Real Estate Markets: Understanding The Sectors

This week while exploring the blogosphere, I decided to look into the beliefs of one of the most famous real estate developers ever, Donald Trump (pictured to the right). Additionally, I decided to look at the Manhattan real estate market and how it is doing during this sluggish time. There are few people that have been able to achieve what Trump has on such a large scale, which is very intriguing to me. While searching through many very interesting posts, I came across two that drew my attention because of their approach despite the current market situation. As many people know their has been some debate on the stability of real estate markets in the United States right now due to the current situation involving the market and the rates. So the first post "Resort/Second Home Sales Should Prosper in Current Real Estate Markets," was published by the Trump University Blog, written by Brett Carmen who is a veteran in the real estate industry. His post talks about the movement of people that have money who will move away from renting and into buying in certain sectors because of how the market is situated. The second post "Manhattan Apartment Prices rise in 1-Q-2008," was published by Mitchell Hall who is a successful New York Realtor. His post talks about how despite the sluggish market, prices in Manhattan are still increasing. In the first post I will address the issue involving certain sectors that will thrive during this time of slowing markets. In the second post I will interpret the ever increasing prices in New York for housing. Both are interesting situations and I have left my comments on each of these blogs below, as well as on the individual's blogs.

"Resort/Second Home Sales Should Prosper in Current Real Estate Markets"
Comment:
First off I would like to thank you for your interesting post on the potential of certain real estate sectors being able to thrive during this pronounced recession by the Feds. As you stated "the demand for goods and services is still high and the wealthy still have plenty of money to spend on discretionary purchases," I completely agree with this assessment. As a potential investor it is not hard to understand that the markets will turn around eventually, it is just a matter of waiting it out. If you have the money as you suggested it is a great time to buy these extra homes or resort condos while the prices are down and the builders or sellers are desperate to unload the properties. Like you said it is obvious that this is the time that casual renters will begin to move away from renting and will lean towards purchasing these properties for personal use or even just an investment. Another great point you made was the foreign investment into these resorts is definitely apparent as we continue to see more and more foreigners coming over to United States for investment opportunities as well as getaways with the value of the dollar falling. One place that this is very much apparent is Las Vegas, every time I go there I feel like a foreigner with 20 different languages being spoken at all times. Do you think that there is going to be more foreign bought properties and condo's than American Investors? Also how long do you feel it will take the housing market to rebound and what effect will that have on the resort and second home sector? Personally, I feel that this is a great time to jump on this sector of real estate if you have the money and the opportunity, and you will not regret it as the market regains property values. Thank you again for your insightful post and it will be interesting to see how this real estate sector plays out.

"Manhattan Apartment Prices rise in 1-Q-2008"
Comment:
I would like to first thank you for your intriguing post on how the prices of condos and apartments continue to increase even with the slowing market in Manhattan (aerial view of Manhattan below). This is a very interesting post, because with the current slumping market situation it is fascinating to hear that the average price of an apartment increased 33.5% compared to the same quarter last year. That seems outrageous with what is happening with the market right now that the average price would be $1,700,000 for an apartment in Manhattan. It is obvious as you state that "prices are up sales are slowing and inventory is rising". How do they expect to get people to pay these increases in prices when people can see all the units are not selling? It is interesting that you mentioned the interest from foreign buyers with the fallout taking place on Wall Street, it seems like foreigners are taking advantage of our market with the falling dollar and the market situation. Is it a good thing if citizens are not able to buy the apartments and condos and it's all being bought up by foreigners? Another significant move was the 86% increase of a 4 bedroom plus co-op that rose from around $6,900,000 last year to $12,900,000 this year. That certainly is a major increase even for wealthy, but how do you expect to attract New York buyers with that type of an increase in this recessionary market? Even the median price of a one bedroom apartment rose 12% from $699,000 to $750,000 this year. Truly I do not think this is the best move for the New York property owners to make if they want to generate buyers within the city. Yes, they will still get the foreign investment but I do not know if that is enough to over come the ever increasing build up of unsold units. Thank you for your interesting post again and I guess time will only tell as to the outcome of the current market.

Redesigning Mexico: Bringing the Living Standard Up

For the last ten years I went to Mexico at least once a year and throughout these travels I have seen the need for some redevelopment within the country. Even in the nicer districts, one cannot help but notice how run down certain areas are and how families live in poverty and do not have decent hospitals or schools. There is a company called GEO, the number two home developer in Mexico that has decided to try and tackle this problem. GEO has teamed up with the Mexican government to take empty fields in six different locations within the country and transform them into full thriving cities. GEO's founder, Luis Orvananos (pictured right), has traditionally focused on building neighborhoods on land just outside of the cities in Mexico. This plan is not working anymore because they try to build affordable housing and since land prices are going up they are not able to build these homes at such a price anymore. This has led to the need for a new direction of development, which has come to light with the vision of Orvananos. These new cities that they are attempting to build would include a minimum of 100,000 new homes, industrial parks, retail districts with brand new malls, new schools, new hospitals and the other essentials of a full fledged city. One of the areas that they have already started to build in is a small town called Zumpango, which has a current population around 127,988 and within eight years it is expected to exceed 600,000. While they build these huge mega projects, they do stand to make a lot of money, but they have pledged to continue selling these new homes at a price of less than $40,000 each. Considering the average income in Mexico is around $7,000 a year, this would be a tremendous effort to put people into homes and create a place for them to attain jobs or find better paying ones.

As Orvananos said, "This will be the launch of a new side of GEO," and as one would believe there is a lot of risk in making a large move of this size. Considering until now, the fact that big projects they have done in the past and ones that they currently are working on have only amounted to about 15% of their companies capacity. Now that these developments are taking over the majority of their time and business, Orvananos feels very confident that they should be a success, which he addressed in a press conference "With the infrastructure being put in by the government and us, plus the alliance between the industrial, commercial and housing segments, we've got potential to make the business successful". With everything going as planned and having the necessary backers for this project, the revenues for GEO are projected to be over $420 million in the fourth quarter. This would allow GEO to expand by about 14% this year and 20% annually after that, which would give them the ability to reach out to more areas in which to build and expand the development in Mexico. As a whole this project could help jump start a prolonged shortage of housing for Mexican citizens, while being very profitable from a developer's point of view.

Upon graduation I want to be a developer and from that stand point this is an amazing project if they can pull it off completely. Considering the shortage of homes in the country of Mexico and the current amount of poverty that surrounds it citizens, this could possibly begin a turn around for the country. As a developer it stands to potentially make a lot of money, as well as do something very important for the economy. These are projects that I like to see, because they give back to a country and not just continue to cater to the needs of the rich. Considering Mexico has a population of just over 103 million people, it is terrible to consider the number of people living in poverty (picture to the right is the type of homes most citizens live in). It is estimated that 14% to 35% of people depending on whether they are in cities or rural areas live below the poverty line. In addition to this it is estimated that around 12% of the population lives on less than $2 dollars a day. Think about the potential that these six mega projects could bring about and if they flourish what would stop GEO and other developers from starting more of these cities. To take land that has nothing on it and create brand new cities with amenities that some Mexican citizens have never seen is something that could help change the whole dynamic of Mexico and help reduce the poverty tremendously. As Orvananos put it "They'll have education, recreation, hospitals, shopping and jobs"; what more can the people ask for?

Penetrating The Web: Acquiring Useful Sites

Throughout this week I spent many hours in the blogosphere searching for interesting and relevant real estate sites that would potentially bring useful insight to my readers. With so much information on the subject of real estate encompassing areas of: residential, commercial and industrial development it is difficult to separate the great websites from the good, but by using Webby awards and IMSA criteria I feel that I accomplished what I set out to do. This week's ten linkrolls are situated to the right and I hope that my readers find the sites extremely interesting and valuable.

To start evaluating these sites let's take a look at Appraisal Institute. This website has very helpful information on current issues and reforms taking place in the real estate market. In addition to that, they make it very easy to navigate through the site and it is aesthetically pleasing. One thing they could try would be to incorporate some more interactive qualities, but besides that it is a very educational site. Next is a website called Building which is not very appealing to the eye, but is a great site for information on development occurring around the world. They are up to date on projects and issues involving the entire real estate market. The website is very easy to navigate through but could definitely be enhanced by some interactive and visual qualities. This is a great site if you are interested in keeping up on real estate in a global perspective. Third is a site called CCIM which is an amazing site for finding any commercial real estate listing in the world. In addition to that it gives great links to gain knowledge on commercial real estate. The great layout on the home page makes it extremely easy to navigate through. The only thing I would recommend is to add some interactive parts which would help the site draw more attention to itself. Besides that, it is a great site for finding everything you need to know about commercial real estate. Moving on we go to Commercial Real Estate Direct which is a very informative site on transactions and stories involving commercial real estate properties in the United States. The site is very easy to navigate through, but is lacking in the areas of: visual appeal and interactiveness. Other than that it is a site I recommend if you want to stay informed regarding the top commercial real estate deals happening in the United States. Equally interesting is GlobeSt which is a domain for national and international real estate. This site is one of my favorites when it comes to staying on top of transactions and potential deals. They have a great layout with a decent amount of interactiveness compared to other sites. They have done a very nice job with the website, once again this site could also use some more visuals. Next is a website called Land which is not one of my favorites, but for a developer it is very helpful. This site lists all lands and commercial properties for sale and for lease in the United States. The site has very simple structure and once again does not have very much to look at. It lacks all interactiveness, but survives a purpose and is a great site if you are searching for land to develop or for properties to take over. In the same field is NAIOP which is a site based around industrial and office properties listed in the United States. This site gives exceptional news on available properties and what is happening in the field. The layout is sufficient but once again lacks any visuals and interactiveness. I would recommend this site if you are interested in being informed of industrial and office properties that are or will become available. Next is one of the most interesting sites that I went to called NAREIT. This site represents the publicly traded real estate firms and what transactions they are working on (to the right is a picture of what an index for the stocks would look like). It is extremely interesting and lets you see another side of the real estate market where people can invest in the bigger real estate companies. They have made the site very easy to search and navigate through, but like most of the real estate sites it also lacks in visuals and interactiveness. I highly recommend this site and it adds a little something unique to my linkroll. Another intriguing site is RISMedia, which is a news source for all real estate. It has great coverage and is always up to date. The site is very easy to navigate through because of the layout, although it does lack visuals and interactiveness which is a common occurrence with real estate sites. This is a great site to check daily because it is always updating and I would recommend that people take a look at it. Finally, there is a website called THE REAL ESTATE MEDIA NETWORK which is an exceptional site. It is actually the website for a real estate magazine. They make it very easy to navigate through and it has decent visual appearance. It is very interactive by allowing you to click on a digital issue of the magazine, as well as being very informative on everything happening in the real estate market. I would also highly recommend this site to anyone interested in real estate. In contrast to the majority of other real estate sites it does not really lack anything and is one of the best sites in the linkroll.

Redeveloping Bayview-Hunter Point: To Keep or Get Rid of Affordable Housing?

Currently there is some noise being made about the redevelopment project of Bayview-Hunters Point in San Francisco, which is a state owned development area of affordable housing. The area is not flourishing and many of the buildings occupied by tenants are falling apart. This has resulted in the San Francisco Housing Authority to come up with a redevelopment plan called SF Hope. To be able to fund the whole project, the government has elected to go ahead with both private and state funded development. Unfortunately, this has created controversy on how much of this new project should be for market-rate homes versus affordable housing. Although this project will not be able to succeed without the private development taking a large portion of the plan, it is necessary for the builders to be willing to address the issue of enough affordable housing, because it is in the best interest of the community and they still stand to make a large amount of money.

Right now one of the private companies, John Stewart Co. has pledged to build 267 public housing units along with 90 affordable housing rental units, as well as more than 300 market rate homes. These homes would be priced between $600,000 and $800,000. The ground breaking of this project has been scheduled for next year. Another private company Lennar Corp. is seeking to remake part of the area with new homes, industrial and commercial space, 400 acres of parkland, shops and a new 49ers stadium. Lennar Corp. has also made a pledge to the lower income community and said "25 percent of the project's housing 8,000 to 10,000 housing units would be priced below market rates". They have also offered to completely rebuild the Alice Griffith public housing development (which is pictured here to the right).

The issue at hand is that many people believe that half of the new homes being built should be rented or sold at below the market rate to keep it affordable. These people rallying for affordable housing have gained enough support with the backing of Chris Daly who is the Supervisor of District 6 to bring this issue to San Francisco's June Ballot. The developers feel that if passed this will kill the whole project and ruin the redevelopment plan of Hunters Point. Daly is making the claim that "If we don't set aside a significant percentage of that land to be affordable for everyday San Franciscans, then lets be honest with ourselves, 20 years from now everyday San Franciscans aren't going to live here". What he is referring to is a need to keep the housing affordable to people earning 30 to 80 percent of the city's median income, which is equivalent to $64,267 for a family of four. I believe that this is a true assessment of the situation and the government needs to realize it is the best interest of the citizens. His other argument is that these companies are going to make hundreds of millions on this redevelopment if it goes through and that they can afford to help out the people by creating more affordable housing for the average citizen.

Another argument against the current position of the redevelopment is stated by Ms. Fleming a 60 year old grandmother who has lived there since she was nine, "They're finding all kinds of reasons to put us out of here". At one of the buildings 110 of the 267 units are already boarded up and the city is putting pressure on the remaining families to be evicted. This is arising from circumstances such as being late on rent or according to the evicted tenants the city is trying to find other reasons to have them removed. The issue is that the city and developers say they will be creating the subsidized units along with the market-rate homes, but the people who are now living in this affordable housing feel that they will never get a chance to move back into them after the redevelopment (a concept of what the projected area will look like pictured to the left). Currently most of the tenants in one of the buildings are paying the Housing Authority between $100 to $400 a month. These are people that can barely afford that and according to the Housing Authority this apartment complex owes $200,000 in back rent. Truly, the community does not believe that they are going to have no place to live once this project is underway as well as when the affordable housing is done, if it is not brought up to half of the total of what is built.

In my opinion, this is a very interesting situation. I feel for these people and their situation, as well as the private developer who tries to gain the largest profits possible. This is not the best neighborhood and the redevelopment is necessary, but this ballot should still be passed. If it is not, all they are doing is getting rid of the minorities in that area and making it more difficult to live in an already over priced area. The profit margin will still be high enough with 50% of the housing being priced at market-rate and by keeping the other at an affordable range it only helps maintain the community as a strong and well rounded place. It seems like the city has good intentions but at the same time they need to make sure that they do more to help out the average citizen. With the median family only making around $64,000 a year in San Francisco how can they expect these families to afford $600,000 to $800,000 homes. In addition to that the current tenants can barely make the $100 to $400 a month rent payment. San Fransisco is trying to take the most lucrative deal possible to help themselves since there is a lack of payment from the current tenants. Hopefully this ballot will be passed which would tremendously help the current tenants once the redevelopment has taken place.

The Exploration of The Web: Finding Quality Sites

This week in the blogosphere I decided to not just bring up issues relating to real estate development, but rather bring quality real estate development sites to my viewers attention. It is difficult to narrow down to ten enlightening websites, but by using Webby awards and IMSA criteria, I truly believe these are sites that must be looked at in this field. Although this was initially intended to be for my viewers, it also made me aware of very professional websites. The ten websites that I will be addressing in this blog are situated in the linkroll to the left. I hope that you find my interpretations of the websites useful and that it will stimulate enough interest to want to go view the sites.

To begin the evaluations let's start with the American Planning Association. This is a very educational site on planning issues that are happening throughout the United States with regard to development (to the right is a picture of potential green urban development). The structure of the site is laid out nicely and has great functionality between links. This is a site I would recommend that people take a look at but it could use some improvement in the area of interactiveness, which it is currently lacking. Next the BOMA is a great site that takes a look at development on a local level as well as the international level. It is extremely informative on issues of sustainability and how to approach new developments. Once again this site lacks in interactive ability, but makes up for it with its context and well designed structure. I would say that this is a good site to look to for information, but not one of my favorites out of the ten. Third is a site called Cyburbia which is not very visually pleasing but does have a nice structure and is easily navigable. The information is interesting but somewhat on a smaller level of urban planning. It lacks all interactiveness which would make it much more interesting to visit. Once again I would put it on a level of an interesting site but not quite as good as some of the others in the linkroll. Moving on to the FIABCI, this site is a tremendous site to look at real estate development on an international level. It has great visual appearance and decent interactiveness. The information is interesting and easy to navigate through. I would say that it meets all of the criteria very well and I would rate it towards the top of the list for sites to use. Equally interesting is LUPIN, a California land use government website. Given that we're in California the site gives all the information you need to know on zoning and laws for development. It has great structure and is extremely easy to navigate through while using the links. Although, it does not have any real interactiveness and lacks visual appearance, but I would recommend this site for anyone who would like to stay updated with California planning and development laws and guidelines. Next is my favorite site of all the development website Planetizen. This is an extremely enriching and educational site on all issues of planning and development happening around the world. It is one of the most updated sites and has great structure, which makes it easy to scroll through. It does lack visual appearance and interactiveness which I have found most of these sites do. I highly recommend this site and it is my favorite. The next site I would like to talk about is Project for Public Places. This site is more visually pleasing than others and is broken up nicely so it is easy to navigate though. Structure wise it is great and talks about cases all over the United States. Like the other sites it does lack in interactiveness but has very interesting case studies. This is definitely a must visit site. Another interesting urban design site is Resource for Urban Design Information. This is a great site for looking at urban design of areas and building on an international level. It has sufficient structure and is easy to navigate through. The information is very relevant, but lacks the visual and interactive aspects. I think it is an interesting site, but could use some improvements to make it more visually appealing. I would place it toward the middle or bottom of the ten linkroll. Next is a site called Urban Future and it is one of my favorites in the aspect of information. It has a good break down of information by state and issues. The structure is perfect and makes it very easy to navigate through. I would definitely recommend the site but once again as with many of the other development sites, it lacks the visual appeal and interactiveness. Last is the Urban Land Institute. They did a decent job of trying to make it visually appealing but like the others it lacks the interactiveness. It has great structure which makes it easy to navigate through. The information is on a local level as well as international aspect, which makes their issues and stories very interesting. Overall it is a great site and I would rank it towards the top ten of the linkroll.

Developers: Are They Over Doing It?

Just recently have I entered the blogosphere, but what I have found on real estate development has truly kept me intrigued. There is so much always happening in this field that it makes it enjoyable to search through blogs that offer up interesting insight on what is currently going on and soon to be underway. In my last post I talked about how the city has decided not to allow for the rezoning of industrial land for residential use. So I thought it was only fitting to talk about two projects in the Los Angeles area for residential use that have been under some debate lately. The first post "Westside Condo Project Promises More Gridlock, Disparity," is published by RedFin Los Angeles real estate agent Cindy Allen. Her post brings up the issue of plugging in more high rise luxurious condos in Century City and whether the market can withstand these super expensive buildings. The Second post "Conquest Banned For Even Thinking About USC Housing," was published by Dakota Smith the editor of Curbed LA. In this post she talks about the ruling by the courts to not allow Conquest housing to monopolize housing around the USC campus and allow for the University Gateway Project to move forward (a Conquest advertisement to the left). As one can see, there are projects going up all over Los Angeles meeting different types of needs for living, but there is always debate and issues revolving around every development. In the first post there will be additional talk about whether the market will continue to slow down. Where as in the second post, questions have been addressed about monopolizing the market so that other developers are unable to come into the area. Both are very prevalent issues and interlocking in many cases. I have offered my comments on each of these blogs below, as well as on the individual's blog.

"Westside Condo Project Promises More Gridlock, Disparity"
Comment:
First off, I would like to thank you for your interesting insight on this proposed project in Century City. As you stated, a 45-story 177-unit building in Century City that has been designed by French architect Jean Nouvel does not seem like the best option at this time (the shiny inserted building at the right). In my opinion, with slumping markets and the already over priced homes in Beverly Hills, I do not feel that "one of the most expensive residential buildings in the west" makes sense. The developers claim it will attract the European and Asian elite along with the rich Westside mansion owners to sell and move into a one of a kind building. Yes, maybe you will get a few ultra rich people to give up their mansions to live in a prestigious 30 million dollar condo, but I would not push the envelope. I agree with your assessment that this could potentially over build the market for the need of high end condos. Especially with the other nearby proposed projects of a 252-condo development on Wilshire Boulevard in Beverly Hills and the other two projects that make up almost 800-condos in Century City that have been proposed. With the amount these investors have paid for the land which seems to be between 400 and 500 million for each site, what will happen if they cannot find enough people to buy the condos? This could potentially add to the already huge problem with the market, creating a lot of losses. Do you see all these projects going forward in the near future or do you feel some of the investors will realize that there is just not enough market for these types of huge condo buildings at this time? I am all for development and luxurious condos but right now it seems like this could be a bad move on the developers part to believe that he can fill 30 million dollar condos with such an ease. Like you have suggested, I guess time will only tell.

"Conquest Banned For Even Thinking about USC Housing"
Comment:
Being a student at USC, I would like to thank you for your knowledge on the issue surrounding USC housing and Conquest. You have made it apparent to me that Conquest housing will no longer be able to hold a monopoly on current limited market of housing around the USC campus. As you state "A settlement reached today permanently prohibits Conquest Student Housing from interfering with housing projects near USC". This is a very big deal because the prices for apartments around USC are pretty absurd to have to be paying as a poor college student. As a student, I am paying 1,200 dollars a month not including gas or electricity. Allowing for these other projects to come into the areas, such as the Urban Partners project with USC to build the University Gateway, will help lower surrounding prices of apartments. It has not been a secret that Conquest has kind of taken over and kept other developers from being able to enter the area. You have made it clear that all law suits have been dropped by both sides, but if Conquest makes any missteps the Court has the power to impose sanctions. I was not aware that the Gateway Project is going to house 1,600 students and now I understand why Conquest was trying to interfere and litigate the development. Do you think that Conquest will continue to try and use unlawful actions to stop other developments from coming in or do you think that they will allow for things to take their course? It is understandable that they want to keep profit margin high, but to abuse the power is just not right. Along with that, do you think that prices for rent of apartments will change for the better or worse with the development of new buildings? Hopefully, as you state, the Gateway project is the first of many projects to help revitalize the area surrounding the USC campus.

Industrial Land: To Convert or Not To Convert

Recently the industrial sectors of downtown Los Angeles have come under fire from the Mayor and City Council. Some industrial landowners have asked for the opportunity to rezone and sell their land to developers for residential use. The issue at hand is that the City Council with the backing of the mayor have denied this grant to most developers because of the potential job losses that would occur. Although it may be more profitable for industrial landowners to sell off their land to residential developers, it is not in the best interest of Los Angeles due to potential job loss.

On January third of this year the Los Angeles City Planning Department released a memorandum regarding their intentions and how they plan to pursue the industrial situation in the Los Angeles community. The result which denied the request for the rezoning in Employment Protection Districts was met with much animosity by local residential developers. The plan that has been developed by Gail Goldberg (pictured at the right) who is the Los Angeles City Planning Director and Cecilia V. Estolano who is the Chief Executive Officer of Community Redevelopment Agency demonstrates how to approach this issue in the next twenty-four months as well as in the long term. This issue will have a significant impact on whether or not the Los Angeles economy will continue to grow and thrive in the years to come.

There are major consequences that could arise from the conversion of this industrial land to residential use. According to Goldberg, in the last twenty-five years there have been a million new residents to California but we have lost over 57,000 jobs. This brings up a very important question of whether or not the city should sacrifice additional vibrant industrial land that could help fix this job loss or should they allow the building of residential areas. Obviously, this is not an easy question to answer but the Los Angeles City Council has taken the direction that it will only create a bigger problem for people trying to find jobs. According to Goldberg, twenty percent of the industrial land already has been compromised and will not be able to be salvaged for industrial use. Looking at it from that perspective illustrates the need to fight off the big player developers trying to work their way farther into this industrial area. Supporters of the conversion to residential land believe that the city is only doing this to keep their sales tax revenue from disappearing. Although this may play a part in the final decision, it is not a main contributer. Goldberg makes it very clear that industrial jobs versus service jobs creates a situation that keep people in the middle class. The difference in wages is twenty-nine thousand for retail jobs versus the forty-seven thousand a year for the manufacturing jobs that are available right now.

This impact would create a huge problem for the middle class and people trying to jump into the middle class. The memorandum has set out strict guidelines for the short term and long term goals for the city of Los Angeles. They want to give the opportunity to more industrial companies to move into vacant areas and to redevelop these areas in hope and promise of additional jobs and the increase of the middle class. Truly if you look at the statistics that Goldberg presents this is the only viable option and direction for Los Angeles to take, otherwise it could potentially create a large recession within the city (Downtown Los Angeles to the right). According to the Redevelopment Agency, these developers were asking for nineteen thousand acres to be rezoned which is about eight percent of the city.

Although many people do not agree with the Mayors' and the City Councils' decision, it is difficult to overlook the burden that this rezoning could potentially have on the economy. Just because powerful real estate developers see the opportunity for big bucks in developing land for residential use does not mean it is the best answer or in the best interest of the rest of the people in the city. For example New York and Chicago have kept strong industrial sectors and continue to thrive and are good role models for cities such as Los Angeles that are redeveloping their strategy. On the other hand, cities such as San Francisco have allowed the industrial land to be turned into residential housing, creating a lack of middle class jobs and an area only the rich can afford to live in. Los Angeles previously looked at each individual situation on a case by case basis but now the potential impact is too large. This new approach which has a two year assessment, surely is only the beginning for the potential increase and improvement which will occur by adding more industry to the Los Angeles area and which in turn will help it thrive.

The strategic long and short term plan allows for the necessary improvements and investment into the industrial market. The City Council listened to arguments from both sides and made the decision in the best interest of the entire city and not just wealthy developers. Now all that needs to be done is for the plan to be followed through and implemented which should help regain and surpass the previous loss of jobs over the last twenty-five years.