Who Wants to Buy the Most Expensive House in America?
One man is building a house so enormous, and so absurdly lavish, that it may be the ultimate symbol of our age of thirst, excess and inequality. Asking price? $500 million.
How Venice Became the Most Expensive Neighborhood in Los Angeles
Over the course of just a couple of years, Venice has become one of the most expensive neighborhoods in Los Angeles. According to the real estate website Zillow, it is the seventh most expensive neighborhood in which to buy a house, its median home value — $1,578,200 — coming in just behind the Hollywood Hills and just ahead of Beverlywood. According to ApartmentList.com, the average rental price of a two-bedroom apartment in Venice is $4,900 a month — well ahead of Westwood, Santa Monica, Brentwood, even Bel-Air and the Hollywood Hills — bested only by the Pacific Palisades and Beverly Glen.
Venice has always been an odd mix, a low-rise neighborhood of tiny parcels, canals and slender walk streets. There's the boardwalk, but there's also Oakwood, nicknamed Ghost Town, which until recently was dominated by gang violence and open-air drug markets. It was never cheap. But when my parents moved there in the 1970s, it was affordable — as affordable as living by the beach got, at any rate.
But that has all changed. Venice is now more than just a beach town, more than just a tourist attraction. Venice is a brand. Or as Ernest, a man I met outside the Oakwood Community Center (he smoked a hand-rolled cigarette and declined to give me his last name), puts it: "This used to be a community. Now it's a business."
Solo Scott, a surfer-turned–real estate agent (a sort of human synecdoche for his hometown itself), recalls: "When I was a kid, Abbot Kinney was still a scary street. You wouldn't walk down there at night.
"The change for me was about four or five years ago. I was getting a cup of coffee at Intelligentsia, and I saw an old lady in her mid-70s, in the middle of the street stopping traffic, holding these big shopping bags. A well-heeled lady, with like a Louis Vuitton purse or something. It could've been Rodeo Drive. It could've been the Champs-Élysées.
"And I said, 'Holy shit, there goes the neighborhood.'"
So how did Venice become Beverly Hills by the sea?
Joint Statement from California Legislative Leaders on Result of Presidential Election
SACRAMENTO – California Senate President pro Tempore Kevin de León (D-Los Angeles) and California Assembly Speaker Anthony Rendon (D-Paramount) released the following statement on the results of the President election:
Today, we woke up feeling like strangers in a foreign land, because yesterday Americans expressed their views on a pluralistic and democratic society that are clearly inconsistent with the values of the people of California.
We have never been more proud to be Californians.
By a margin in the millions, Californians overwhelmingly rejected politics fueled by resentment, bigotry, and misogyny.
The largest state of the union and the strongest driver of our nation’s economy has shown it has its surest conscience as well.
California is – and must always be – a refuge of justice and opportunity for people of all walks, talks, ages and aspirations – regardless of how you look, where you live, what language you speak, or who you love.
California has long set an example for other states to follow. And California will defend its people and our progress. We are not going to allow one election to reverse generations of progress at the height of our historic diversity, scientific advancement, economic output, and sense of global responsibility.
We will be reaching out to federal, state and local officials to evaluate how a Trump Presidency will potentially impact federal funding of ongoing state programs, job-creating investments reliant on foreign trade, and federal enforcement of laws affecting the rights of people living in our state. We will maximize the time during the presidential transition to defend our accomplishments using every tool at our disposal.
While Donald Trump may have won the presidency, he hasn’t changed our values. America is greater than any one man or party. We will not be dragged back into the past. We will lead the resistance to any effort that would shred our social fabric or our Constitution.
California was not a part of this nation when its history began, but we are clearly now the keeper of its future.
LA housing market a safe bet, despite rising prices, report says
What may feel like a real estate bubble in Los Angeles — with all-cash offers and frenzied bidding wars — is actually the midpoint of a steady housing market recovery, analysts say.
The UCLA Anderson Forecast released Monday said L.A. is only three years into a rebound that started in 2012. Home prices have since climbed 27 percent. History suggests there will be four more years of price increases and home values will go up another 35 percent before there is any sort of correction.
The reason comes down to a fundamental imbalance: there’s lots of job growth, but because of strict building and environmental regulations, there will be very little increase in the housing supply.
“That means you will not expect to see housing more affordable during the next few years," said Jerry Nickelsburg, a Senior Economist at UCLA's Anderson Forecast. "In fact, just the opposite.”
While entering the market is tough, buying a home right now in Los Angeles isn't as risky as the high prices make it feel, the report said.
"L.A.’s housing market, despite becoming more expensive and unaffordable, is not in a bubble." UCLA economist William Yu wrote. "The current rise in home prices seems to be driven by rising effective demand and limited supply, not by speculation. Therefore, the housing bubble burst we experienced several years ago is unlikely to haunt us this year or next, and the smart money will continue to invest here."
That includes Chinese buyers, who have been bidding up Los Angeles houses in recent years.
Though the Chinese economy has recently slowed, Yu doesn't expect the downturn there to impact prices here. Yu said China's economic problems could actually raise home prices in Southern California as investors seek stability outside their country.
"With the dismal outlook and uncertainties in China, contrasted with the promising and stable outlook in the U.S., it is wise to reallocate money from China to the U.S.," he wrote in the report. "Even with the negative wealth effect generated from China’s deflating real estate, tumbling stock markets, and 3 percent currency devaluation, wealthy Chinese individuals still have sufficient equity to make a move."
Other industries, he said, like tourism and trade, could suffer.
A Mansion, a Shell Company and Resentment in Bel Air
New York Times, Dec 14, 2015
LOS ANGELES — The most notorious new house in Los Angeles hangs from a Bel Air hillside, high above the sprawl and smog, unfinished and unloved.
Outraged neighbors call it “the Starship Enterprise,” and in truth it looks like nothing so much as an earthbound space station of curved glass and steel, draped in scaffolding and tarpaulin, roughly 30,000 square feet and nearly 70 feet high.
That height, about twice the legal limit, is among a litany of violations that have stalled construction at 901 Strada Vecchia for more than a year. Without the city’s permission, workers tore down the original house and leveled the hillside. Though the site is in an “earthquake-induced landslide area,” subsequent inspections found “unsecured open excavations” and other perils. Inspectors also uncovered a host of features, unapproved though befitting a house with an aspirational price tag of $100 million, among them underground bedrooms and an IMAX theater.
As unapologetically extravagant as the project is its impresario —Mohamed Hadid, father of the celebrity models Gigi and Bella Hadid, sometime guest on “The Real Housewives of Beverly Hills” and one of the city’s leading luxury developers. For years, Mr. Hadid’s Instagram account has featured photos of himself amid the rebar at the Bel Air site. He calls it his “office” and labels the photos with the hashtag #themodernhouseofhadid.
“L.A., it’s the cheapest real estate in the world,” Mr. Hadid said, sipping tea during the interview at Le Belvédère, the 48,000-square-foot mansion where he lives in Bel Air. “London is more, New York is more.”
Chinese Cash Floods U.S. Real Estate Market
New York Times, Nov 28, 2015
Canyon Lake Ranch was once a playground for Christian day campers, and then was a corporate retreat with water-skiing, barbecues and cowboy shoot-’em-up shows. Hawks now circle above 108 sunbaked acres occupied by copperhead snakes, a few coyotes and the occasional construction truck.
Soon this ranch will be a gated subdivision of 99 mini-mansions designed for buyers from mainland China. The developer, Zhang Long, a Beijing businessman, is keeping three plots to build his own estate along the site of an old rodeo arena.
This luxury development 35 miles northwest of Dallas is the latest frontier in a global buying phenomenon as Chinese money becomes a major force in real estate around the world. The flood of money is likely to persist despite the current tumult in China. While a currency devaluation and stock market crash have crimped the country’s buying power overseas, the resulting uncertainty is making many Chinese individuals and companies eager to invest anywhere except their home country.
In London, Chinese investors are purchasing high-end apartments in wealthy neighborhoods and big skyscrapers in the financial district. In Canada, they are paying $1 million for modest Vancouver bungalows. In Australia, a Chinese sovereign wealth fund bought nine office towers, one of the biggest real estate transactions in that nation’s history.
In the United States, the home-buying spree began on the coasts, where Chinese buyers snapped up luxury condos in Manhattan and McMansions in Silicon Valley, pushing up home values in big cities. It is now spreading to the middle of the country, where prices are more modest and have room to run.
Los Angeles and Its Booming Creative Class Lures New Yorkers
New York Times, May 1, 2015
It started with Instagram. Or maybe it ended with Instagram. Last fall, Christina Turner, a fashion stylist in Brooklyn, was dreading another New York winter in her cramped, lightless Greenpoint, Brooklyn, apartment while gazing longingly at the succulent gardens and festive backyard dinner parties posted on social media by her friends in Los Angeles.
“I’d see all these old familiar faces of friends I once knew in New York, all seated at the same table,” said Ms. Turner, 32, who goes by the professional name Turner.
She could resent them, or she could join them. So in November, Ms. Turner dumped her furniture on Craigslist, piled into her battered Honda Accord and headed west, not stopping until she found a light-filled two-bedroom cottage in Echo Park, a neighborhood in eastern Los Angeles that is a magnet for young creatives.
Pieds-à-Terre Owners Dominate Some New York Buildings
From the New York times, Oct 24, 2014:
The question of who, if anyone, lives in the multimillion-dollar condominiums being built across Manhattan grows more intriguing with every new tower crane that hoists glass slabs and concrete blocks hundreds of feet into the sky.
New Yorkers want to know: Who are these people who hide behind limited liability companies while shelling out a fortune for a condominium — who see the apartment as an investment or even just a vanity play, and who are too busy sunning in St. Bart’s or skiing in Gstaad to actually show up and shop at the local market or pay for tickets to a Broadway show?
Many well-heeled New Yorkers are frustrated that while a large share of their income goes to taxes of all kinds, their non-New Yorker neighbors down the street pay a comparatively minuscule amount in property taxes. And an evening stroll through Midtown is starting to feel like the Wild West after the gold rush, with buildings like the Plaza — officially the Plaza Pied a Terre Hotel Condominiums — sitting mostly dark. It wouldn’t surprise some of us to see tumbleweed blow by the Apple cube on Fifth Avenue.
Indians Join the Wave of Investors in Condos and Homes in the U.S.
From the New York Times, Oct 1, 2014:
Arun Kumar owns three apartments in New Delhi, where he has carved out a comfortable life as part of India’s rapidly expanding middle class. Not long ago, he also became a global landlord, picking up an inexpensive three-bedroom house and a duplex nearly 8,000 miles away, in St. Louis.
For Mr. Kumar and other affluent Indians, American real estate is a security blanket. Faced with what some have considered a bubble in real estate prices in major Indian cities and a sometimes jittery Bombay Stock Exchange, they are joining a wave of buyers from other countries who see the recovering United States housing market as one of the best places to put their money these days.
The wealthy elite from China, Latin America and elsewhere have bought pieds-à-terre in glassy towers in Manhattan, luxury condos in Miami and homes along the West Coast. Law enforcement investigations have found that some foreign investors are using American real estate holdings, at least in part, to hide cash and other assets from authorities in their home country.
'Human Props' Stay in Luxury Homes But Live Live Ghosts
Super intersting article from the Tampa Bay Times, July 7, 2014:
When the Mueller family sits for dinner, the leftover broccoli and crepes are already wrapped in plastic, the kitchen is beyond spotless, and the rest of the home is so tucked-away tidy it looks like they just moved in. In a way, they have: Every inch of furnishing, every little trinket and votive candle, sits precisely as designers placed it five months ago. That would make them the most perfect suburban ideal, except for one catch: This isn't actually their home. Bob and Dareda Mueller and their three grown sons are, instead, part of an "elite group" of middle-class nomads who have agreed to an outlandish deal. They can live cheaply in this for-sale luxury home if it looks as if they never lived here at all.
The home must remain meticulously cleaned and preserved: the temperature precisely pleasant, the mirrors crystalline clear. If a prospective buyer wants to see the home, they must quickly disappear. And when the home sells, they must be gone for good, off to the next perfect place.
Wealthy Chinese home buyers boost suburban L.A. housing markets
From the LA Times Real Estate section, March 24, 2014:
Demand for L.A.-area homes among affluent Chinese are pushing prices past boom-era peaks, generating a subset of property brokers and mortgage lenders that cater to their distinct needs.