The Real Opportunity
I double-checked my hunch with this AI by uploading the 35 neighborhoods and asking, “Do HPOZ neighborhoods outperform their non-HPOZ neighbors in appreciation.” They mostly do.
This is not huge news to anyone. HPOZs have character and owners who care about their neighborhood. Properties can get Mills Act and reduce their taxes, among other benefits.
But here’s an idea that got me excited: If HPOZs are a proxy for—and a rough, data-based match for—upcoming rapid appreciation, then let’s look to buy or invest in HPOZs early in the process, ideally before they are designated.
Are there proposed or pending neighborhood HPOZs that we could get into early?
Turns out: no.
There's two reasons why.
First, HPOZs stopped getting approved years ago - the last batch was in 2018 (Carthay, Oxford, and Sunset Square). Most owners now think the restrictions hurt more than they help. Case in point: the proposed Westwood zone got shot down after "vocal opposition from property owners."
Second, new HPOZ designations are currently prohibited under the city attorney's interpretation of the Housing Crisis Act of 2019, which banned "subjective design standards." That's until 2030 (when my wife will likely lead the charge on designating Los Feliz to take down our Bobby Fischer-loving neighbor).
