truly question this packaging now being sold has ‘new urbanism.’

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8. 

   Andrew

   February 11, 2006

   Thanks Ubrayj. I will do that.

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9. 

   ubrayj02

   February 11, 2006

   If you’re looking for a jolt of modernism, check out 141 S. Hudson Street in Pasadena. It’s been under construction for over a year, and is due to be finished in March. I walked the perimeter of the building – and though it doesn’t include the wisdom ofthe ancients, it is a really cool structure.

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10. 

    slightlyslack

    February 8, 2006

    New Urbanist projects generally fail to incorporate existing structures (in spite of the movement’s emphasis on doing just that), so this is a welcome development.

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