Wednesday, August 31, 2005

Are LA people "plastic"? And if so, why?

"What makes LA people plastic? This very question was addressed to some of the people living in LA, specifically in West Hollywood. If it is fame or fortune, what is it that motivates them to achieve it? Every human strives toward gaining power, this documentary explores whether materialism brings absolute power."

In September 2004, documentarian film maker, Renat Zarbailov, took his camera around Los Angeles and interviewed people, asking them to clarify if they think L.A. is is made up of "plastic people". And what are "plastic poeple"?

It is quite enlightening to watch and listen to the responses he gets from people.

You can watch this documentary online, courtesy of (Thanks! for hosting this and other documentary films)
(download or watch online)

What do you think? Are LA people "plastic"? What are "plastic people"?

Tuesday, August 30, 2005

Report indicates LA real estate market began to cool in 2004

In a report titled "The Cycle Turns" located at this website (Link to zipped report "Cycle Turns 2005 referenced above, which is very comprehensive, I found two graphs representing price changes in real estate, in the first half and last half of 2004 to be very inlightening. It appears the coastal areas are being hit the hardert by deflation in prices.

What is interesting to see a couple bluish specs in L.A. during the first half of 2004, and to find out what communities those represent.

What do you guys think about this report?

Gouging rents to Katrina Hurricane disaster victims.

I have received reports that some Houston area hotels are inflating rental rates to Katrina hurricane victims.

In one news story, it is titled "Attorney General Warns against Price Gouging".

Although the Texas Attorney General is making the warning, it is unclear how the hotels would be prohibited from gouging their rental rates to hotel guests who had fled from Katrina's path.

According to news reports, the attorney general's claimed weapon to combat price gouging is a law that prohibits false advertising - advertising at one price and then charging another price. It seems that, all the hotels have to do is just change all their advertised prices to the new inflated amount.

Here are some news reports I found interesting.

Report 1
Report 2

Is this a story price gouging of rents following a disaster show a weakness in the "supply and demand" form of economics? If it is a weakness, is “regulation” a way to fix it? If not, are there other methods to fix it? If so, what are they?

People can post their comments to this blog entry. And you can see the comments of other people that have commented too.

BTW, this is an example of how people not effected directly by the hurricane get effected indirectly by inflated rents.

I presume other owners of capital, such as land owners, will also be using this opportunity to raise prices, since "demand" will be increasing.

During WWII, the president issued an executive order to create the "Office of Price Administration". One of the primary missions of that office was to stop rent inflation in the United States during WWII (see: Office Of Price Amdinistration )

LA's Oldest "Intentional Community"

"LA’s Oldest Intentional Community" located in Korea Town part of central LA was written of in the September issue of the Whole Life Times

"Positioned in the middle of a three-way intersection on a hot summer afternoon in downtown LA, the indefatigable Lois Arkin is multitasking. While intent on explaining the mission that inspired her Eco-Village home—“to reinvent the way we live on our planet and in our cities, in a way that demonstrates the processes for making a neighborhood sustainable: ecologically, socially and economically”—Arkin is simultaneously, and with singular determination, “retraining” traffic."

"For as far as Arkin is concerned, this corner is not a vehicle intersection at all—it’s a “plaza,” easily identified by the whimsical paintings on the pavement, the potholes filed with colorful mosaic tile and the explanatory signs on the sidewalk. As cars appear, Arkin, a 68-year-old optimist with bright, clear eyes and short grey hair, smiles pleasantly and gestures for the confused drivers to go around her. As they do, smiling back with perhaps some apprehension, Arkin waves and thanks them before continuing her conversation about the intentional community she co-founded."

"Conceived in the late ’80s, formally founded in 1993 and based, since ’96, in an apartment building near First and Vermont, Arkin’s Los Angeles Eco-Village (LAEV) is theory in practice, a living, breathing example that it is possible to create “a higher quality of life at a lower impact.” Central to this determination is the goal of reducing the number of cars in LA, and re-envisioning the neighborhood—and ultimately, the city—in a way that supports and enables a car-free or “car-light” lifestyle."

"A school bus drives by, and Arkin holds her breath and closes her eyes to shield herself from the hulking invader’s particulate-matter emissions. Though the middle of the country’s smoggiest city—the veritable birthplace of sprawl—might seem an unlikely place to stage an environmentally-driven transportation revolution, it is perhaps the ideal atmosphere to demo “car-light” living. After all, to borrow from a song about another city, if you can make it there (without a car), you’ll make it anywhere. And contrary to outsiders’ perceptions of LA as a hopelessly vast public transportation wasteland, LAEV’s neighborhood is actually one of the nation’s densest—more heavily populated than some parts of Manhattan, according to the US Census Bureau—and well within walking distance of 20 bus lines and two subway stops. LAEV residents who opt for public transport, foregoing automobile ownership, are not only spared a car payment, they receive a $20 discount on their rent for their show of good faith."

"At around 7:30 on a balmy June evening, residents and guests drift into the courtyard of LAEV’s sunflower-yellow, Spanish-style, 1920s building. A weekly potluck dinner in a common area is typical of most intentional communities, and Eco-Village is no exception. Amidst the courtyard’s thirsty grass, large vegetable garden and rabbit run, Jose Luis Escorihuela, a high-school math teacher from Spain known to all as Uly, has assembled a hodgepodge of benches and lawn chairs around a folding table. A workshop on nonviolent communication hosted in an upstairs common room ran a little late, and its facilitator and others scramble to find spots around the table. Joe Linton, tall, with Malcolm X-style glasses and a sense of humor that tends toward good-natured sarcasm, appears with two steaming homemade pizzas, inciting a chorus of “oohs” and “ahhs.” Linton, author of a forthcoming book on the Los Angeles River and a founder of the Los Angeles County Bicycle Coalition, sports a dark tan as testament to his dedication to two-wheeled transport (as well as his affection for Sunday-morning Ultimate Frisbee matches in Griffith Park)."

"Lara Morrison, with a shock of red hair, an easy smile and a Master’s in bio-ethics, is LAEV’s building manager and a former employee of the Museum of Natural History. She arrives bearing a pie assembled from the bounty of the property—LAEV boasts an impressive variety of fruit trees including fig, tangerine, apple, guava, lemon, banana and plum."

"Arkin has whipped up pasta primavera made with LAEV-grown veggies; while she eats, she feeds salad to a rabbit that lives in the courtyard but is currently ensconced in her lap."

"Conversation at Sunday dinner drifts from brainstorming ways by which LAEV might enhance its community influence to debating the terms of the newly forming housing co-op (should community work be required or voluntary?), to discussing the progress of various committees engaged in construction and renovation projects along the property’s borders. The atmosphere is charged and passionate; at one moment, Morrison jumps up from the dinner table to illustrate her point on a nearby dry-erase board; at another, Escorihuela, fading sunlight crowning him from above as candlelight frames his face from below, shares his frustration with public school bureaucracy before waxing enthusiastic on the possibility of bringing ecovillage education back to his home country. When a visitor asks Linton what he thinks should be done to restore LA’s concrete-lined river, he retorts, 'Do you want the 20-minute answer or the two-hour answer?' "

"Arkin describes LAEV—a member of the Ecovillage Network of the Americas and the Fellowship for Intentional Communities—as “a philosophy and a state of mind which anyone is welcome to join.” More tangibly, in addition to its 38 intentional residents, LAEV consists of hard assets. Following the ’92 riots, when the strip mall behind the buildings LAEV now occupies was torched, the co-founders refocused their determination to reinvent the entire neighborhood and coax a phoenix out of the ashes of racial contempt and misunderstanding."

"Then, in the mid-‘90s, Arkin learned that a nearby building was about to go into foreclosure. After enduring a long and sometimes discouraging process of applying for monies from commercial lenders and amassing a complicated amalgam of funding from public, private, individual and commercial sources, Arkin’s organization, the Co-operative Resources & Services Project (CRSP), which owns Eco-Village’s tangible assets and oversees its operation, bought 117 Bimini Place and moved in."

"Since then, LAEV has worked doggedly to rehab the primary structure, while simultaneously greening it with renewable flooring, low-flush toilets and the like. The purchase of a second building allowed CRSP sufficient equity to seriously consider acquiring one of the neighboring strip-malls and developing it to complete their vision of the 'urban core.' "

" 'Retail on the ground floor, non-polluting commercial on the second and sustainable housing above that,' Arkin enthusiastically explains."

"Responding to a naïve suggestion that, 'You can’t control what goes on outside your doors,' Arkin contradicts, 'Oh, but you can—substantially and significantly.' "

" 'Vermont Avenue is a roughly 30-mile transit corridor from the Hollywood sign to San Pedro,' she continues, walking beneath the cork trees and pedestrian lanterns which LAEV finagled the city into installing on Vermont (bus shelters and bike racks completed the package). 'Most shoppers here come from one-to-four blocks away, but they don’t walk because it’s ugly and they don’t bike because they perceive it as dangerous. As you develop the area [according to a car-free or car-light philosophy], you transform parking lots into plazas where people’s social lives can be extended from their relatively small apartments.' "

"While most contemporary intentional communities share land or a structure, their defining characteristic is a shared vision and common purpose among members. Ecological sustainability and permanent affordability are at the core of LAEV’s intent. Residents can purchase a unit at a price well below market value, but cannot reap a market profit when they are ready to move on."

"The best LAEV projects extend benefit beyond the village’s borders. Last year, a community member conceived of refashioning the north side of one of the LAEV buildings from a slab of concrete into a water filtration system. Runoff from the roof was flowing into the street, collecting pollution on its way to Santa Monica Bay. A proposal was presented, approved through the community consensus process and begun: the concrete was broken up and repurposed into a three-foot-high retaining wall into which residents deposited mulch—collected over the course of several months by sweet talking city workers mulching neighborhood trees—and rocks, to form a stream bed into which residents planted native flora donated by a local foundation. Now, the few hundred square meters that once diminished quality of life purifies water from the roof and returns it to the aquifer beneath the building."

"The main LAEV building may have some housekeeping and maintenance issues—the trees urgently need trimming and some windows could use a fresh coat of paint. Yet it is undeniable that LAEV’s efforts have a positive impact in their neighborhood and beyond. On a street dominated only a decade ago by prostitutes and drug dealers, neighbors now greet Arkin warmly as they pass. The village was instrumental in transforming a nearby block into a park that literally cleans water from the surrounding streets entering the storm drain, and numerous residents have quit their cars since moving in, reducing carbon emissions. Plans are underway for making LAEV’s block a slow-car zone and turning an adjacent alley into an asphalt-free promenade with community areas and small businesses that will provide jobs for area residents."

"LAEV has changed lives in other ways. As diners collect the flatware and pots they’ve brought to share their meal, Chinese-born Tina Wang, a paralegal at a downtown law firm, tells of what living in Eco-Village means to her. 'It’s helped me a lot with homesickness,' she says touchingly. 'People care for each other. I know if I disappeared for three days, people would say, ‘Where’s Tina?’ "

" 'We’d have the police looking for you within 24 hours!' promises Lara Morrison.

"Yang continues: 'It reminds me of Beijing, where I lived with eight other families around a courtyard. Everyone shared food and knew each other. Here, it’s the same thing. That helps me a lot.' "

"A former public radio news producer, LA resident Paul Tullis’ work has appeared in four books, as well as magazines including The New Yorker, The Los Angeles Times Magazine, Salon, Wired and McSweeney’s."

Monday, August 29, 2005

Are we in a Real Estate Bubble today - Flash back to 1935 for some perspective

Check out this "newsreel" created in 1935 by the "Federal Housing Administraion". According to the newsreel report, the housing market in the United States was in severe deflation from 1929 through 1934. The Federal Housing Administration was created and began a program to increase the amount of housing production.

Interestingly the logo for the Federal Housing Amdinistration is in the shape of a house with a bubble around it. Becaus it seems that their program increased the amount of home building in the U.S. and the prices of real estate began to risk.

You can watch and listen to this report from 1935, which was 70 years ago.

Sunday, August 28, 2005

Billionaire buying up property in Malibu

According to several reports, including one in the Los Angelest Times, July 10, 2005, titled "Billionaire on Malibu: I'll take it!",
Larry Ellison, a billionaire is buying up several multimillion dollar residential properties in Malibu.

"In a $180-million buying spree that began two years ago, Larry Ellison, chief executive and co-founder of software giant Oracle Corp., has purchased a dozen Malibu properties, all but two of which are residential."

"To top it off, the 60-year-old billionaire may have just begun to shop. Last week, rumor had it he was also eyeing a Malibu shopping center. But that may have been a case of mistaken billionaires, as sports mogul E. Stanley Kroenke purchased the Malibu Colony Plaza."

"Ellison, who has hinted at the possibility of bringing an NFL team to Los Angeles, bought the shuttered PierView Cafe on Pacific Coast Highway in 2003 and the adjacent Windsail Restaurant property last year. Talk around town is that he may combine them into one high-end restaurant. Ellison was unavailable for comment on his plans."

"He made his most recent residential purchase this year, buying the home of Grammy-winning music producer David Foster and his wife, former "Hee Haw" TV actress Linda Thompson. Ellison bought that 22-acre property for slightly more than $20 million."

"The Mediterranean-style home, in the gated Serra Retreat neighborhood, has three recording studios, a guest house, a pool, a spa and a seasonal stream. The estate, built in 1983, has nine bedrooms and 11 bathrooms in about 9,900 square feet."

"There is no indication that Ellison is going to use the home as a personal residence. The property and its former owners are featured in "The Princes of Malibu," a reality series due to debut tonight at 8:30 on Fox."

"In 2003, Ellison made news by buying five Malibu properties for a total of $65 million. Of the Malibu beach homes he now owns, only one has been rented out, and it isn't certain how he will use the others."

" 'It's a mystery,' said Katie Bentzen of Pritchett Rapf Realtors. 'What is clear is that he likes to acquire real estate, and he's concentrating heavily on Malibu.' "

"Bentzen had the listing on Ellison's first Malibu purchase, a house on Carbon Beach. "He came back 30 minutes after first seeing it and bought it at $14 million or $15 million." He had barely signed the deal before he was already back out looking at a neighbor's house, she said. He subsequently bought more than half a dozen properties along Carbon Beach."

"Cecelia Waeschle of Sotheby's International Realty voiced concerns about Ellison buying more than a few homes in such a concentrated area and questioned how the purchases might inflate prices. Ellison paid $15 million for what few people would call a large house — 1,600 square feet. But the property has 65 feet of beach frontage."

" 'Are the prices realistic?' asked Jay Rubenstein, manager of the Coldwell Banker, Malibu West office. Ellison's purchases probably have raised the prices at Carbon and other beaches, he said."

"The 2005 median sales price of a single-family home in Malibu through May was $1,750,000, according to DataQuick Information Systems, up from $1,696,750 a year earlier. In Rubenstein's office, sales have averaged $3.1 million, in contrast with $2.1 million last year."

"I think it's fabulous," Rubenstein said of Ellison's purchases. "The guy has a lot of money, and he's spending it here."

"Ellison makes Forbes magazine's short list of the richest people. (He's either ninth or 10th — does it really matter?)"

"Despite the Malibu property grab, Ellison continues to call Northern California home, with residences in the Pacific Heights area of San Francisco and in Woodside, a suburb 30 miles south."

"He recently completed a $200-million, 16th century Japanese-style villa on more than 60 acres in Woodside. While it was under construction, he listed his former home, a seven-bedroom, 8,000-square-foot house in Atherton, also Japanese in style, at $25 million."

What is curious, is why is he buying up multimillion dollar houses. According to reports, many of them are being kept vacant, and he does not live in any of them.

When a billionaire buys up homes in this fashion, it reminds me of the game Monopoly.

Saturday, August 20, 2005

Land Trusts in Nevada... California too?

I think this is an interesting story interview with Nevada Governor.

I wonder how it may effect speculative buying.

I imagine that because the state owns the land, that this eliminates or significantly limits "property rights" which have been raised by
property owners, when being told what they can or can't do on that

I imagine this will change the way financing is done on properties like this. The state could institute rules about buying a property and then renting it out, which could make these less attractive to "investors" or
"speculators". Speculative buying and selling could be defined by the
state land trust and prohibit it. they could also continue to modify the
rules to close loopholes that become apparent.

The state could also implement provisions that restrict sale to persons
within a certain income range which certainly would keep many investors
away. These provisions may require new buyers to disclose all their
income and assets, when applying to buy the structure on the land.

From what I have learned of some super rich people, they don't like to
reveal their assets.
And if some speculator tries to lie, to get into one of these homes, and
it is revealed that they lied, they could lose thier money and maybe end
up in jail or prison with a steep legal bill.

I wonder if this is a step in the direction of Henry George's idea of a
"single tax", which was intended to more fairly tax land owners based on
its value to the community and to fairly distribute community capital
improvement costs to those that that benefit from them. For example,
land adjacent to a public transit station would be more valuable than
property further from the station. And in California with Prop 13 and
REITs, those capital improvements do not get fairly distributed to those
often do not get added to assessed values proportionately to those that
benefit the most. Therefore they are subsidized by the common people
more so.

Thursday, August 18, 2005

Saddam's son takes $1 billion in US cash from Central Bank of Iraq. Is Some of that Money finding its way to Los Angeles?

Back in 2003, before the US began its latest campaign to over throw the Iraqi government, Saddam's son arrived at the Central Bank of Iraq and ordered them to withdraw one billion dollars of US currency along with millions in euro's, marks etc. Here is oneof the many reports on this:
Saddam Hussein ordered his son to take about $1bn in cash from the Iraqi Central Bank just hours before the first bombs fell on Baghdad

What i would like to know is if the current US real estate inflation, and possibly world wide inflation that seems to correlate in line with that missing cash with this missing money.

Is it possible that these funds ended up in the liquid funds used to purchase real estate, driving up prices?