Curbed LA

Los Angeles - A home that served as a commercial music studio with living space was for sale in September 2018. With a beautiful skyline view of downtown Los Angeles and extremely high walkability score to the myriad of nightlife, restaurants, coffee shops on Sunset, this is a prime piece of real estate.

Zoned R2, the house could do with a second unit. Purchased no more than a decade before, the land has doubled in value. The home does have unpermitted additions along with a previously permitted addition that will need a new roof, new foundation, and subfloor. At 6700sqft on a hillside and 2300sqft interior, any addition we make will require additional permits and possible soil reports due to the property being on hillside.

Torcora partners with investors to acquire this property and expects entitlements, construction, and disposition to take approximately one year’s time.

Orange County, California - 4 years into the construction of the first agrihood in Southern California, The Ranch at Rancho Mission Viejo, is approximately 25% complete. The project has been ambitious, not just from a scale standpoint, but also from a community planning aspect.

What is an Agrihood? It loosely defined as a housing development centered around community farming. The first of its kind sprouted in Detroit with the goal of allowing its residents to grow its own food. The idea of this appeals to younger generations who have grown to be more health and eco conscious. However, planners and residents of agrihoods are also inspired by the communal atmosphere embodied by rural farming towns.

Many in our industry hype up this new style of living as a trend taking over the US. Let’s debunk this now. It is a new idea that is being implemented in its infancy. However, folks in their 20’s, 30’s and even 40’s overwhelmingly prefer agrihoods over golf course communities.

While the baby boomers were enamored by golf course communities, the demand for homes in golf course communities has drastically fallen over the last decade. Aside from being a status symbol, buyers prized the green space and views.

Apartments, townhouses, single family homes are all available in socal’s only agrihood. Pricing ranges from $400,000 to over $1m. There is a farm that is at the heart of each community. They have fruit trees, nut trees, toolsheds, composting sites, chicken coops, and other varieties of ranch style equipment. Outdoor activities are encouraged. Residents can subscribe to farming, farm-to-table cooking, and other types of activities.

Interested purchasing a home in an agrihood? Contact jason@torcora.com

Irvine, California - On May 24, 2016, Irvine City Council was presented with an update of Short-Term Rentals in Irvine. Though it was brought up at a normal meeting, there has been a significant increase of complaints regarding the impacts of short-term rental (STR) properties in residential neighborhoods.

The market for short term housing has not only increased in Irvine but also across the nation due to platforms such as Airbnb, HomeAway, and VRBO. Though it is still managed within the existing framework, the jump in complaints raises the issue for discussion. Currently short term rentals are defined as rental of a residence for 30 days or less. These terms are prohibited in residential zones unless considered a hotel/motel use.

For Irvine City’s fiscal year 14-15, the city received 6 complaints, up from one just two years before. For the fiscal year 2015-2016, the city received 62 short term rental complaints. Not only is the market growing, but the awareness of neighbors has also risen.

Across Orange County, there has already been programs or ordinances enforced in Newport Beach, Anaheim, Laguna Beach, etc. Traditionally, this is an ongoing issue in beachside communities where many visitors flock to during the summer time.

It does seem as though in Irvine, the supply for short term rentals still outstrips demand. It looks as though many of these Irvine homes have been empty or partially empty and homeowners are simply utilizing the new tools as ways to reduce their expenses. Whereas in beachside towns, demand continues to far outweigh supply.

Los Angeles, California - Before we shorten this discussion with a “buzzed” article, let’s define rent control. Rent control only applies to a small set of apartments in certain cities. The term may imply that rent never changes. However, it actually means stabilization - establishing a small percentage by which landlords can increase the rent every year. The term may refer to a list of ordinances, laws, regulations or just the general application. In Southern California, rent control or rent stabilization topics revolve around Los Angeles city.

1. Rental properties built on or before October 1, 1978

In 1978, the city of Los Angeles signed its first Rent Stabilization Ordinance(RSO). The goal was to reduce vacancy rates due to a lack of adequate “decent, safe, and sanitary housing.” The vacancy rate at that time was approximate 3.8%. The RSO regulated apartments, condos, townhomes, duplexes, multifamilies, mobile homes, etc.

Update: LA city simplifies RSO residences with an online tool. However, it may not apply to all units within the same building.

2. Tenants’ Rent Protections

Rents may not be increased to market rate unless tenant moves out, does not pay rent, is evicted, violated lease agreement, evicted for non compliance to city ordinances, or accepts a Tenant Buyout Agreement. Without further review by the city of Los Angeles, rents may be increased up to 3% per 12 months. A few surcharges for registration, smoke alarms, etc are allowed but these make little difference. There are certain improvements to the property that allow owners to increase rent. However, they require board approval. Under the Capital Improvement Program, additional benefits that last 5 years or more could apply. Seismic retrofitting or removal of hazardous materials also apply. Any violations or overcharges will come under the authority of the Rent Stabilization Board where tenants may file complaints. Under extreme conditions, the city has the ability to take ownership over the building.

3. Tenants’ Eviction Protections

There are only 12 reasons listed by the city that allows a landlord to evict a tenant. If you have ever evicted had to evict tenant you will know the process from the first day of unpaid rent to the moment the sheriff is legally and physically onsite to do so is approximately 4-6 months.

• Failure to pay rent

• Failure to fix or address a violation of the rental agreement

• Creating a nuisance or causing damage to the rental unit

• Using the rental unit for an illegal purpose

• Failure to renew a similar rental agreement

• Failure to provide the landlord reasonable access to the rental unit

• The person at the end of the lease term is a subtenant not approved by the landlord

• The owner, or immediate family member will move into the rental unit

• A resident manager will move into the rental unit

• Demolition and permanent removal from the rental market

• Government order

• Conversion to affordable housing

4. The Arguments For and Against

In a free market economy, rates will rise if there is more demand than supply. The majority of economists argue against rent control and point to the fact that there just aren’t enough homes where people want to live. Those for rent control also have valid points rooted in morality, culture, and community. Gentrification is just a nice way of saying displacement. Without an excess of housing in areas people want to live, pricing is sure to continue rising. This will be an on-going issue for decades to come.