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Sunday, January 28, 2007

Take The Money And Run: Why L.A.'s Middle Class Is Leaving

Why is L.A.'s middle class leaving?

Joel Kotkin asserts today, in an essay in the L.A. Times, that "Working and middle-class families are moving out — and failing to move in — because they cannot afford a house here."

He does not, however, cite any kind of survey of people who have fled the city about their reasons for doing so. Rather, he notes merely that: i) middle class people cannot afford to buy homes here; and ii) middle class people are leaving. Therefore, he concludes, the former caused the latter: middle class people are leaving L.A. because they cannot afford to buy a home here.

This "reasoning" is what we in the logic trade call a "cum hoc ergo propter hoc" fallacy. Simply stated: just because two things happen at the same time doesn't mean one caused the other. Just because L.A.'s middle class cannot afford to buy a house here does not mean that's why they're leaving.

Consider another explanation for the massive flight of American citizens from L.A. and California, from a person with one foot out the door:

As a result of hundreds of thousands of illegal aliens having swarmed into Los Angeles -- maybe 1 million? -- it is no longer a nice place to live. On the contrary, increased population density, perpetually gridlocked traffic, abysmal schools, hundreds of murders annually, and a third-world ambience have transformed L.A. into a terrible place to live.

Nor is there any hope of improvement, because entrenched career politicians at the local, state and national level will clearly do nothing to stop the problem. Increased population density and decreased interest rates, moreover, have driven the price of real estate sky-high.

So if you're an American citizen who's owned real esate in L.A. for over six years, you have two choices: stay here and watch the city deteriorate even more, or "cash out" for a premium and move somewhere nice.

Think about it. If you bought a home for $500,000 in 2000 by, say, putting $100,000 down, and borrowing $400,000, you can make a small fortune by selling now that your house is worth $1 million. Indeed, by selling, you wouldn't just double your money, you would make a five-fold profit (i.e., your original $100,000 plus the $500,000 you net after paying off your $400,000 loan).

After you sell your property, you can't make any money by buying another home to live in here -- all prices having risen -- so you either stay and rent, or escape the unbearable city once and for all by moving away. That's what people are doing: voting with their feet. In other words, "TAKE THE MONEY AND RUN!"

Plus, if you have children, you'll probably save another $20,000 annually per child because you'll be able to send them to public schools wherever you move. Here in L.A., by contrast, parents who can afford private school tuition pay it to spare their children the nightmare known as "LAUSD."

State statistics show that hundreds of thousands of American citizens have been fleeing California each year for several years. Businesses, too, open factories not in California, but in states that welcome them.

So before any of you fall for the same "cum hoc ergo propter hoc" fallacy that Mr. Kotkin did, think about whether there is an alternative explanation.

When I, for one, flee this city, it won't be because I can't afford to live here, it will be because I can't stand to live here.

51 Comments:

Anonymous Anonymous said:

With this city in such a mess lacking leadership I've heard rumblings now would be the time for the Valley to try once again sessission. With Villaraigosa's weak leadership and do nothing attitude people believe the Valley can become its own place.

January 28, 2007 9:22 AM  

Blogger Walter Moore said:

Anyone who plans to stay here should, in my opinion, try to take over City Hall rather than form a new city. It would be much easier AND give you a greater ability to fix things.

January 28, 2007 9:51 AM  

Anonymous Anonymous said:

GOOD BLOGGIN MORNING WALTER,

Next to laptop is the Sunday's "LA ANTONIA TIMES". This Op-Ed plus Gregory Rodrigues opining on our Gang Problem do have a tie in. My friend's mom recently sold their house in Boyle Heights near "Blueberry Hill" and was able to buy a home in Highland Park off Ave. 64. Being hispanic my friend and his mom stated that the neighborhood in Boyle Heights had become too "Third World Like" for them after living their for over thirty years.
Now where I make the tie in with the Gregory Rodriguez Op-Ed is you have a large segment of middle class hispanics who should be the future brain trust in this city (Police, Fire, Public Servents, Small Business Owners) who are just as fed up with the "Ghettoization" of their old neighborhoods. If the powers to be were smart (Unlike "HIS POLLONESS" and his far left MeCHa Indoctrinated POLLONISTA followers) this Group of Hispanics should be the group that spearhead the renewal of areas such as Boyle Heights, Pico Union, Lincoln Heights and others.
In Summery, This demographic group will decide if Los Angeles will become in big barrio of cheap illegal labor, or, a vibrant city of urban renewal

FREEDOM AND FREE ENTERPRISE

"RED SPOT OF REASON IN CD 14"

January 28, 2007 10:17 AM  

Anonymous Anonymous said:

Yes! Moore is leaving L.A. - hope he moves to a town with less Jews and less intelligent people, he should do fine.

January 28, 2007 10:18 AM  

Blogger Walter Moore said:

Actually, as your comment illustrates, I don't think it would be possible to find a city with "less intelligent people." Perhaps you meant to say "fewer?"

January 28, 2007 10:30 AM  

Blogger Patrick Meighan said:

If I leave Los Angeles, it'll be because I can't afford to purchase a house in Los Angeles.

So now the score of your unscientific poll is 1 to 1.

Patrick Meighan
Los Angeles Greens

January 28, 2007 10:46 AM  

Anonymous Anonymous said:

Excellent post Walter. You should try getting this published in the Times as an op-ed rebuttal to Kotkin's essay, or at least as a letter to the editor.

BTW, as it appears you're pondering a move to the land of our Revolutionary War ally, what's the lastest with their immigration problems? Is their govt doing anything meaningful to prevent further riots, and what is the sense on the street?

January 28, 2007 10:46 AM  

Blogger Walter Moore said:

Patrick --

Forgive me for intruding, and feel free not to answer in view of your personal privacy rights, but are you "middle class," and do you intend to leave in the near future? If you can answer "yes" to both, it's 1 to 1. Otherwise, not so much.

January 28, 2007 11:59 AM  

Blogger Walter Moore said:

To 10:46:
Having recently returned from over two weeks in France, I saw zero signs of any immigration problems there -- aside from the presence of a few McDonald's restaurants here and there.

January 28, 2007 12:01 PM  

Blogger Walter Moore said:

P.S. The Times once invited me to write an essay on Measure H, which I gladly accepted. But when I wrote it, they didn't like the argument I made, and they tried to get me to make, and sign my name to, a weaker, unconvincing argument against Measure H (namely, that housing prices are actually low here). It was freaky.

So I won't be asking the L.A. Times to publish anything, with the possible exception of a "house for sale" ad later this year.

January 28, 2007 12:06 PM  

Anonymous Anonymous said:

Say it loud:

I'M WHITE AND I'M PROUD!

Singed,

Moore is Bitter

January 28, 2007 12:44 PM  

Anonymous Anonymous said:

Walter,

THIS IS THE BEST NEWS I'VE HEARD ALL DAY. Is there anything those of us who actually love living in LA can do to help you get your other foot out the door?

Moore is Moving. Great News.

Buh-bye, Walter. Don't let the door hit you in the ass!

January 28, 2007 12:53 PM  

Anonymous Matt Dowd said:

they're all talking about the 'big one' coming. so, yeah, cash out and move. ignore the bad weather up north, the rednecks in the south, or the snow in the east.
or stick it out here with the gay-ass kiss up politically correct namby pamby 'its for the greater good' Hollywood pretentious money driven suck in and spit out fame and glory machine.

I'm stuck here for now.my fans couldn't bear it if I left.

January 28, 2007 12:54 PM  

Anonymous Anonymous said:

Kotkin is only making the case for more development. Perhaps a few more like Playa Vista. The developers who contribute millions of dollars, to universities like Pepperdine, are only interested in more people, more traffic to bring economic growth at any cost. Perhaps Kotkin should try driving south on Lincoln Blvd. past the Marina to Westchester and the airport at the five rush hours every evening and morning, every day.

January 28, 2007 1:11 PM  

Blogger Patrick Meighan said:

Walter,

I dunno if I'm middle class or not. Maybe you can help me figure it out. I grew up in a trailer park, but it was a double-wide trailer, so that's something special. I'm white, but I went to public schools. I've never received welfare, but I've received unemployment insurance payments. I make a couple hundred thousand dollars a year, but I can't afford to buy a home. And I have two cars and they both run relatively well, but they each cost less than $15K per, and I have to park them on the street. What say you? Middle class?

And to answer your second question, I do hope to stay in Los Angeles, but my wife and I have been talking about leaving, largely because we're bummed that we can't afford to buy a home in Los Angeles to raise our baby daughter in. At no point have we discussed the desire to get away from illegal aliens, and I find it very tough to believe that illegal aliens are out there snapping up $600K homes that could otherwise be ours.

So, yeah, I think we're looking at a score of 1-to-1.

Patrick Meighan
Los Angeles Greens

January 28, 2007 1:14 PM  

Blogger Zuma Dogg said:

Walter, just as you say, "Just because two things happen at the same time doesn't mean one caused the other. Just because L.A.'s middle class cannot afford to buy a house here does not mean that's why they're leaving." Doesn't mean people are not leaving because they cannot afford the cost of housing...It just means, "Oh Snap! You just brought to my attention a second, and sadder reason people are leaving. So now ZD can say, "The middle class are being run out of the City because some of them simply cannot afford the skyrocketing cost of housing...And some of them just can't stand to live here anymore for (insert Moore's list here). Yeah, yeah...thanks for bringing it to our attention...Now we can see we are TWICE as screwed.

January 28, 2007 1:37 PM  

Blogger Walter Moore said:

It's "signed," you illiterate twit, not "singed." But thank you for illustrating my point about the LAUSD.

And yes, that's exactly what Kotkin is doing. The new mantra for "affordable housing" will be: "do it for the middle class." Of course, by raising taxes on real property, the actual effect will be to drive out the middle class.

What people seem to forget -- or never knew, having never studied history -- is that, just as companies can go bankrupt, cities and even nations can likewise fail. Look at Detroit, Cleveland and Ancient Rome. L.A. has a great climate and location, but can still be mismanaged into the ground, just like anything else.

January 28, 2007 1:40 PM  

Blogger Walter Moore said:

You make $200,000 a year and claim you "can't afford" to buy a house? Please! I'd love to know your definition of "can't afford."

January 28, 2007 1:41 PM  

Anonymous Matt Dowd said:

he's a joke. 200k. where's it all going?

here's a parallel article Walter, Sydney Australia is introducing 750 new police. The last paragraph of that story explains why we don't see them here yet.
notice the concern though about 'rushing' these cops onto the street without thorough training?
I just thought it was interesting.

January 28, 2007 2:11 PM  

Anonymous Anonymous said:

Someone who makes 200k and can't afford a house has a problem with saving and investing.

January 28, 2007 3:24 PM  

Anonymous Anonymous said:

Matt Dowd sounds like a homophobic. People are leaving LA because it has become a 3rd World Country and will continue to decline when you have politicans who support illegals. They are flooding our city and no one is doing anything about it. They live like pigs and can't even water their lawns where 5 families live. They move into apts. and all the relatives move in and the neighborhood goes to shit. Because so many of them live in LA the schools are overcrowded. health clinics have closed, emergency rooms are flooded, there's traffic because they drive with no insurance and they continue to file for more free services.

January 28, 2007 3:57 PM  

Blogger Patrick Meighan said:

"You make $200,000 a year and claim you "can't afford" to buy a house? Please! I'd love to know your definition of "can't afford.""

FWIW, that 200k is my gross pay. 10% of that 200k goes to my agent, 10% of that 200k goes to my manager, 2% goes to the writers' guild, 2% goes to my church, and a whoooooole lot of it goes to Uncle Sam and Uncle Arnold. From what's left I gotta pay down 60k in student loans. Okay, so now it's house buying time, right? Well, first I gotta save up my down payment (20% of a $600,000 house is $120,000... do YOU have that just lying around?), plus I gotta have a significant savings fund held aside, since the industry that I work in (television) is feast one year, famine the next. Heck, my union (WGA) is talking strike right now. So a year's worth of mortgage payments socked aside, as a safety net, is another $42,000 (do YOU just have that lying around?).

So, yes Walter, it happens to be true that I currently gross $200,000 a year and that I cannot afford to buy a house in Los Angeles. That's not the illegal aliens' fault. And so, for the third time, if I leave Los Angeles any time soon it'll be because I can't afford to buy a home here for myself and wife and infant daughter, not because of any illegal aliens.

It appears that the score remains tied: 1-1.

Patrick Meighan
Los Angeles Greens

January 28, 2007 7:39 PM  

Anonymous Matt Dowd said:

if I'm homophobic, then you're Mexiphobic 3.57

and if God didn't love me, he wouldn't give me a 35-1 shot Sunshine Millions Classic winner yesterday. I'm putting up the video on youtube tomorrow. It was California against Florida and I threw $10 on my favorite California horse, after realising that he could beat that bunch of donkeys.
Nobody else wanted it, I bet it at 20-1 and it driftrd to 35.
I'm thinking of publishing a book, I hit these a lot.
needless to say its been a great weekend. and as they say in mayor sam land, blog away some more dum-dums.

January 28, 2007 7:50 PM  

Anonymous Anonymous said:

I'm Mexiphobic. It's not that I hate them, it's that I don't want any more here, and would love to see all the illegals and their babies just go back. Likewise, I'm sure Mexicans don't want whites or blacks or asians moving en masse into their country either. Maybe we can agree to happily stay apart?

p.s. i'm not 3:57, btw

January 28, 2007 9:52 PM  

Blogger Walter Moore said:

Patrick, dude, you need counseling -- but only from a CPA. You can totally afford to buy a house. You don't need 20% down, for one thing. Plus, the interest and property taxes you pay will be deductible from your federal and state income tax returns, so your out-of-pocket expenditure will be less than you may believe.

Also, for your own credibility, I don't think you want to go around telling more people that you are "middle classe" and "cannot afford a house" because you "only" gross $200,000. Your income puts you in something like the upper 1% in the nation, and higher in the world.

Also, you don't count in the survey, because you have taken zero action to flee this hell-hole. Merely talking about the possibility with your wife doesn't count. Get back to me when you rent or buy a place elsewhere.

You may also want to take a look at a basic econ textbook, because, you apparently do not realize that the influx of hundreds of thousands of people into a city increases the demand -- and therefore the price -- of housing.

As for the 10% to an agent, and 10% to a manager, uh, this may shock you, but a number of couples in this town somehow get by on $180,000 or less.

Summing up: cry me $%^&ing river!

January 28, 2007 10:10 PM  

Blogger Walter Moore said:

Patrick --
Here's some specifics on why you can totally afford a house:

Suppose you find a place you like for $600,000.

You put down 5%, which is $30,000.

You finance the remaining $570,000.

Let's say you get an interest-only loan at 5.5%.

Your interest payments are $31,350 per year, which is $2612.50 per month.

If you're netting $180,000 per year, that means that, even after making your loan payments, you're clearing nearly $150,000 per year.

As you feel more secure in your income, you pay down the principal. Meanwhile, you're going to deduct your $31,350 per year, so, after taxes, you're out of pocket only something like 60% of that sum, i.e., $18,810. (Consult your CPA for the exact numbers; I'm "ballparking" it here.)

Don't forget your property taxes, though. They are 1.25% of your purchase price, so, using the $600,000 price tag, that's going to be another $7500 per year, i.e., $625 per month. But that, too, is deductible.

You'll also need insurance, and you're going to discover the "joys" of homeownership: maintenance, irritation -- I mean "irrigation" -- systems, etc.

But if you WANT to own a house in this city, then you, with your $200,000 per year income, can do so without breaking a sweat.

And I'm not just pulling this stuff out of my . . . hat. Although I don't do it for a living, I AM a licensed real estate broker and Realtor. So I do have, at least in theory, a smattering of knowledge about the field.

January 28, 2007 10:38 PM  

Anonymous Anonymous said:

Say it loud:

I'M WHITE AND I'M PROUD!

Signed,

Moore is Bitter

-----------------

Sorry about the typo, Mr. Moore, but I would like to bring it your attention that it was a TYPO, not a grammatical error. In any event, I also blame LAUSD for the error, my typing skills are not exactly the best, yet I still was allowed to graduate and go on to earn a degree in economics from USC.

I blame LAUSD, because it's apparently in vogue here to just fucking blame somebody for your ills.

January 28, 2007 11:24 PM  

Anonymous Anonymous said:

So you're saying France hasn't had ANY problems resulting from ill feelings toward immigrants? Dream on. Maybe you didn't see them in your two-week "turista" experience, but if you'd been paying attention over the last decade, you'd know better.

In the meantime, let us know when you're leaving so we can have a big party...

January 29, 2007 4:55 AM  

Blogger Patrick Meighan said:

Walter,

Back to math school for you, man.

My manager and my agent each take 10%.

10% + 10%=20%

20% of $200k is $40,000, which means that my manager and agent leave me with a $160,000 gross, before taxes (not $180,000, as you calculated).

Also, Uncle Sam and Uncle Arnold, together, take at least 40% as well (of the *pre-commission* $200,000). So that's $80,000 in taxes, plus $40,000 in commissions, which leaves me with a net of $80,000k. Subtract from that $4,000 to the guild and $4,000 to my church, and I'm looking at a family net of little more than $70,000 for the three of us (*before* the student loan payments I'm making on $60k worth of grad school loans, as well as various cost-of-living stuff: bills, gas, car payments, etc.).

I realize that my family is very fortunate, and I'M NOT COMPLAINING. $70k is plenty for us to live on. But it's not enough to buy a house in L.A.... at least not in a responsible fashion. We COULD do it if we wanted to really hang our asses out. Which leads us to...

"You put down 5%, which is $30,000. You finance the remaining $570,000. Let's say you get an interest-only loan at 5.5%..."

I'm well aware that it's possible for me to take an interest-only loan, and for me to put down a bare minimum deposit, as you suggest (and your figures omit mortgage insurance, by the way, a non-trivial and non-deductible expense if I'm only putting down 5%). But your advice leaves my family's ass showing when the payments get higher 5 years down the road. Traditionally the rationale behind such an arrangement is the expectation that ones income will be higher later, but I don't anticipate that that will be the case. In fact, I fully expect that it'll be *lower* later (as television writers are usually forced out of the business by age 40 or so and have to look for a different line of work). So then what?

Also, if my family should want to move to a different house in three years or so (we may have another baby by then), we'll be effed if we haven't paid down any of the principle (thanks to the interest only loan you've suggested), *especially* if the middle-class housing market has bottomed out in the interrum (something you, evidently, are expecting *will* happen, in that you're predicting a middle-class white flight from Los Angeles, due to the dystopic conditions you blame on illegal aliens). In such a scenario, my family will be upside-down, owing much more than we have, thanks to that sweet interest-only, low-down-payment loan you've suggested to me.

No thanks on that. Instead, what I'm trying to do, Walter, is be responsible and save up a reasonable amount for a down payment (at *least* 10% of the purchase price), and enough in reserve to cover at least 6 months to a year of house payments, in case I should happen to lose my job (which is something every television writer knows could happen at any given moment). It takes time to build up such a nest egg, and my family is truly working on it, I promise you, but we're not there yet, and it'd be irresponsible to take the leap until we are. Further, it'd be irresponsible to sign ourselves up for a mortgage that backloads the bulk of the financial burden to a time (5 or 10 years down the road) when I'll likely be making less than I do now. So prolly no interest-only mortgage for my family. Not if I want to be responsible.

In short, I'm trying to take *personal responsibility* here, Walter. I'd think that you, of all people, could appreciate that. And so the truth, for the 4th time, is that I can't afford to purchase a house in Los Angeles, and it's got my wife and me considering a move elsewhere. If, in fact, my family qualifies as *upper-class* (rather than middle class) and we *still* can't afford to purchase a house in Los Angeles (and are thus considering a departure), well, that should tell you that maybe Joel Kotkin is REALLY on to something.

Also, for the 4th time, I repeat, at no time have my wife and I considered departing Los Angles because of illegal aliens. We love LA's diverse culture (diversity in all its forms: economic, social, racial, ethnic, etc.), and it's a big part of what's pulling us here, not what's pushing us away.

Patrick Meigthan
Los Angeles Greens

January 29, 2007 6:41 AM  

Anonymous Matt Dowd said:

great argument , till you spelled your own name wrong.
for future though, just say your gross income is $160k.
cause that's the truth.
don't open up with 200k, that was a little deceptive too.
its like saying 'a million trees'.
its just not true.

January 29, 2007 8:02 AM  

Blogger Walter Moore said:

I see the staffers are back. Fellahs, don't get too excited about my departure; thanks to the internet, I can point out your incompetence from anywhere in the world.

Patrick, I was indeed off by $20,000. But even so, you're still making more than enough to buy a $600,000 house.

Your "problem" isn't housing prices.

January 29, 2007 8:36 AM  

Blogger Walter Moore said:

P.S. You ignored the dent that the home loan interest deduction and property tax deduction can make in the 40% that goes to income tax. Then again, you've made up your mind that you "can't afford" to buy anything, so why bother considering the actual numbers?

January 29, 2007 8:42 AM  

Blogger Walter Moore said:

P.P.S. Don't equate "density" and "diversity." I love meeting people from other countries. Indeed, I plan to live in another country, where I will be the foreigner. I do not enjoy overcrowding, gridlock, and third-world living cconditions.

January 29, 2007 8:46 AM  

Blogger Walter Moore said:

And another thing. As for illegal immigrants in France, France doesn't screw around. Not only do they enforce their laws, they criminally prosecute people in the country illegally AND those who hire them. So were there some riots a while ago? Yes. Are the people of France going to sit around and let their country get taken over by illegal aliens? No.

January 29, 2007 8:51 AM  

Anonymous Anonymous said:

Just checked realtor.com & found a nice affordable starter home for a young family for $385K in Harbor Gateway. Oh, that's right, can't live there, not safe as it's been OVERRUN BY ILLEGAL ALIEN GANG MEMBERS.

January 29, 2007 9:27 AM  

Blogger Walter Moore said:

To 11:24: Your spelling is the least of your problems. What should concern you more is that you are unable to refute any of my arguments on the merits, so you simply make up false statements and attribute them to me. How pathetic is that? Is that the BEST you can do? If so, enjoy your position as a staffer for as long as you can, because you won't last long in the real world.

To 9:27: LOL. But it's not "illegal gangs" -- it's the wonderful diversity that makes this city so wonderful. Remember: all "cultures" are exactly equal, beautiful and worthy, including those that disobey all laws and engage in violence.

January 29, 2007 10:36 AM  

Anonymous Patrick Meighan said:

Walter,

I just explained to you, in great detail, how homeownership in Los Angeles is not currently affordable to me unless I make stupid, irresponsible choices of the sort that you suggest (interest-only, low-down loans that'll crush my family in five years, when the payments jack up). Your only response was, in essence, "oh yes it is so affordable to you." Pfft. How'm I supposed to rebut that? You think I'm renting 'cause I don't WANT a home?! You think *70%* (SEVENTY PERCENT) of Los Angeles is renting because *70%* of the folks in Los Angeles don't WANT homes? Ridiculous.

Walter, if I lived in most any other location in America at this very moment, I could take what I currently have in savings and pay a 20% down payment on a house, get a reasonable mortgage that'd allow me to pay down some principle *in addition to* interest, and still have a chunk set aside as an emergency fund, in case my employment were to end. In other words, in any other city but Los Angeles I could, right now, buy a house while exercising, you know, "personal responsibility" (you remember "personal responsibility," right Walter? It's what you base your own whole political philosophy, except in cases like today when it doesn't happen to fit your argument). But, unfortunately, I live in Los Angeles, and so I can only afford to buy a house right now if I take your advice and sign on to a crazy interest-only mortgage, pay next to nothing down, and stay up nights praying that my job doesn't go away, especially at a time when the housing market has tanked, 'cause then I'd have no choice but to abandon the house, declare bankruptcy and stick the bank with my losses.

Sound like a responsible thing for me to do, Walter?

So no, Walter, for the umpteenbillionth time, I could not afford to buy a house in Los Angeles right now. Just about any other place in America, yes, but not in Los Angeles. Not right now. Not in any sort of a responsible way.

"Just checked realtor.com & found a nice affordable starter home for a young family for $385K in Harbor Gateway. Oh, that's right, can't live there, not safe as it's been OVERRUN BY ILLEGAL ALIEN GANG MEMBERS."

Actually, I can't live there because I work in Miracle Mile and the commute from Harbor Gateway would eat an extra two hours out of my day (at least)... hours I'd rather spend with my wife and infant daughter, thank you very much. I'd be happy to do it, though, if the commute took less time... something that'd be possible if L.A. had a decent, extensive light rail system.

Wanna help me make that happen?

January 29, 2007 11:14 AM  

Anonymous Anonymous said:

I am a native California, but when Tony Villar was elected, I saw the handwriting on the wall!

I am fortunate in that my home purchased in the 70's and my income property purchased in the 70's is still protected by Prop 13!

Instead of selling, I am leasing my house out for $10,000/mo. and I still have my hefty income coming in every month from my rentals in South Central.

I WILL NEVER SELL because the city would reap a fortune on increased property taxes!!!!!

My whole family moved out of CA because it is a hellhole! My grandchildren will never have to see the inside of a LAUSD school!!!!

We now have the best of all worlds...property in LA and a new life in another State!

If you can afford to move out of CA without selling, it's great...but either way, get the hell out!

IT WILL ONLY GET WORSE, IF POSSIBLE!

January 29, 2007 11:21 AM  

Anonymous Anonymous said:

If you think the cost of housing and living is high in LA, my young friend, try NYC. Save and invest your high income, watch your pennies (or in your case c-notes), and as Monsieur Moore has eloquently outlined, you'll be able to afford a house here - though it may take a few years or more (it's called "delayed gratification"). In fact, you can probably afford a home right now in a less expensive area of the city, ride the bus, and at the same time experience the wonderful "diversity" of Los Angeles. And don't whine about long commute times; I had a killer commute for years while saving for my house and earned less than 200k.

January 29, 2007 11:50 AM  

Blogger Patrick Meighan said:

To 11:50: Read this thread again. Mosieur Moore has NOT "eloquently outlined" a years-long path of patient saving and investing and delayed gratification until such time as I can afford to buy a house. That is, in fact, what I'm trying to do. Walter, however, disagrees with you and I and, instead, suggests that I just hang my balls out right now on a low-or-no-down-payment, interest-only mortgage, risking bankruptcy when the payments increase, when my job disappears, or when the housing market tanks. That's Walter's suggested path to homeownership. For Walter to suggest what you suggest (that I patiently save for several years until I have enough for a reasonable down payment, a mortgage that includes principle, and an emergency safety net fund put aside in case of income loss) would require Walter to admit that I, an upper-middle-class Angeleno, cannot afford to purchase a house right now in Los Angeles, thus undermining the whole point of his entire post. Can't have that, can we?

To all others, check out 11:21's comment. If people (such as this lady or gentleman) are hoarding multiple properties in Los Angeles without ever selling (and are, in fact, incentivized to do so, thanks to Prop 13's grandfathering of property taxes at rates 40 years out of date), can there be any wonder why L.A. housing remains scarce and, thus, why home prices skyrocket to a level where middle-class Angelenos cannot afford to buy? I know that examining that factor may be uncomfortable for y'all, in that it's difficult to find a way to blame it on illegal aliens, but maybe you can stretch yourselves a little.

Patrick Meighan
Los Angeles Greens

January 29, 2007 12:17 PM  

Anonymous Anonymous said:

Oh My God. The RoseHills Review guy looks gay.

www.myspace.com/rosehillsreview

January 29, 2007 12:30 PM  

Anonymous Anonymous said:

Housing prices are all about supply and demand. One can always relocate to an area less in demand with nice homes selling for less than $300,000. It is a personal choice to work in the Entertainment Industry and live in the Entertainment capital of the world.
I just felt an earthquake. Did anyone else?

January 29, 2007 1:15 PM  

Anonymous Anonymous said:

Don't confuse the point, my young impatient friend. The fact is you CAN afford to buy and own a home right now -- and if you want a home in a more desirable location (and yes, SAFER area with decent schools for your child) with a shorter commute -- you should well, save, invest, and apparently be a little more responsible with your spending. And the fact remains, which you conveniently ignore, is that compared to other major cities, LA's prices -- while expensive -- are relatively affordable.

January 29, 2007 1:18 PM  

Blogger Patrick Meighan said:

"And the fact remains, which you conveniently ignore, is that compared to other major cities, LA's prices -- while expensive -- are relatively affordable."

On what do you base that "fact"? Because in August of '06, CNNMoney called LA's housing market the least affordable in the nation.

Quote:
"About 40 percent of homes in the United States were deemed affordable to families earning the national median income of $59,600... Contrast that with the Los Angeles /Long Beach/Glendale housing market, the nation's least affordable, where just 2 percent of all the homes sold during the quarter were affordable for those earning the median family income of $56,200. The median home in Los Angeles costs $521,000."


"The fact is you CAN afford to buy and own a home right now -- and if you want a home... with a shorter commute -- you should well, save..."

In other words, I CAN afford to buy and own a home OUTSIDE OF LOS ANGELES right now, and commute to LA from there. But if I want to buy a home IN LOS ANGELES, I should save my money for several years. I agree with you. But that's not what Walter is saying. Walter is saying I can afford to buy a home IN LOS ANGELES right now, as can any other middle-class Angeleno, and that, presumably, L.A.'s 70% rental rate is due to, I dunno, the vast majority of Angelenos having a hatred of houses or something. Walter's wrong, of course, and you're as much as admitting it here. As I've demonstrated anecdotally (and CNNMoney delcares statistically) middle class folks cannot afford to buy a home IN LOS ANGELES, unless they wanna follow Walter's advice and get an interest-only loan with 5% (or less) down, never actually pay down any of the principle and and pray to Jesus the market doesn't tank at a time when they're forced to sell.

That's Walter Moore's version of the American dream. Yippee.

"Housing prices are all about supply and demand. One can always relocate to an area less in demand with nice homes selling for less than $300,000."

Yes, one can always relocate to an area that is NOT LOS ANGELES. You and I are in full accord. But that's not what Walter's saying. Walter is saying that homeownership is eminently available to any and all middle-class folks in L.A. Not elsewhere. Here. No relocation necessarily. No years-and-years-and-years of saving needed.

I've demonstrated that to be hooey about as thoroughly (and in as many ways) as humanly possible.

Patrick Meighan
Los Angeles Greens

January 29, 2007 3:03 PM  

Anonymous sword of truth said:

Patrick,

Your post of 7:39 pm Jan. 28, you stated you give 2% to your church. How does that qualify as tithing, if a tithe is 10%?

January 29, 2007 5:44 PM  

Blogger Patrick Meighan said:

SOT,

It doesn't count as tithing, since, as you said, tithing is giving 10%. I never said I tithe. I said I give 2% to my church.

Hope that helps,

Patrick Meighan
Los Angeles Greens

January 29, 2007 8:00 PM  

Anonymous Anonymous said:

Say it loud:

I'M WHITE AND I'M PROUD

Signed,

Moore is Bitter

--------------------------------

Mr. Wacko,

To clarify, again, it's not a grammatical error, it was a typo. T-Y-P-O. Got that? As for me not addressing your points, pfft. Patrick has been singing the same tune for two days now, you know what time it is, punk.

And I'm not a staffer, I'm a lobbyist for one of the world's largest financial firms. I'll be around 'till both LA's and CA's coffers are bone-dry.

January 30, 2007 12:04 AM  

Anonymous Anonymous said:

To Patrick:

Re: "Hoarding" my properties that have been grandfathered by Prop 13!

Let me educate you, please!

In 1971 I purchased a 1 acre estate in Bel Air for $140,000. The taxes in 1971 were $6000/yr.When Prop 13 was enacted those same taxes went down to $2500/yr. The house is now worth $2.5Million. My taxes are still under $3000/yr. If the property was reassessed today, I would have to pay somewhere around $40,000/yr in taxes!!!!!!!!!!!!!!!!!!!!!

Do you think I am hoarding????

My friend, I would have to be declared mentally incompetent if I were to sell my beautiful house! I WILL NEVER SELL!!!! Nor will any of my contemporaries who bought real estate in the 70's!

My rental properties that I paid under $50,000 are now worth $400,000 and the taxes are still $500/yr!!!!!

All of us old timers who bought in the 70's became multi-millionaires and those days ARE OVER!!!

I will be eternally grateful to Howard Jarvis!!!! It was a once in a lifetime opportunity!

January 30, 2007 7:09 AM  

Blogger Walter Moore said:

Patrick --

Seriously, go talk to a CPA.

For what you're almost certainly paying in rent, you could instead be buying a home. You're not playing it "safe" by refraining from buying, you're simply choosing one type of risk instead of another.

Homes tend to appreciate, with some ups and downs. If you had bought a house for $500,000 with just 5% down (i.e., $25,000) in 2000, it would have been worth $1 million by 2005. You would have thus turned your $25,000 into $525,000 worth of equity, while paying no more for an interest-only loan than you would have paid for rent. Not bad, huh?

Look, you brought a child into this world with no guarantee of lifetime employment -- no one has guaranteed lifetime employment -- because you believe you'll be able to provide for that child. Why start betting against yourself now?

Anyhow, best of luck to you. I hope it works out for you, whether you decide to rent or own. I just hope you'll invest a little time with a CPA to map out the costs and benefits of renting vs. owning, after taking into account taxes, inflation and real estate trends.

That's all I'm going to say on the subject.

February 01, 2007 11:03 PM  

Blogger Walter Moore said:

To 11:21 a.m.:
If you bought your home in the 1970's, I assume you have reached the age of 55. If so, your property taxes are portable; you can sell and buy another place in L.A. without your taxes going up. Contact the County Tax Assessor to confirm same.

Your better option, however, is to sell and get the hell out of here, before the rabble take away even that option!

February 01, 2007 11:11 PM  

Blogger Walter Moore said:

11:21 -- Disregard my comments. I just re-read your post and see that you have already fled the state. Congratulations..

February 01, 2007 11:12 PM  

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