The Mansionization of the West

Remember that scene in “Point Break” where Keanu Reeves and Nick Nolte are walking down a pier at the beach, both in suits, Keanu cuddling his waxed-up long board? It’s okay if you don’t, because this isn’t going to be about “Point Break” (sorry surfers!). It’s about the town where that scene was filmed. The pier they were walking on is in Manhattan Beach, California.

I have lived in Manhattan Beach on and off since 1996. Currently, I’m renting a mid-century tract house in the Liberty Village section of town, named for the returning soldiers who moved in after World War II. Originally a two bedroom, one bath house built in 1953, now an awkwardly stretched three bedroom rambler with about 1,000 square feet, the house is not in the best shape. The windows need replacing, as does the roof. The front yard is mostly wood chips and weeds (and sometimes mushrooms). But there’s a certain charm about the house—the creamy stuccoed exterior, the overgrown pepper tree that promises every year to send out a thick dusting of yellow pollen, the recently revived tree with profuse pink flowers near the front door. Mostly, though, the house is precious for its gigantic backyard and the old, verdant orange tree that has come into bloom.

Four houses to the West and three across the street are the same as mine, all mid-century ramblers, except with newer windows and paint and less weeds. And then there are these others…

They’re pretty enough, I guess. Some modern, some craftsman, some Italianate, some Spanish mission style. But it’s hard not to think the neighborhoods around here are being invaded by a friendly looking, dangerous alien species. The invading houses usually have three stories, 5,000 square-feet of space, immaculate landscaping in the front yard, and ten foot by twenty foot grass patches in the backyard for the dog/kid/patio furniture.

In the past ten years, these invading mansions have driven home prices beyond the reach of most average people. The house across the street from mine sold three years ago for $2.64 million. Since then, the house I’m in has risen in value so that now, the owner could sell today and get $3 million, old windows, cracked stucco and all. I spoke with a Manhattan Beach real estate agent who asked to remain anonymous, and he confirmed that in any other part of the country, this house would probably go for between $180,000 and $220,000. It was last purchased in 1984 for $184,000.

I recently heard a story about another Manhattan Beach resident, Robert, who grew up in what he calls “The Tundra” of Wisconsin, but has lived in Manhattan Beach since 1971. He had originally purchased a home in the Tree Section, the part of the city closest to LAX. “My first house was $29,000, about average for that time,” he said. Like most of his neighbors back then, he worked in aerospace and lived about ten minutes from work. “There were a lot of teachers here, too. Just regular, middle-class people, a lot of families. The houses were mostly one-story buildings, around thirty to seventy thousand dollars.”

By 1973, Robert was doing well enough financially that he decided he wanted a change of scenery. He bought a house in the Hill Section, the highest part of Manhattan Beach. His Tree Section house sold for $65,000 and he bought his new house for $71,000. “So, the value of the first house doubled in three years,” he points out, “and the new house wasn’t much of a stretch for me.”

The Hill Section house was 1.1 miles from the beach and had been built in 1957. It wasn’t spectacular, but it had the one thing Robert had wanted since he was a kid suffering the drudgery of a snowy walk to school. “I had ocean views from my deck. I could see Catalina on clear days. And there were some big houses all the way down the hill, but in between the houses, I could see the surf breaking at the beach.”

For seven years, Robert would come home from work, pour himself a scotch and soda, and enjoy his personal ocean view, reveling in how far he was from his Wisconsin roots.

Then in 1980, the neighbor directly behind Robert’s house petitioned the city to purchase two lots and combine them. The city granted permission, and in 1981, construction began on what would be the first mansion near Robert’s property. By 1982, Robert’s ocean view was completely obstructed by a three-story Spanish mission style house.

Within the next ten years, three more adjacent houses were torn down and what Robert calls “monstrosities” were put in their place. By 1993, Robert’s ocean view was reduced to a sliver of distant horizon seen through the adjacent neighbor’s deck walls.

And construction never stops in Manhattan Beach. When asked for her thoughts and impressions of the city, frequent visitor and Robert’s sister, Joanne, said, “My impression of the city? The constant sound of hammers and saws. The hammers only stop once the sun is down.”

“The city doesn’t give a crap,” Robert explained. “They just tell these builders to have a certain setback for the front and back and they can’t go over three stories, but they don’t care what the houses look like or whether they obstruct views.”

Because Robert is retired, he wants to stay in his house for as long as he can, but he doesn’t have the money to add on to his house or build a new one, and that’s the only way he could get his ocean view back. “I’ve lived in Manhattan Beach for almost fifty years, but if I were to come in today, there’s no way I could afford to buy a house here. Everything’s gotten so expensive, even just to buy food. It doesn’t seem right to me.”

Manhattan Beach is one of many, many Southern California cities whose liberal tear-down and rebuild policies have contributed to home value inflation and the current housing crisis. The policy even has a name. It’s called “mansionization,” where existing homes are demolished and new homes are built that maximize the total lot size. These houses are typically very large and are built with disregard for the surrounding neighborhood aesthetic. Not only do these large houses increase home prices in the area, it has a trickle-down effect on everything from grocery prices to haircuts, and residents on fixed incomes such as Robert are forced to pay a higher overall cost of living. Local businesses who can’t afford rising leasing costs close down and residents who rent are forced to find housing in cheaper, and sometimes more dangerous, areas.

The reason there hasn’t been any curbing to this kind of lot maximization has to do with California Proposition 13, which allows homes built before 1979 to be assessed at the purchase value of their home instead of its current value. Cities like Manhattan Beach benefit from mansionization because these larger houses are assessed at their current value and that means significantly more tax revenue. As an example, Robert’s house is assessed property taxes based on his $74,000 purchase price and he pays $1,900 a year. The house across the street from me has about the same current value as Robert’s house but was built in 2007 and they pay $24,983. So, when a city has the opportunity to collect over ten times the taxes from mansionized properties, what incentive is there to protect older properties in the name of community affordability?

Mansionization has become such a problem in California that in 2003, the state legislature mandated all cities and counties to write a General Plan that would address city aesthetics, transportation, environmental impact, and resident concerns. Manhattan Beach adopted their General Plan in 2003 and they address exactly the issues Robert has faced as a resident. In Policy LU-1-1, the General Plan promises that the city will, “Limit the height of new development to three stories where the height limit is thirty feet, or to two stories where the height limit is twenty-six feet, to protect the privacy of adjacent properties, reduce shading, protect vistas of the ocean, and preserve the low-profile image of the community.”

Robert’s take on this promise? “About thirty years too late with that one.”

However, as recently as April 11, 2018, the California Appellate Court ruled that even though Manhattan Beach’s General Plan states that the city will strive to “protect vistas of the ocean,” the city is not under any legal obligation to do so. In fact, in a recent article by The Beach Reporter’s David Rosenfeld, Manhattan Beach Councilmember Richard Montgomery says that if residents don’t like the idea of having their view obstructed, they should “buy the property in front of you,” an absurd suggestion for a longtime resident on a fixed income like Robert, or, Montgomery says, “you understand there is a possibility you can get blocked.”

For people like Robert who buy FOR the ocean views in Manhattan Beach, this lack of guarantee comes as a shock. Certainly, Robert said he would have thought twice about buying again in Manhattan Beach if he would have known his homeowner rights did not include the view he paid for.

Another statement in the General Plan is that, “New residential construction and home additions should reflect the scale and character of surrounding homes. Excessively large structures that are tall and bulky, with tight setbacks, and/or that exhibit limited architectural articulation along the façades or rooflines, can produce streetscapes that are aesthetically overbearing.”

Take a look at this photo. Is this house similar in scale and character to the surrounding homes?

This house was built in 2015. The original home looked exactly like the one next to it, a mid-century rambler. The original was razed and this was put in its place even though it is completely dissimilar to the surrounding homes. And at three stories, this house is taller and bulkier than any house around it, with almost no side yard on either side of the house.

There are other things in the General Plan that are not being followed, for instance providing housing for residents at all income levels (the lowest rent in Manhattan Beach is $2000 for a one-bedroom apartment) and encouraging diversity (Manhattan Beach is 80% white). We won’t know until the 2020 census whether the General Plan’s focus on building diversity has worked, but as recently as 2016, African Americans made up only 1% of the city’s population, Hispanics, 8.2%, and Asians, 9.6%.

So, what does this all mean? Southern California cities like Manhattan Beach have every monetary incentive in the world to encourage mansionization, and the trade-off for residents is lost views, limited demographics, and a skyrocketing cost of living. But restricting mansionization doesn’t have to mean stagnation for a city. In nearby Redondo Beach, their General Plan specifically encourages buyers to conserve and improve the existing housing stock and asks builders to assist in the development of affordable housing. The housing costs in Redondo Beach, while still expensive by national standards, are more affordable locally. More important, even with discouraging lot maximization and encouraging affordable housing, Redondo Beach has managed to grow over 12% since 2000, which suggests that the city is making its money back on lost potential property taxes with increased sales and local taxes. And in his Beach Reporter article mentioned above, Rosenfeld points out that Rancho Palos Verdes and Palos Verdes Estates do protect “ocean vistas” through ordinances that cover everything from new construction to shrubberies.

In the meantime, Robert has made it clear that he isn’t leaving Manhattan Beach. “I’m going to stay here until I die. And then whoever buys the house after me is going to tear it all down and finally get the ocean view I used to have.”