L.A.’s Going Broke over Development
Not enough money for schools.
Not enough money for police, or librarians or park staff.
Not enough money for street and sidewalk repairs.
L.A.’s residents are seeing important services being cut back.
The city is hundreds of millions of dollars behind, soon to be billions and the city employees are facing layoffs and dozens of furlough days in their futures.
This month the neighborhood council I sat on voted to advise the council office and the Zoning administrator that they would like another 135 apartment units at Playa Manchester. These units sit next to the 535 units at Playa del Oro they approved back in 2000 here in Westchester. Last year they approved over 2000 units for Phase II of Playa Vista along with another 500+ units at the Hughes Center.
There is a connection here that’s apparently it’s too far under the radar for most decision makers (including neighborhood council members) to recognize and that is the fact that these high density multi-story apartment units are growing in numbers at a rate of 2 to 3 times that of single-family units and they pay only $600 to $1300 per unit in annual property taxes compared to SFU’s that are billed ten times that amount. Is it any wonder to the mayor, the city council and this neighborhood council why the city is broke?? The discounted property income to the city that high density, vertically built mixed housing generate simply isn’t enough to cover of public services needed for the number of residents they add to the city.
For example, it costs taxpayers over $9000 annually just to pay for a single student’s public education in the LAUSD. At $900 per commercial housing unit it takes 10 units to pay for a single child. On the otherhand it only takes 2 single family homes to pay for the same student.
Pile on top of that the hundreds of millions of dollars that are needed for police, fire, libraries, parks, pot hole repairs, street surfacing, refuse pickup, payrolls for council members and their staff, planning department staff, building and safety, Department of Transportation staff, neighborhood council budgets… and need I say ‘pensions’ (i.e. the hidden payroll) of retiring government employees? By now it should be clear, for every unit built in a multi-unit project the city falls farther and farther behind.
The folks that are getting rich are the operators and developers of these increasingly large, increasingly dense and ever taller housing complexes that are invading cities everywhere in the Southern California region but mostly here in Los Angeles.
Even when the economy turns itself around there should be no doubt that our city will continue to fall farther in arrears since property tax receipts are no longer driven by the properties, but instead slowed by housing units which are growing at record rates.
$600 per unit? Cite, please.
Multifamily construction like Playa del Oro pencils out at about $300K/unit average. At LA City/LAUSD property tax rates of 1.2%, that’s more like $3600 per unit.
And that’s before the gross receipts taxes, business licenses, sprinkler system and other taxes placed by the city.
Cite? Sure….
According to the Los Angeles County Tax Assessor’s office, the property where Playa del Oro is located at had a property tax assessment of $374,395 in 2009. Take that figure and divide it by the number of units (550) and you have $699 per unit. That’s their big contribution to schools, libraries, streets, and people employed by the city including police, fire, and city staff. The $374K assessment implies that the units are valued well under $300K value per unit that you cite. The other tax streams you mention make little in-roads into equalizing the difference. Really pennies on the dollar.
Unlike most other cities, Los Angeles is upside down in the ratio of single-family units and mulit-family units. In the City of Los Angeles multi-family units outnumber single-family units by 778,686 to 620,193 according the California Department of Finance. As long as the disparity between multi-family and single family units continues to widen (And it will. Future growth is vertical since there is few developable parcels left) the City of Los Angeles will continue to fall deeper into bankruptcy.