As the price of land soars ever higher here in California, city planners and developers are turning to novel solutions to maximize housing development on small lots. Having just navigated the sale of a 3-lot parcel in Los Angeles to a large multiunit developer, I know how complex and how rare it is for developers to be able to secure multiple parcels of land in a row in highly desirable neighborhoods. In fact, on the block where we sold 3 duplexes, a 4th owner held back, resisting the opportunity to sell. As a result, this one duplex property will be sandwiched between two large multistory apartment complexes…and its future resale value will likely decrease, due to the loss of privacy and increased density on both sides.
The City of Los Angeles has made the opportunity to build multiple homes on small units a more efficient way to generate the greatest utility/value for these small lots. The original law passed in 2004 has helped small lot developers like Modative and Minaret to provide new housing in a far more affordable and efficient way than the traditional 5000 square foot lot formula for a single house. US Dept of HUD Case Study for Small Lot Subdivisions goes into further detail on the history of the passage of the small lot subdivision ordinance in L.A. Approximately 2500 of these small lot subdivisions have been built since the ordinance passed.
I recently helped a young couple purchase their first home: a gorgeous tri-level modern 3-bedroom property on the Culver City/L.A. border. With central air, plenty of glass for natural light, two-car garage, clean and modern design, and other amenities including a ten-year warranty from the home builder, my clients were able to buy brand-new construction in an increasingly hot neighborhood (a short walk from Helms Bakery and the new Culver City Expo train stop). In comparison to this newly constructed house, existing single-family homes at the same price point in the same neighborhood are significantly smaller and in need of major repair including upgrading electrical, plumbing, roof, as well as updating of the kitchen and bathrooms. Meanwhile, once my buyers scraped together the fairly hefty down payment, they essentially moved into a turnkey home, which required little if any upgrades. A NEST thermostat and Ring video doorbell were installed to prevent having to run up and downstairs to adjust the a/c and see who is at the front door.
More of these small-lot subdivision single family homes are coming online via developers who specialize in such development are bringing them to market. There has been some pushback from residents who may dislike the modern style as being disruptive to the existing neighborhoods’ architectural heritage, or complain of rental units being lost to homeowners, but in Los Angeles where sprawl has reached its limits and the need is urgent to increase density, I would anticipate that many more such small lot subdivisions will be popping up all over town.