The large home construction frenzy in east Venice is crowding out a way of life

By Martin L. Jacobs

The older, smaller Venice houses east of Lincoln Boulevard are being replaced en masse with speculative development of larger homes that maximize square footage and developer profits — but at what cost? Illustration by Tony Gleeson.

Despite years of pushback by residents and multiple city ordinances designed to impede it, the supersizing of single-family homes in east Venice can reasonably be called a frenzy.

The current spate of large home construction now exceeds 34 sites in the narrow wedge of Venice between Lincoln Boulevard and Walgrove Avenue. And that doesn’t include the 43 homes in this same pocket that have been completed in the last few years. Some streets appear to have a “developers welcome” sign out — notably Palms Boulevard, Amoroso Place and Appleton Way, which are sprouting clusters of large homes like teenagers develop acne.

Often this work is permitted under the guise of “remodeling,” a wink-wink classification characterized by a builder leaving one scraggy bit of wall standing from the old structure before building a new house around it. That’s what creates those Zillow listings with amusing incongruities, like a 2,800-square-foot post-war American Modern home with the year of construction listed as 1924 — 21 years before the war ended, 24 years before American Modernism was born.

Whatever you call it, the process is that developers or individuals find small older homes on large lots, scrape them away, build larger homes on spec, and then sell for unholy amounts of money.

It’s a business.

It’s a neighborhood.

It’s a business and a neighborhood.

 

East of Lincoln: The Place to Build

Stakeholders in Venice, Santa Monica and Marina del Rey have been enjoying a tantric property value orgasm for years now, but east Venice in particular has become ground zero for large home development. And anything east of Lincoln falls outside the more stringent zoning guidelines of the Coastal Specific Plan.

“Venice is a great place to build — especially east of Lincoln, because our lots are much larger, and the builders, developers, do not have to deal with the Coastal Commission. It saves time and expense,” says longtime Venice resident and real estate agent Laurie Woolner.

Granted, all of Venice has been a nexus for single-family home construction since the middle 1990s, about the time the term “McMansion” was first spat from a Venetian’s mouth. Walking to Abbot Kinney Boulevard you’ll see more green fence than a major league outfielder, and on many Venice curbs the roll-off construction waste bins outnumber the Teslas. In west Venice, however, the majority of the work is traditional expansion and remodeling.

Between Lincoln and Penmar Avenue, most lots are at least 5,000 square feet — a generous canvas to whet the appetites of architects and spec developers. And east of Penmar they get much bigger, with many lots close to 11,000 square feet.

Today’s east Venice hack goes thusly: buy a neglected two-bed, one-bath, 1,000-square-foot bungalow for $1.1 million to $1.5 million, scrape it, build something big (typically Modernist, because in its most basic variation Modernist is cheaper) and sell it for $3 million to $3.5 million.

The game is limited to those who can afford the buy-in and fund the construction, which is getting harder as prices for “tear downs” continue to climb. About a year ago, an old house at 1121 Nowita Place sold for $1.18 million. Seven months later, a virtually identical lot next door at 1117 Nowita Place sold for $1.42 million. Both were scraped. 1121 now has a spec home on the market. 1117 will likely be a predictable sequel. The price bump, however, was anything but predictable.

Woolner cuts to the chase: “Every sale is a new comp.”

That’s how fast this market is moving.

 

A Competitive Spec Market

We know the big players in the spec home game because we see the same names on the shingles out front. And there are alliances across traditional boundaries. Some construction companies have an alliance or partnership with a property developer. Some big real estate operators also develop properties. And they are all hungry for a certain kind of property; smaller, largely unimproved old homes on full-sized lots.

In a competitive spec market, developers get inventive and come up with unusual strategies to romance a property away from an owner, or just make it easy for owners to let go.

Woolner tells a story about a couple that called her one day with an emergency: “I was driving. These people called me up. They needed $300,000 right away, because they found a condo in Santa Fe that they loved and needed to close on in two weeks. So within an hour, I sold their house for a $1 million plus, and I got the developer to release the money before the close so they could do their deal on the condo.”

Venice real estate may look like a money-printing machine, but no one could call it easy work.

“They don’t make as much as everyone thinks — plus you’ve got the risk factor,” cautions Woolner. “The buy-in is larger. When a developer says to me [he’ll] buy it for this, build this big a house, at this much per square foot. … That’s how they figure out how much they’ll make….You buy the land. You’ve got 6.5% closing costs, you’ve got construction loans, you’ve got architects, you’ve got carrying costs, property tax and you have capital gains. … So if their buy-in already starts out at $1.5 million, and they’re selling it for $3 million, they walk away with maybe $200,000 to $300,000, if they’re lucky, with all that risk.”

And they aren’t always lucky.

“Those ones on Palms that couldn’t sell,” Woolner recalls, “and went into foreclosure — they were the worst homes ever. You could just walk through and see it. Bad floor plans. Bad construction.”

 

Big and Beautiful … Or Just Big

Some of the new large houses are architectural wonders — like the trio of homes on Morningside Way and Preston Way designed by Mario Romano; or one of my favorites, a Tom Carson modern on Palms Boulevard at Glyndon Avenue.

Many others are vanilla, even artificial vanilla. That brings us to the M word.

Mansionization: nothing de-beautifies a neighborhood like square footage masquerading as homes. In east Venice there are quite a few large boxy homes that are unselfconsciously style-free.

Like everything, it’s a bell curve. You’re going to get hack jobs and you’re going to get artistry. But it’s difficult to police.

The nonprofit Los Angeles Conservancy, long the city’s leading advocates for historic preservation, supported a renovation of the Baseline Mansionization Ordinance that took effect last March and closed some of the loopholes that gave rise to developer shenanigans.

Adrian Scott Fine, the conservancy’s director of advocacy, has seen what happens when construction of very large homes goes unfettered.

“This kind of construction removes perfectly good existing housing stock. It is often out of scale, out of character, and can destroy the pattern and feel of a neighborhood. There is the loss of trees, the loss of privacy… even the loss of sunlight,” he says. “There is also the issue of sustainability: throwing away these perfectly good homes and putting them in the landfill.”

In a city where creativity is highly valued, the conservancy encourages creative thinking — like room additions and remodeling — to satisfy the market’s desire for larger, more modern, more upscale homes.

UCLA Professor Vinit Mukhija, who chairs the Urban Planning Department at the Luskin School for Public Affairs, brings up the sociological implications of neighbors living in large homes fronted by garages rather than porches.

“Places like New York that are famous for [their] sidewalk ballet, that is partly because people have to spend time outside their homes. And I think in old parts of Venice that are denser, we do see a little more street life, social connections, use of public spaces,” he says. “And while it is less so east of Lincoln, probably this change in housing type will reduce it further.”

The issues surrounding large home development are perhaps more urgent today because many of the early (1950s and 60s) residents of Venice are aging out, passing on, or moving to skilled nursing facilities, leaving their homes vacant and on developers’ radar.

 

An Inheritance You Can’t Afford

Mukhija explains the limitations that children of longtime Venice homeowners often face.

“If people are getting old and they have a couple of kids, it’s impossible, I think, for these kids to subdivide this property, the inheritance, in any other way but to sell it,” he says. “In a more affordable part of town, one can imagine one sibling buying out the other sibling. But because some of these small properties are [valued at] a couple of million dollars, it’s not that easy for brothers or sisters to find any other way but to sell.”

The previously mentioned lot at 1117 Nowita Place used to be the Piñedo family home. The family had lived there since the 1950s. Mr. Piñedo passed away a few years ago, and Mrs. Piñedo recently moved into an assisted living facility. The family decided to sell the property.

The lot next door at 1121 used to be home to Jim Quaintance, who lived in it for more than 30 years. Retired and getting older (although he still rode a chopper down the street from time to time), his daughter persuaded him to sell, which allowed him to buy a condo down the street from her in Long Beach.

When aging occupants on limited incomes leave older homes in disrepair, it’s like painting a big target on them.

One exception is the Chavez home. Ray Chavez’s parents moved to east Venice in 1959. His mother died in 1969 and his father in 1994. The youngest of six boys, Ray was raised in the house he now occupies with his wife Rebekah and their beautiful newborn daughter. Steady work as an electrician in television allowed Ray to buy out his siblings and keep the house in the family.

I ask him if the construction of huge expensive homes on his block bothers him.

“I don’t mind people buying and renovating,” he answers. “I know it takes away a little of the nostalgia. … For me this was always the one place on the coast no one wanted to move to. Now, everybody wants to move here.… I don’t blame the people moving here. But I don’t want to feel inadequate because of status, like I don’t belong here anymore.”

That’s the downside of an influx of money and people with the resources to have a $3-million home.

I ask Woolner who these buyers are.

“Snapchat, actors, internet people, lawyers,” she answers. “Silicon Beach. It’s a lot of tech people … and about 20% are cash offers.

“Talking about the Westside, it was always rich. We always had doctors and attorneys and entertainment, record people — those kind of industry people. The tech people have added a bigger dimension of money.”

The trend also impacts long-term residents who are renters. Most of the spec homes sell to buyers who intend to occupy, and in cases where huge east Venice homes land on the rental market, lease rates are astonishing. There’s a four bed, four and a half bath mega-home on the 1500 block of Walnut Avenue listed for $20,000 per month!

 

Where Does It End?

Home prices in east Venice will likely continue to ascend, and this alone could eventually price developers out of a market they helped create. Much like cattle that have over-grazed a pasture, they will be forced to move on to greener fields, like Westchester or Torrance, that will earn them better margins.

Professor Mukhija suggests one solution would be to cultivate more multi-family properties in Venice, which is much more feasible now with the easing of two-on-one zoning restrictions. He believes that having multiple families living on adjacent structures on the same property could ease the housing shortage and increase density, strengthening the social fabric.

The conservancy’s Fine reminds us that a massive recode of all of Los Angeles’ zoning is now underway, with each neighborhood to be evaluated to determine its own specific policy.

“The recode is coming out with new residential zoning classifications — what they are calling single-family variation zones. Those in many ways are going to be stronger than the Baseline Mansionization Ordinance, but a lot of neighborhoods won’t get those for some time.”

One Wednesday when I am out tallying all the construction sites for this story, I see Ray Chavez carrying his baby daughter on a walk around the neighborhood, enjoying yet another warm winter day in our beloved community by the sea. It occurs to me that his little girl will have to learn about the old Venice from her father’s stories.

He’ll tell her about growing up here, how parents all let their kids roam the town with the only restriction that they be back in time for dinner. And he’ll tell her how much her grandfather paid for the house she lives in, and she’ll laugh at the impossibility of it.

 

Write to Martin L. Jacobs at martin@scriturra.com.

 

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