"Condo-mania"

From: Los Angeles Daily News
www.dailynews.com

STUDIO CITY - Jane Drucker moved into a 1948 vintage apartment on Laurelwood Drive 21 years ago. A block south of Ventura Boulevard, the street had all the charm she needed.

But little by little, Drucker has watched that fade. In the past two years, two homes and a piece of land on her side of the street have morphed into luxury condominiums.

Drucker's building is slated to be next.

"You're losing the social structure of the neighborhood," the 54-year-old life coach said, sitting in her spacious yet cozy two-bedroom apartment at 11805 Laurelwood. "And we can't afford to get into the condo market. Somebody suggested we use our relocation money as a down payment. Well, $3,000 is going to get me a car but not a condo."

The disappearance of rent-controlled apartments - those built before 1979 - is a phenomenon occurring across Los Angeles. More than 11,000 such units have vanished during the past five years, including about 7,000 in the past 18 months.

In Van Nuys and Encino, Sherman Oaks and Sun Valley - from the northern San Fernando Valley to the South Bay - developers are making a tidy profit converting these units or completely rebuilding them as condos and town homes.

"This wave of condo-mania is ripping through the heart and soul of many...L.A. communities, and it's just running like wildfire," said Larry Gross, executive director of the Coalition for Economic Survival, which led the rent-control movement in the late '70s and is pushing for a moratorium on condo conversions.

A changing cityscape is visible across Studio City - in scores of under-construction monoliths along the L.A. River, on Coldwater Canyon Avenue, near the CBS Studio Center. On Moorpark Street before 8 a.m. recently, a bulldozer turned to rubble a cottage home standing the night before, clearing ground for eight condos.

Low-rent tenants are being evicted and can't afford apartments at the market rate. Those who remain are frustrated by the fleeting charm of their once homey neighborhoods. The issue is acute in the 11800 block of Laurelwood Drive.

"I went to sleep and woke up and found myself surrounded by condos that literally went up overnight," said Keith Merritt, 38, a writer who lives in the Laurelwood Penthouse Apartments.

The 20-unit Rudolph Schindler building, one of Studio City's few cultural landmarks, is listed for sale at $5.9 million. The owner is trying to convince interested buyers it could be converted into condos without much fuss. Because of the historic designation, it would be cumbersome, though possible, to raze the building.

Laurelwood already has been overrun with traffic, construction crews and illegal parking, residents say. Carpenter Avenue School is beyond capacity. And $900,000 condos will usher in anti-family yuppies who won't care about their neighbors, critics say.

To be sure, parking is atrocious during the day, but restricted to residents from 10 p.m. to 6 a.m. Carpenter's principal said the school has 848 students and can handle 900. And, of course, it's natural to resent a neighbor whose purchase might motivate your landlord to evict you and build condos.

Public meetings

Furor and fear have resulted in three joint meetings of the City Council's planning and housing committees. A standing-room-only crowd of about 400 people packed Monarch Hall at Valley College recently to address concerns about Studio City and Valley Village.

But solutions aren't simple. Under the state Ellis Act, landlords cannot be forced to stay in the apartment business.

"They can tear down their building. There is nothing I can do about that," Councilwoman Wendy Greuel said. A Studio City resident, Greuel said the community needs a balanced housing stock, but didn't elaborate.

The Department of City Planning could not provide statistics on new condo construction and conversions under way in individual communities because those figures are kept only by council district.

But in Studio City, where the median-priced home hit $875,000 in April, the most recent period reported, and where condos seemingly sprout in larger numbers than anywhere else in the Valley, rent-controlled units are, as Valerie Yaros says, "endangered."

"The whole character of the neighborhood is being destroyed. And the color is changing from green to beige. I call this condo-mania `the beige plague,"' said Yaros, who has lived in the Twin Palms apartments on Laurelwood since 1990 and pays less than $1,000 for a two-bedroom.

"Look at what's in front of my building. Look at all the green! Trees. Palms. Flowers," Yaros said as she walked Laurelwood. "Instead of preserving, they just see massive, massive profits. Going. Going. Gone!"

The Twin Palms' owners, who declined to comment, sent tenants a letter in April that said they were "exploring the feasibility of demolishing the building and putting the property to some other use."

This has become a common tactic: Instead of dealing with the complications of converting apartments to condos, developers are scrapping whole complexes and starting over.

When a $1 million home can be replaced with four condos that will sell for $800,000 each, the incentive to build condos is clear. Same goes for trading 20 apartments - which could generate a combined $30,000 a month and require upkeep - for 20 condos.

But, similar to the period before real estate tanked in the early 1990s, a glut of unreserved, under-construction condos is developing.

Deck House Court, built on a vacant Laurelwood lot between Drucker's and Yaros' apartments, was completed in January but has only filled 11 of 21 units, ranging in price from $695,000 to $900,000.

"Everybody is used to the fast market, and now it is slowing down," said Joanne Lindsay, an agent selling the town homes. "It's not that there is anything wrong with it. It's nice for the buyers to have a chance to breathe."

If the real estate market continues to slow, the motivation for apartment owners to convert their units to condos will dissipate, said Chris Thornberg, an economist with the UCLA Anderson School of Management.

"This will pass. We will get through this," said Thornberg, who long ago theorized the current housing market is a bubble set to burst.

However, Thornberg said any additional regulations, such as a moratorium on building condos, would discourage developers from buying a piece of land for new apartments and would worsen rental conditions.

Cashing in

Meanwhile, apartment owners are still trying to cash in. Laurelwood Ventures, which purchased Drucker's building less than two years ago, applied last July to build 24 condos in place of 15 apartments.

"Obviously, the motivation is financial," said Ben Reznik, the developer's attorney, who added that the condos would have 54 parking spaces and would improve the street.

"Maintaining older buildings like this and just keeping them there - some people view these as more affordable than what would be built - is a sort of naive and backwards way to think of maintaining a stock of affordable housing because the owner is disincentivized from putting money back into the building," Reznik said.

The condo project was approved in March and appealed by the Studio City Residents Association, which disagreed with the city's willingness to vacate 30 feet of Laurelwood to the developer. The South Valley Planning Commision rejected that appeal Thursday, and the residents association is considering appealing to the City Council.

Development guidelines are laid out in the city's general plan for Cahuenga Pass, Sherman Oaks, Studio City and Toluca Lake. It hasn't been updated since 1987, so residents are fighting building proposals as they arise.

"We usually reach agreement on these things," said Tony Lucente, president of the residents association. "But in the last year, the scales have been tipped, and people are very angry and upset because they are literally witnessing the destruction of our neighborhoods.

"The thing I always say to developers is, You're dying to come into Studio City because we've made it such a good place. But how long will that last?"

Paralee King, 59, has lived on Laurelwood since she was 7. Her house is one of only two remaining on the north side of the block. Last February, she bought the other, paying about $850,000 for the 1,300-square-foot, 1939 cottage. She's since made about $200,000 in upgrades.

The purchase made her a hero among some neighbors. But King wants no such esteem.

"I wanted that house because I don't want a high-rise next to me," King said. "But if I want a high-rise, that's my decision. I don't need any neighborhood association telling me what to do.

"I'm sorry about all the building, but they should have stopped it 10 years ago when that building went up across the street from me. It is too late now. They want to stop it from happening to the last two houses on the street?" she asked. "It's too late."