Commercial real estate industry insights.

Is Downtown L.A. Embracing New Urbanism?

by bbgres_admin | May 2, 2017

Los Angeles is the second-largest city in the U.S. based on census population data yet, for decades, its downtown lacked the look and feel of a “real” city. The sine qua non of urban life—density, walkability, night life, verticality—were conspicuously absent. A series of major developments began to breathe life into downtown L.A. as far back as the 1980s skyscraper boom, but it’s the projects currently underway that will accelerate Downtown’s urbanization and cement its big-city cred.

Building Boom

DTLA is in the midst of its largest construction boom in nearly a century owing to an influx of foreign investment and its emergence as a hot spot for tech and creative firms. Recent and current construction includes towers that will significantly alter L.A.’s skyline, including September’s completion of Wilshire Grand, now the tallest building west of the Mississippi. More towers are planned, most notably the three high-rise buildings that will anchor Oceanside Plaza, scheduled for completion in 2019.

Soaring buildings and impressive skylines aren’t necessarily New Urbanist concepts, but skylines make cities postcard-worthy and are an inseparable part of their identity. Fortunately for L.A., an archaic fire-safety regulation requiring buildings to be flat-topped for helicopter evacuations was dropped so the spire-crowned Wilshire Grand could move forward, ending an era of “architectural mediocrity” and setting the stage for the City of Angels to morph into the City of Angles.

Rising Urbanism

Downtown’s construction boom also includes retail, hotels, offices, mixed-use developments, restaurants, and condos and apartments. Living close by to work, shopping, entertainment, and mass transit is a New Urbanist ideal that’s gaining traction, even though the city has long been considered “the capital of car culture.”

What does L.A.’s urbanization mean for its future? Already, L.A. is confronting the predictable but intractable problems that most big cities face—a dearth of affordable housing; displacement of lower-income tenants; discussions about the need and relevance of parking structures (including alternatives to the ubiquitous “parking podium”); balancing new development and preservation (it’s tricky).

“Because of the cost of construction and land, any new residential project has to be geared toward higher-end,” says Mike Abergel, managing director of BBG’s Los Angeles office, following BBG’s acquisition of Abergel & Associates in March.

With thousands of rental units under constructions, “there have been some concerns that Downtown L.A. is getting overbuilt,” Abergel says. “Time will tell, but if that’s the case I think we’ll see a gradual pullback or slowdown as opposed to a sudden and complete stall-out.”

That’s especially likely since voters defeated Measure S in March, which would have put a two-year moratorium on large-scale development projects.

Bottom Line

Growth in Downtown L.A. is happening swiftly but sustainably. Downtown is putting in place all the elements that transform it into the kind of city Millennials flock to, but Downtown development—to paraphrase GQ magazine—is not a bet on “hipsterism.” It’s a bet on urbanism as the way of the future.