November 18, 2024 #1 Local News, Information and Event Source for the Century City/Westwood areas.

Column: The Inevitable Conversions Begin Multiplying

By Tom Elias

It’s a phenomenon from New York to Dallas to Fresno and Los Angeles, one that seemed inevitable to some from the moment millions of Californians became the first Americans ordered to work from home as a way to fight the spread of COVID-19.

That pandemic is not yet over despite the public being fed up with it. Covid’s viral variants still dog the world as their third winter of plaguing humans begins to wane.

But millions of white collar workers who got a taste of setting their own hours and creating their own work environments still resist going back to the office more than once or twice a week. As a result, office building vacancies now cover hundreds of millions of square feet in California alone.

The empty offices made it obvious from the pandemic’s first onslaught that apartment conversions would become a major part of the solution to California’s housing shortage, if not its dominant answer.

Now that is becoming reality, the only inexplicable thing about it being the fact it has taken three full years to morph from obvious concept to major reality.

This is how real the conversions of office buildings have become:

The rentcafe.com website reports that more than 4,130 apartments and condominiums will be created through conversions of office space this year in Los Angeles alone. Another 1,000-plus new units are planned this year in Fresno, with more than 500 more coming in San Francisco, 450 in Sacramento and about 200 in Oakland. Even cities that have never gotten into this game are now active in conversions: 372 converted units are due to open in Alameda this year, 250 in San Clemente and 250 in the San Pedro section of Los Angeles, not counted in the city’s announced total.

Altogether, at least 10,000 new units will open for residential use in former office space before the end of this year.

None of these conversions will be very controversial, as they take up no new ground space, do not alter existing neighborhood views and profiles and therefore don’t provoke the environmental lawsuits that hold up so many California building projects, including a major annex to the state Capitol.

For sure, many more units will follow, especially when this year’s already-permitted crop begins drawing significant rents and purchase prices. That is a virtual certainty, as the new units vary from street-level apartments with significant exterior noise to ocean -view penthouses.

The number of units underway debunks naysayers who claimed when the idea first arose just after Gov. Gavin Newsom issued the nation’s first stay-at-home orders in early 2020 that conversions would be more difficult to get permitted and built than new construction.

That’s been untrue, especially since the state passed a law last fall making such permits virtually automatic when applied for.

Objections that office floor plans are completely different from residential ones have been quickly overcome, as necessary plumbing and electrical changes, plus moving drywall barriers around within existing indoor spaces, proved less complex than some expected.

What’s more, the conversions are already becoming fiscal godsends for beleaguered local governments whose property taxes were beginning to fall as office building vacancy rates stayed up. So long as office rental revenues dropped, so too could assessed valuations which control the amounts of property tax money coming to local schools, sewer and water districts and other local governments.

But when the converted units are sold, they become subject to Proposition 13’s 1 percent tax on the most recent purchase price of any property. While commercial property tax rates usually remain relatively stable for decades, residential taxes can rise rapidly when units change hands.

At the same time, the conversions are starting to rescue real estate investment trusts, whose office rental income was dwindling, as were the dividends they pay investors. That’s all happening as onetime office space finds new, productive use.

The bottom line: Office conversions, first recommended by this column in April 2020, are now the wave of the future in California and elsewhere, and they are a boon to everyone from first-time home-buyers to renters to property owners and local governments.

Email Thomas Elias at tdelias@aol.com. His book, “The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It” is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net.

Related Posts

Baby2Baby Gala Raises Record $17 Million to Support Families in Need

November 16, 2024

November 16, 2024

Event Honors Charlize Theron at the Pacific Design Center The Baby2Baby nonprofit organization held its annual gala on Saturday, Nov....

Court Halts Order for Expedited Veteran Housing in West LA, Citing VA’s Budget Constraints

November 13, 2024

November 13, 2024

Former Governor Arnold Schwarzenegger Criticizes the VA on Veterans Day The Ninth Circuit Court of Appeals has temporarily paused an...

Baby2Baby Gala Raises Record $17 Million to Support Families in Need

November 10, 2024

November 10, 2024

Event Honors Charlize Theron at the Pacific Design Center The Baby2Baby nonprofit organization held its annual gala on Saturday, Nov....

Elon Musk and Grimes House Hunt in Bel-Air for Property Amid Reports of “Family Compound”

November 7, 2024

November 7, 2024

Billionaire and His Former Partner Are Reportedly Searching for a Los Angeles Mansion Billionaire Elon Musk and his former partner,...

Police Seek Suspect in Vandalism of Jewish-Owned Businesses in L.A.’s Pico-Robertson Neighborhood

November 5, 2024

November 5, 2024

Authorities Investigate Series of Early Morning Attacks as Hate Crime Police are actively searching for a suspect accused of vandalizing...

Brentwood’s Beloved New York Bagel Co. to Close After 21 Years at Topa Town & Country Center

November 4, 2024

November 4, 2024

Local Favorite, Designed by Renowned Architect Fred Gehry, Must Vacate by December 31 By Dolores Quintana New York Bagel Co.,...

Judge Grants UCLA Temporary Return to Jackie Robinson Stadium After UCLA Promises to Pay More Rent

October 30, 2024

October 30, 2024

UCLA Regains Stadium Access Through 2025 Season, but Veterans’ Advocates Criticize Agreement Judge David O. Carter has reversed his previous...

Kanye West Buys $35 Million Beverly Park Mansion in Exclusive Beverly Hills Neighborhood

October 29, 2024

October 29, 2024

The 20,000-Square-Foot Estate Comes Just After West Sold His Gutted Malibu Home According to property records, rapper Kanye West, now...

Governor Gavin Newsom Allocates $827 Million to Combat Homelessness Statewide

October 29, 2024

October 29, 2024

New Funding Aims To Create Housing, Expand Shelters, Enhance Support Services Governor Gavin Newsom announced $827 million in new state...

Rapper Lil Durk Arrested on Federal Charges in Alleged Murder-for-Hire Plot

October 27, 2024

October 27, 2024

Rapper, Five Others Face Federal Charges in 2022 Beverly Center Shooting Grammy Award-winning Chicago rapper Durk Banks, known as “Lil...

Dodger Fever Takes Over LA: Pink’s Hot Dogs, Cardinale du Vin Join World Series Celebration

October 23, 2024

October 23, 2024

LA restaurants, Including Randy’s Donuts, Rally Behind The Dodgers After the Dodgers clinched their spot in the 2024 World Series,...

Cassia and Rustic Canyon Host Collaborative Dinners to Benefit the Southern Smoke Foundation

October 16, 2024

October 16, 2024

This Weekend Creative Teams of Chefs Will Spice Up Santa Monica For One Night Only Two of Santa Monica’s favorite...

AFI Fest 2024: Horror Films to Take Center Stage During the Four-Day Festival

October 15, 2024

October 15, 2024

Supernatural Thrillers, Psychological Horrors, and Dark Comedies at AFI AFI Fest 2024, presented by Canva, returns to Hollywood from October...

Menéndez Brothers’ Murder Case Under Review for Potential Resentencing, New Trial Considered

October 3, 2024

October 3, 2024

District Attorney George Gascón Cites New Evidence Ahead of November 26 Hearing Los Angeles County District Attorney George Gascón announced...

Judge Orders Closure of UCLA’s Jackie Robinson Stadium Amid Veterans Land Lawsuit

September 26, 2024

September 26, 2024

U.S. District Judge Pushes UCLA and Brentwood School to Resolve Issues Many people in West Los Angeles have been wondering...