don’t think it has much to do with real estate but an already depressed mindset of the economy + the fires + the strikes + new economic stress has people spending less in general.
Luxury goods all over are down, so not a surprise that $75/pp nights out are also going down.
It’s weird- cause most people probably have the same amount of money or more than they had a year or two ago, but when you’re being told to fret, you fret and spend less. Happening now and happened in 2023.
fwiw my restaurant turns 9 this month and of all the costs that have skyrocketed in that time, nothing comes close to insurance. We probably pay more than 10x what we did in 2016, it’s way more of a drag than labor or rent or anything else.
I moved back to LA in 2004 after 10 years in NY and was immediately struck by the dearth of (for lack of a better term) “mid-tier” restaurants that had been so ubiquitous there. But there was an explosion of them later in the decade, I’d say spearheaded by the opening of Animal in 2008 (though tbh in retrospect they were for the most part opened by like two restaurant groups and one bartender lol). I’d put HLAY in this tier, and with the exception of maybe Republique and Bestia off the top of my head I can’t think of any from this era that are still around. I’m not sure if this is attributable to pandemic or any number of other factors, but it sucks.
My family makes the same amount but most general things have gotten significantly more expensive including groceries, general purchases, and dining out. I know it wasn’t over night but man, oof.
Yeah agree with this, everything is way the hell more expensive. Just paid $8 for a cold brew after a $1 tip.
This’ll place me politically but kinda feels like everyone’s blaming everything but capitalism. Common thread between insurance, rent, writers strikes, etc. Like come on, it’s rich people. Theyll always have enough (and frankly only more and more) money to eat at somni while normal people who go to HLAY for a birthday are gonna have a harder time justifying it.
The restaurant scenes are better in socialist countries?
I think increased prices are a confluence of inflation, rising labor costs/insurance, and also general price gouging that happens during capitalism but not on the part of the restaurants but the insurance companies etc.
Capitalism is what allows that to happen, yes.
Socialist countries aren’t immune from inflation and other economic problems, or from people and organizations with the power to exploit and profit from other groups doing so.
Like sure they’re not immune but it’s also not as prevalent/easy because it’s not the entire endgame. Kind of a gigantic difference.
LA statistically has the most predatory rent speculation in the country relative to median income (it’s not remotely close), is losing beloved middle tier restaurants (that survived COVID!) at an insane rate, whether by closure due to untenable costs or these weird life support adjustments that make them shells of themselves, while fine dining restaurants are making a comeback. Call me crazy, but
It’s not just restaurants, it’s other businesses as well who are being squeezed by rising cost of materials (Bags, software, fixtures), insurance (A huge one as @ronsilverado noted, specially as rates were frozen during Covid) and product. Landlords are also not re-upping leases. I know several businesses who had to suddenly move or close because of landlords wanting them out. It just happened to one of my favorite yarn shops in the valley. They said they were not renewing and needed to be gone in a short period of time. The business was going well and they just put in huge orders for the annual countywide yarn crawl.
Seems to me that whatever tax incentives landlords have to keep spaces empty interfere with the normal forces of supply and demand and keep rents artificially high (eg Robertson Blvd, the entirety of downtown Santa Monica). Don’t even get me started on the city block sized parking lot that sits unused in Frogtown…
Westwood. For years.
I don’t think there are any.
For real. I’m old enough to remember when the redeveloped 3rd St Promenade sucked the lifeblood out of Westwood (which was having problems with gangs, weirdly enough). 1989ish?
I’m obviously no expert and maybe it’s not a tax issue per se, but obviously there is some economic incentive to let a property sit vacant rather than lower the rent to where someone is willing to pay it. I’d love to hear your insights.
Mostly I thonk landlords hold out hoping to find tenants that will pay higher rent.
If they’re planning to sell buyers may prefer empty.
There’s no upside to an empty rental property, but if the owner can’t get enough to cover their costs they may be in denial for a while.
According to this Business Insider piece, banks may not allow landlords to reduce rents without coming out of pocket to make up for the reduced value of the property:
This is only one facet of a complex issue, but it was news to me.
Spent a lot of time unsupervised with friends in Westwood in the 80’s (middle school age) and never felt unsafe. Felt like there were a couple high profile incidents that got A LOT of media and scared people off. Westwood had a great vibe/energy back then that’s never really been replicated
That’s insane but it explains a lot.
Steep taxes on vacant spaces might help. Also maybe make it illegal for banks to require approval on leases?