So, here's what's happening in the Pacific Palisades right now:

A pro-development organization has sued Gov. Gavin Newsom over an executive order blocking duplexes in Los Angeles neighborhoods stricken by January’s wildfires.

Newsom issued his order in July in response to lobbying from property owners in the Pacific Palisades, the coastal L.A. community that was largely destroyed in the blazes. Palisades residents argued that allowing duplexes and spitting [sic] lots into two parcels would undermine the neighborhood’s character and worsen evacuation efforts in the event of future disasters. Following the governor’s order, all the jurisdictions affected — the cities of Los Angeles, Malibu and Pasadena and L.A. County — banned SB 9 rebuilds in high-risk fire areas. The suit includes each local government as a defendant as well.

This is interesting.

On the one hand, there is, of course, a logic to not allowing too much density and too many close-together houses in an area prone to wildfires and where there are only so many roads leaving the community. But on the other hand, it's not clear that this is really what it's all about.

The counterargument, from groups like the one suing, is that this is actually about perpetuating exclusivity, and perhaps even about "cleansing" the neighborhood of households who don't have the means to rebuild in a way that suits the "character" of the place. Duplexes = rental homes. And smaller lots = less expensive houses.

So, which is it?

My view is that this should be looked at from an overall population standpoint, and not from a housing type standpoint. According to 2023 census data for zip code 90272, the Pacific Palisades had a population of approximately 21,438 residents. This is a decline of just over 10% over the last 23 years. (Source: U.S. Census Bureau Decennial Census 2000 & ACS 2023)

On top of this, the number of households has also declined from ~9,319 in 2000 to 8,282 in 2023. So by all accounts, the area is shrinking and becoming less dense. There are fewer residents and fewer occupied homes. This is a directionally good thing if your primary concern is evacuation congestion and the safety of residents.

But then, what's the concern with duplexes and smaller lots? Is the concern that the area might regain its previous population and household count? Is the objective to continue shrinking and reach some more optimal set of numbers? Should there only be 15,000 residents, or maybe even 10,000?

Because if that's the case, then I think a more effective policy would be: "This neighborhood can only support X number of residents and Y number of households, because otherwise people can't evacuate quickly enough in the case of emergency. Once we reach these limits, we will stop processing building permits for all housing types."

When a policy only restricts specific housing types, as opposed to more directly addressing a stated problem, it suggests to me that the stated problem is not actually the primary concern.

Cover photo by Beau Horyza on Unsplash

Before laneway homes were permitted as-of-right in Toronto, many people couldn't imagine them being a viable housing solution, let alone a desirable housing solution. I vividly remember some critics arguing that only people of questionable moral fiber would want to live in a laneway. Toronto's laneways were only suitable for garages, cars, graffiti, and degenerates, apparently.

If you're a longtime reader of this blog you'll know that I've always felt differently. In 2014, I wrote a post calling laneway homes the new loft. And in 2021, after Mackay Laneway House was finished, I wrote that "slowly but surely, we will start to think of our lanes not as back of house, but as front of house." I went on to surmise that, one day, our laneways could even become the more desirable side of a property.

I was reminded of this prognostication earlier this week when a friend of mine, who is very active in the multiplex space, was touring me through one of his construction sites. What struck me is that he said that on every single one of his projects, the highest-grossing suite is always the laneway or garden suite. It commands the highest rent and it's what gets the most showings.

This, of course, makes sense. It's a standalone structure, whereas the other homes in a multiplex building are not. And if you have the site area to do two storeys, these suites can become relatively large — oftentimes between 1,200 and 1,400 sf. Laneways are also intimate and largely pedestrian-oriented streets, so a nice place to live.

But there's some hindsight bias in this obviousness. It wasn't that long ago that most Torontonians couldn't imagine a "house fitting behind a house." It was an unthinkable solution that would ruin the character of our low-rise neighborhoods. Now we have planning policies that not only allow them, but that are, in a way, promoting an inversion in the way our low-rise neighborhoods function.

Toronto's policies allow up to six suites on the "front" of certain properties, plus a laneway or garden suite at the "back," for a total of 7 suites. The effect is that an entirely new single-family house layer is today getting built on our laneways. An alternative way to think about this is that it's like taking an existing single-family house, pushing it to the back, and then building a small "houseplex" in the front.

Ironically, all of these policies were born out of a deep desire to not change the character of existing neighborhoods. It's why no one would dare call these six-unit structures anything resembling an apartment. They are house-plexes, which are just like single-family houses, but with an added plex in the name. Nothing out of the ordinary to see here.

But our neighborhoods are changing and they will continue to change. The market is already speaking in terms of which new homes it finds most desirable. And in the end, that's a good thing. Change and evolution are features, not bugs, of cities. When Toronto stops growing and adapting, that's when we need to start worrying.

Back in 2014, I compared laneway housing to lofts because of the latter's origin story. When manufacturing began to leave cities and warehouses started to get converted to apartments, they were viewed as dangerous, illegal misuses of commercial spaces. It was housing that no respectable middle-class person would want to live in.

Then the opposite became true. Loft living became a symbol of urban cool, so much so that every new apartment somehow became a "loft." I'm not suggesting that Toronto's laneway suites are about to stage a global takeover in quite the same way, but some 11 years later, I do think it's following the same arc of desirability. The things we desire aren't as enshrined as they may seem.

Cover photo by Nikhil Mitra on Unsplash

In this part of the world, the people who take on the risk of building and who orchestrate the creation of new buildings are typically called real estate developers. That's what I call myself. But they can go by different names depending on where you are in the world and who you are asking.

For example, when a developer is raising money for a project, another term you will often hear is "sponsor." This emphasizes their role as the financial steward of the capital they are raising, as opposed to their operational expertise as a developer/builder. But in practice, they refer to the same thing. The audience has just changed.

In French, real estate developers are typically called something else: promoteurs immobiliers. This literally translates into "real estate promoter," and it speaks to one of the primary functions of developers, which is to initiate, sell, and generally push a project forward. So this is maybe a more accurate term.

The things being developed and promoted can also take on different names. I use the word "project" to describe a new building. Seth Godin has written a lot about this term, and he differentiates it from tasks: "Important work is project work." Meaning, it contributes to something bigger. So I like to use this term for almost everything I work on.

But in British English, it is common for property developers to use something else: "scheme." You'll hear things like, "our scheme contains 250 apartment homes with retail at grade." This word has always stood out to me as odd because I see it as having negative connotations. When someone is scheming, they're up to no good. Or maybe it's just because I'm not British.

Whatever your view, if we combine the French and the British terminology, we arrive at someone who promotes schemes for a living. Hmm. I'll likely stick to "developing projects," but I think the semantics are interesting. Like it or not, it says something about how development functions as an industry, and the skills necessary to participate in it.

Cover photo by aboodi vesakaran on Unsplash