Historic Filipinotown, Los Angeles, as another example of real estate capital-driven arbitrage

In the same vein as the recent blog entry on the Parkdale neighborhood of Toronto, "'Real estate capital reproduction of space' in the Parkdale neighborhood of Toronto," the Los Angeles Times has an article ("As Historic Filipinotown gentrifies, imagining a different future") about gentrification in the Historic Filipinotown district, which historically had not experienced significant demographic change.

One of the interesting things pointed out in the article is how buildings under rent control actually represent a significant opportunity to increase rents, provided that expensive renovations are made.  From the article:

Surrounded by more expensive housing markets, Historic Filipinotown is one of the last places in central Los Angeles where cooks, housekeepers, Uber drivers and new immigrants can afford to live. Alumit’s mother, a nurse, and his father, a security guard, saved everything they had to buy a home here in 1978. The neighborhood’s median income of about $26,700 is about 40% of the county’s median, and about 95% of residents are renters.

But Historic Filipinotown’s affordability is also the source of its vulnerability. According to an analysis by the UCLA Law Review, about 620 buildings in the area are subject to rent control laws, which makes the properties more tempting to buyers because the potential profits from raising rent would be much higher.

I thought that was a very interesting point. It's not uncommon for improvements in rent controlled buildings to lag, because of the complicated regulatory process, especially if the buildings are locally owned.

But large companies with access to cheap capital see such buildings as an opportunity to rapidly increase rents if wholesale improvements are made.

See the Curbed LA articles:

-- "657 rent-controlled apartments stripped from LA’s rental market in three months," 2019
-- "Tenants sue Historic Filipinotown apartment building owner for harassment," 2017

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Interestingly, looking up the mentioned UCLA Law Review article, it turns out that the school organized a "clinic/class" on "Gentrification, Displacement, and Dispossession":

In Spring of 2018, a seminar at UCLA School of Law brought together a group of graduate students and law students to trace the current manifestations of the U.S. property law system to its historical origins. From it emerged this collection of pieces, in which students, professors, and practitioners examine the present-day effects of gentrification, displacement, and dispossession in and surrounding Los Angeles.

What a useful class!  Granted plenty of law schools offer legal clinic programs, which provide a lot of help to people within the served communities.  But law schools turn out a lot of scholarship too that is applicable to local situations, but rarely is this knowledge stream tapped.

Here's the full set of articles:

-- "Dispatches from the Other Side of Development" by K-Sue Park
-- "Living Poor in the Affluent City" by Scott L. Cummings
-- "Los Angeles, Displacement, and the Rise of Airbnb" by Alex Scott
-- ">Losing Historic Filipinotown by Ysabel Jurado
-- "Dialectic Episode: Reclaiming Land Use Law: Using People Power to Guide Development" Dialectic hosts Sunjana Supekar and Jason Lawler talk with Doug Smith, Ysabel Jurado, and Joe Donlin about the role of community planning in combating gentrification in Los Angeles.
-- "Protecting Mobile Homes as Affordable Housing" by Soham Dhesi
-- "The Limits of Land Reform: A Comment on Community Land Trusts" by Daniel Foster
-- "Public Land for Public Good: How Community Groups Are Influencing the Disposition of Public Land to Help Address the Affordable Housing Crisis" by Katie McKeon & Doug Smith
-- "Local Control of Land and Water Resources: Rethinking California’s Eminent Domain Standard" by Mia Lattanzi
-- "From Chavez Ravine to Inglewood: How Stadiums Facilitate Displacement in Los Angeles" by Laylaa Abdul-Khabir
-- "We Shall Not Be Moved: Practitioners' Perspectives on Law and Organizing in Response to California's Housing Crisis" by Tyler Anderson, Terra Graziani & Kyle Nelson