Why? “The department’s report noted that it had received about 3,000 comments addressing the status of single-family neighborhoods in the rezoning plan, with more than three-fourths opposed to making changes.”
Yup. Homeowners are organized, and they mostly don’t like apartments getting built on their streets. Homeowners like to see their values go up and stay up.
Constrained supply is gas on the fire of appreciation.
Direct quote from a podcast this morning: “What real estate investors love about California is the incredibly distorted supply-demand dynamics.”
Translation: the housing shortage is profitable for real estate owners, and really profitable for homeowners. L.A. is not building any more single-family homes, and those neighborhoods that do have them will remain exclusive clubs.
An investor friend of mine made a good point: “I have a house in Silver Lake with four units behind it. If the four units burned down, I’d keep the insurance money. Then, I'd sell the house. The house alone is worth more than a five-unit building.”
I’ve talked about houses going up with inflation, but it’s not entirely true. Inflation is defined as “a rise in the general level of all prices.” Though inflation helps, the exponential rise of home values isn't only because of that.
Houses are more and more valuable each year because we didn’t build enough of them, and never will, and homeowners will always vote to keep it that way.
Supply is more important than demand, but L.A. has none of the former, and unlimited of the latter. I’m starting to repeat myself, but houses are gold, and if you can (and you can with a plan) get one anywhere in Southern California. Your kids will thank you.
