Driving through Los Angeles all the time (though I don’t live there, but I travel to it often enough for family/event) it’s shocking to see the amount of dilapidated commercial buildings or even commercial buildings that seem entirely abandoned with absolutely no sign of life and boarded up windows even within walking distance of major venues like the Staples Center and Dodger Stadium.
I was wondering since rent is super high in Los Angeles but also parking, if it’s a zoning issue where somebody can’t just put up apartments or a parking structure, or maybe the people who owned the land the building is on top of are just waiting for somebody to buy them out at a high price.
There’s typically a lot of interlocking factors and contributing causes, so no simple answer.
Some may be holding out to make bigger money in some future wave of development. Some owners may have unrealistic expectations for the future of their block or the rental market for their space; other properties may be controlled by heirs or absentee owners who don’t want to give the matter much attention. The zoning (not as easy to change in LA as other cities) may allow only industrial uses for which there’s not much demand, or may not allow surface parking lots.
I frequently talk with people who are baffled that a nice-looking fully-leased old building will get torn down for development while a vacant lot across the street just sits there for decades. But real cities are a lot more complex than SimCity: redevelopment suffers from a lot of inertia and friction and imperfect information.
I don’t drive around LA as much as I used to, but if there’s a particular block or section of a street you want me to offer a theory on, I’ll try.
I always wonder why that happens too, and not just in Los Angeles.
Have you visited Berkeley, CA lately? The whole downtown district, once a vibrant commercial neighborhood, is largely a wasteland now. Yet there is whole new development, commercial and residential, just a couple miles north on the same main boulevard.
What I never understand is, presumably, the vacant building is still paying property taxes.
Why would anyone leave a drain on their income open like that for years on end?
It reminds me of the old post office building in Chicago (used in the opening sequence of “Batman Begins”). It is a HUGE building that sat there for many, many years (decades?) unused. It has finally been redeveloped and is starting to take new tenants but still…who on earth would want to pay property taxes on that place for 20+ years with zero income? Are they really thinking some day will come to sell it that makes all that money back and then some?
At a time when property values are rising, some developers/speculators will leave places empty, content to sit on an asset with a rising value.
It has been a problem in the UK, where empty property used to be exempt from local taxes, but these days they only have six month’s grace. There was a fairly notorious case in Birmingham where a developer took the roofs of some buildings to avoid taxes
Sometimes taxes aren’t being paid. Then the city takes over. Then the city was a deteriorating property they try for decades to get someone to buy and do something with.
A few years ago, I was in Las Vegas, and there were the giant casino properties, but also completely undeveloped blocks very nearby. So it’s not like a highly urban city like Manhattan, where virtually every block is developed, mostly at very high density.
This Detroit central train station stayed a vacant eyesore for decades due to a fight between a billionaire wanting to build a new bridge to Canada (he already owned one) and the city of Detroit and the State of Michigan. He left it that way out of spite. He finally sold it to Ford just before he died.
That can get complicated as well. There was a situation when I was living in downstate New York. It involved a bridge not a building but the same principles apply. A man had bought a bridge; I believe for the purpose of demolishing it and selling the metal as scrap. But he apparently didn’t have the funds to pay for the demolishing. Or to pay the taxes. He essentially abandoned the property but he was still its legal owner.
This was complicated by the man not living in the area and not having any official contact information after the purchase. The government wanted something done with the bridge but the legal proceedings took years; they had to post public notices asking the man to show up at hearings.
And while this process took years before the government was able to seize the property for unpaid taxes (and then tear the bridge down) this was actually actively being pursued. The bridge spanned the Hudson river and was seen as a serious danger of collapse. If this had been an empty building that posed no immediate threat, I can see how the government might not have bothered going to all this effort.
You haven’t been to Detroit lately have you. The real estate market is booming and the poor are being pushed out of their long established neighborhoods by gentrification. The neighborhood around that train station is a hot spot for nightlife now. Wasn’t like that 10 years ago, it was a like you describe back then.
What is strange is that people are buying up those old vacant buildings and turning them into loft style homes with serval owners having an interest. It’s tying up land that could be used for new buildings. There is one investor who refused to sell his property and they built the new sports complex around him.
I remember several decades ago visiting Atlantic City, New Jersey, where there was a giant casino hotel built behind and around a tiny little house of someone who refused to sell out.
Sometimes the owner just dies and the property stays in limbo. Or the owner just walks away and it turns out to have toxic waste oozing out of them after years of being abandoned by the owners because they couldn’t afford to clean it up.
Walmart was known for leaving their old location vacant on purpose when they build a new site not far away. They did not want another store using their old spot. Maybe they quit doing that lately.
It’s a very interesting story. The original casino project was owned by Bob Guccione, but it was never completed; the later attempts to move the woman out of her her home were led by the guy who completed the development: Donald Trump.
