Thursday, June 02, 2005

The Sad Truth About L.A.

The following article, copied from the Los Angeles Daily News, expresses the sentiments I have known and felt about L.A. for a long time. No matter what happens out here where I've moved, I don't think I can ever afford to come back.

Daily News link

California, off they go; can't afford a home, you know

By Mariel GarzaColumnist

Wednesday, June 01, 2005 - Today I say goodbye to Jean Dobbs, a good friend who's finally given up on housing in California. Tonight, she is planning to board a red-eye at Los Angeles International Airport and say so long to the overvalued West Coast, bound for her roots -- and her first taste of home ownership -- in North Carolina. Jean watched in dismay as the median housing price soared out of her reach in Los Angeles County and across the state. For a couple years, Jean kept thinking: "It can't keep going up." It did.

As of April, the median home price in California reached a half million dollars. The price in Los Angeles County is only slightly lower, at $485,000. The national average is $203,000.
Half a million is tough to swing for anyone, even young professionals like my friend who don't have family money or a high six-figures salary. Few people under 40 -- even white-collar professionals -- can easily come up with $100,000 as a down payment, then shell out $3,600 a month for mortgage and property tax.

Of all people, my friend Jean should have been able to afford a house. She is executive director of New Mobility, a national lifestyle magazine for people with disabilities, and its spinoff books and magazines. It's a job she does from a home office, and she could live almost anywhere.
When the reality sank in that Jean couldn't afford much more than a shack next to a cattle farm in the Central Valley or a double-wide trailer in the distant High Desert of California, she widened the scope of her search. By about 3,000 miles.

I am sad to see Jean go. But -- I'm chagrined to say -- the same forces that priced her out of this market are making me rich. Well, maybe not really rich like billionaires Eli Broad and Bill Gates. But rich compared with the former me: a poor kid who grew up a no-savings, credit-card, in-debt renter. Now I am still cash poor, but land rich. Jean was still thinking about home ownership in the abstract three years ago when my family decided that it was time for me to buy and loaned me the down payment. I was literally just in time. A few months after I bought my modest two-bedroom house a few blocks from Dodger Stadium, I could no longer afford my neighborhood.

After eight months, my house had gained $83,000 in value. Two years later, $125,000. By now, I have so much home equity that I could probably sell my house and use the proceeds to modestly live out the rest of my life loafing around the beaches of some third-world country.
Simply by my good timing, I am a "have" in California, while my friend on the same rung of the socioeconomic ladder is a "have not." Jean's not my only friend in this situation. I could pen a long list of friends and colleagues -- young and creative professionals all -- who despair of ever having the means to afford that particular slice of American pie as long as they remain in California.

Jean's new house in Wilmington, N.C., is a sweet, yellow building more than 150 years old. It's an officially designated historic home with a plaque of its history mounted next to the front door. The two-story house has stained-glass windows and gables and polished wood floors. The quiet street just off her front stoop is made of cobblestone, and it leads to the Cape Fear River two blocks away. The warm waters of the Atlantic Ocean are 10 miles away. For all this, Jean paid less than $300,000 -- in fact, within $3,000 of what I paid for my tiny stucco house in a now-hip former barrio.

Prices like this may be one of the reasons why North Carolina's population has become one of the fastest-growing in the country, much of it because of people moving in from other states. Jean picked Wilmington because she decided it was revitalizing -- thanks to affordable prices, a charming downtown and the relocation of some white-collar employers. The mild weather and lush landscapes probably didn't hurt either.

On those hot smoggy days in Los Angeles, when I'm fighting traffic to get to the crowded grocery store and trying to avoid road-raging drivers who might be packing, it's tempting to follow Jean's example and get out. But it's a heavy decision. I know that if I leave, it will be a very long time -- if ever -- before I can afford to come back.

Mariel Garza


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