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Report From La La Land: The Dodgers, Astros and the ULI Conference

LAX airport in Los Angeles. Photo Credit: Ralph Bivins, Realty News Report.

LOS ANGELES – (By Ralph Bivins, Realty News Report) – “You here for the World Series?” the Uber driver asked me as he guided the car in bumper-to-bumper traffic to Downtown Los Angeles from the airport. “You must be rootin’ for the Astros,” he added, “since you look like a guy from Houston.  Well, sit back and relax.  Traffic is far worse here than in Houston.”

My driver was right. By the time we arrived at my hotel in La La Land, I could have driven to Intercontinental Airport twice — during Houston rush hour.

One of the reasons for the traffic congestion might have been that Los Angeles is the site of the 2017 World Series — the 113th edition of Major League Baseball’s championship series, a best-of-seven playoff between the National League’s Los Angeles Dodgers and the American League champion Houston Astros.

The city is also hosting the Fall Meeting of the Urban Land Institute, a Washington, D. C. -based nonprofit that provides leadership in the responsible use of land and in creating and sustaining thriving communities worldwide.

So comparisons between the nation’s two largest metropolitan areas is inevitable, particularly real estate. John Burns, chief executive of John Burns Real Estate Consulting of Irvine Calif., Tuesday compared the housing markets in LA and Houston, identifying three categories where Houston ‘wins,’ and three where Los Angeles ‘wins.’

“In population, Houston crushes LA in the growth category – 25 percent more people live in Houston today than 10 years ago, compared to only 5 percent more living in Los Angeles,” said Burns. “Houston also crushes LA when it comes to housing affordability. The median resale price in Houston is $232,000, compared to $605,000 in LA. We expect Houston to issue 44,500 building permits (including apartments) this year, more than double that issued in Los Angeles.”

However, Burns said, more than 10.1 million people now call LA home, compared to 6.9 million in Houston. “The typical LA household earns $64,000 per year, beating Houston by $3,000,” he added.  “Not only do LA households earn more, but their incomes have grown an average of 1.5 percent per year over the last decade, compared to only 1.2 percent in Houston.”

With strong economies and growing population growth, Los Angeles and Houston are more alike than residents of each city care to admit.  Both cities are car-centricity (maybe truck-centricity in the case of Houston) with increasingly diverse population.

Like Houston, LA is facing a lot of major challenges as 2017 comes to a close: transportation, homelessness and the growing pains that come with the continuing urbanization of the city.

The ULI Fall Meeting draws thousands to the Los Angeles Convention Center. Photo Credit: Ralph Bivins, Realty News Report.

It may be hard to believe, but traffic in Houston flows much better than traffic in the nation’s second largest city. Like Houston, Los Angeles is tackling its infamous traffic problem, said Los Angeles developer Drew Hild of development firm Highmark Advisors during the ULI Fall Meeting. “LA has always been a land of parking lots and that’s changing,” Hild said.

Like METRORail — the 23.8-mile light rail system in Houston — trains are becoming more relevant to the lives of Angelenos and a new line to west suburbs could be advancement into the future.

“People are actively trying to concentrate residential and services on those lines, making the car less necessary,” Hild said. “For years we had trains going to places people didn’t want to go.”

California developer Wayne Ratkovich of the Ratkovich Company notes there is a lot of substance to Los Angeles. “The city goes beyond Hollywood, goes beyond the La La Land image,” said Ratkovich after a ULI panel entitled: “Los Angeles: More Than La La Land.”

The commercial real estate market is thriving in Southern California, continued Ratkovich. “At the moment, the market is remarkably good,” he said. “Downtown Los Angeles is prospering. On the west side of town, rents are at a record high. The Hollywood neighborhood has never been in better shape. For so many years it was an embarrassment. But today it a pretty exciting urban center.”

Ratkovich noted the tech industry is prospering, as is entertainment “A lot of good things are happening,” he told Realty News Report. “Right now we are riding a pretty good wave.”

What’s the main concern of Los Angeles real estate today?

“Right now, the Dodgers,” joked Tim Wallace of Cushman & Wakefield’s downtown LA office.

With game time quickly approaching, Wallace may have been exactly right.

My bet’s on the Astros.

Oct. 25, 2017 Realty News Report Copyright 2017

 

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