New Study Charts Growth of WeHo’s Eastside and Calls Out Challenges

The dramatic evolution of West Hollywood’s Eastside is likely to continue, but with challenges posed by the lack of parking, small lot sizes, a saturation of the retail market and a disparity between residents’ incomes and apartment rents.

That’s according to a detailed study of the area by Rosenow Spevacek Group (RSG) that was commissioned by the city as part of its Eastside Community Plan.

“While some of the blighting conditions noted in 1997 still ring true today, such as parking inadequacies and small parcel sizes, other issues such as minimal incentive for investment and a low real estate transaction rate have changed dramatically, placing the Eastside community at a crossroads where it can make some strategic choices about its future that weren’t available 10 or 20 years ago,” the RSG study states.

A report by the city’s Community Development Department, quoted below, sums up key elements of the RSG study:

1. The Eastside real estate market is strong … Over 15 years, the assessed property value of the Eastside grew by 181 percent from $409 million in 1997 to over $1 billion in 2012. These

The southeast corner of the  Dylan apartment building on Santa Monica Boulevard and La Brea Avenue (Photo courtesy of Ball-Nogues Studio)
The southeast corner of the Dylan apartment building on Santa Monica Boulevard and La Brea Avenue (Photo courtesy of Ball-Nogues Studio)

investments laid the groundwork for the recent boom of private investment to the area (e.g. the Huxley and the Dylan apartment buildings, expansion at the Lot, Movietown and Domain/Faith Plating), which when taken together have an estimated worth of $400 million. In the last 10 years, over half (54 percent) of commercial properties were sold in the project area, suggesting a strong interest in owning commercial real estate in the Eastside.

2. Average household incomes for Eastside residents (around $30,000 a year) are lower than (that of) their neighbors in Los Angeles and other parts of West Hollywood (around $55,000 a year). Despite lower than average incomes, the cost of housing in the Eastside is high, with studio-unit rents ranging from $1,300 in rent-controlled units to $2,500 in new market- rate buildings. Lower than average incomes and high rents limit disposable income that could be spent in the area on dining, shopping, and other services.

3. The Eastside population is changing. The young professional population (25-44 years) is growing, while the elderly population (over 65) is declining. The Russian-speaking population is also shrinking as Eastern European immigrants age and no new immigrant population is entering the Eastside to maintain that presence.

4. Most people are commuting to and from the Eastside; only six percent of the employed Eastside

Jones bar and restaurant on Santa Monica Boulevard at Formosa.
Jones bar and restaurant on Santa Monica Boulevard at Formosa.

population lives and works in the area. While the Los Angeles region is known for its “jobs-to-housing mismatch,” where a high percentage of the population leaves (its) neighborhood to commute to work, the Eastside jobs-to-housing mismatch is particularly high. Approximately 94 percent of employed Eastside residents leave the area for work.

Census data shows that a high percentage of Eastside residents work in the arts and entertainment sector (typically a higher paying sector) and commute to jobs in downtown L.A., Burbank, Studio City and Century City. This differs from the data on Eastside employees, many of (whom) work in retail (typically low paying jobs) and commute from East Hollywood, Koreatown, the Valley and Beverly Hills. New high-end office development and apartments in the Eastside may help reduce this imbalance.

5. Asking rents for retail and office space in the Eastside are below the city average. Rents on the Eastside are comparable with Culver City, Burbank, Hollywood and Downtown L.A., but are lower than Santa Monica, Beverly Hills and the greater West Hollywood area. However, vacancy rates for retail and office space on the Eastside are very low, showing strong demand for space and a potential for rents to increase.

6. Rents for new residential and commercial space are significantly higher than those for existing buildings. New buildings in the area offer a wide array of amenities for tenants (e.g. gyms, screening rooms, communal kitchens for cooking classes). These amenity-rich buildings will attract a new demographic of residents and employers that can afford higher rents.
7. The Eastside market for retail and restaurants is saturated. In other words, there is almost no unmet demand for retail shops on the Eastside with the exception of auto repair and parts shops. The surrounding area is also saturated with retail shops and restaurants. This suggests that new shops and restaurants seeking to be successful in the Eastside (must) meet a special niche or have cache.

8. There is some clustering and job growth in the information, construction and real estate sectors. There may be additional growth and clustering in production-related industries that are synergistic with the new creative office space tenants at the Lot (e.g. Will Farrell’s “Funny or Die” production company and the Oprah Winfrey Network).

9. Future development and business expansion may be hindered by small commercial lots with dispersed ownership patterns, aging building stock with few amenities and constraints on public parking to serve businesses that cannot provide parking on-site.

Facade of proposed new building on The Lot, viewed from Santa Monica Boulevard (Design by Studio One Eleven Architects)
Facade of proposed new building on The Lot, viewed from Santa Monica Boulevard (Design by Studio One Eleven Architects)

The area known as the Eastside is defined by Hayworth Avenue on the west and La Brea Avenue on the east, extending for several blocks north and south of Santa Monica Boulevard. Historically its 340 acres have been viewed as the rundown sector of relatively affluent West Hollywood — a place stereotyped by the presence of prostitutes, homeless people and sidewalk robbers and small shops opened by emigres from Russian-speaking countries in the former Soviet Union.

What has begun to change that is projects such as the Dylan and Huxley apartment buildings and apartment buildings under construction at Movietown Plaza and the former Faith Plating lot that will add a total of 900 new rental apartments and 111,000 square feet of retail space. The RSG study projects the Eastside’s population may jump from the currently estimated 10,060 people to 11,500 by 2020. Another factor in the area’s growth is The Lot, the former Pickford Studios, where a single office development will add about 200,000 square feet of office space for the creative industries.

  1. Greedy landlords. No affordable housing. Wah wah wah. I want more special interests and entitlements. I want others to pay for me so I don’t have to. I am a socialist who want to leach off of others’ hard work. Wah wah wah

  2. @Shawn Thompson: Is this the same city council you’re referring to that turned the formerly blighted (YES BLIGHTED) east side into a vibrant, safer more interesting neighborhood with a more distinct flavor?
    I’m sure you miss those hookers and transients defecting on your front yard, but most of us love the new east-side and are eagerly anticipating new neighbors, restaurants and businesses…..not to mention over 100 new low income/senior/disabled units.

    And by the way, La Brea is zoned for up to 10 stories.

  3. I think the major point in all this is our LONG TERM WEHO CITY COUNCIL MEMBERS are to blame for the FORCED DENSITY on the east side. They CHANGED the zoning laws with out public request to allow there DEVELOPER CAMPAIGN donors to build six stories and HIGHER. The east side was sold away to the developers. If i was the guy who owned the carls junior one story lot that now has a MEGA APARTMENT box now in its place it would be a great christmas for me,
    The weho democracy is broken. Out of town money in running our city council and city hall

  4. Alison isn’t completely wrong. Landlords are taking advantage of lower income individuals. Prices for these small, unkempt complexes are ridiculous. You’re lucky if you can find a studio for $1300 which is really ridiculous. On top of that…most rentals don’t even come with appliances like a refrigerator. I think the era of landlords that provided renters with a home to live in have all now become slumlords that are only interested in lining their wallets and providing as little as possible. We are now just numbers to them as they try to attain as much wealth as possible.

  5. Alison, your section 8 rent went up because of the Federal Budget impasse last year…no landlord gets to “decide” that they can just raise rent while part of the Section 8 program. I know it sucks & there are many West Hollywood tenants who are having extreme difficulty with the increase in rent that the Federal government mandated this year.
    As for affordable housing, for those of you that are kvetching about the new developments that have opened on LaBrea……10% of each building are permanent housing for very low income residents & 10% are permanent housing for low income residents. The project going in where Faith Metal Plating Company was, same thing. Movietown Plaza will have 72 units of permanent senior affordable housing. So, The City of West Hollywood in my mind is doing an extraordinary job of creating permanent affordable housing. Remember, that all privately owned housing in The City, while under rent control, the landlords have the right to go out of the rental business and remove those units permanent from the rental market…and we’ve lost 1000 units in the last ten years because of the State of California law, the Ellis Act (which trumps WH law), that allows for this.
    And as far as the retail market being saturated, perhaps yes, perhaps no, but with the changing demographics on the Eastside, as one generation passes on or moves out, those moving in, whether into market rate or affordable housing, will probably have different desires for the retail and restaurants services in our neighborhood….just a natural progression.

  6. Brian nailed it (except for his opinion on the building next to McDonalds–I think it’s a nice break from the boxy Dylan and Huxley).

    The disappearance of Russian businesses along SMB is not at all surprising and it has nothing to do with non-support of mom and pops. Its a nearly direct result of those shops not making improvements to keep customers coming in. I would love to spend money in those shops but there is really very little incentive. The shops are dingy, unfriendly to non-Russians and run down. What an opportunity for creative small businesses to reinvent that stretch of SMB. Best example of this is Max & Moritz General Store near Formosa. Fantastic little gift and home store.

    While the new buildings are not ground-breaking design, they’re very high-quality with great amenities, which ultimately is most important to people renting in those buildings. In a few years, you won’t even notice those buildings, they will just become part of the fabric of the neighborhood.

  7. What all these new developments on the East Side has done is given all the landlords the idea to raise the rents sky high whenever they have the opportunity. Some without doing anything to the apartment to upgrade it. Therefore they are pricing out the long standing residents.

    As a Section 8 tenant, I just got hit with my share of cost more than doubling to almost 60% of my income. I’ve lived here 36 years. An $255 rent increase, all at once. Nice.

  8. Happy to see the long overdue attention paid to the Eastside. Development and modern housing all good things. As a nearby home owner I couldn’t be happier to see the dreaded SaMo Blvd. stretch between Gardner and La Brea catch up with some of neighborhoods. That said, not much impressed with the designs thus far: the Dylan and that hideous and ridiculous looking building next door to McDonalds. What is that crap!? I’m hopeful Movietown Plaza and Domain (formerly Faith Plating) will add to the aesthetic senses. Bottom line: it’s better than what was there – I’ll take it. The Russian Mom and Pop stores along the stretch between Curson and Fairfax look run down. These businesses (or property owners) need incentives to keep their properties looking better, updated. Much like the horrific looking apartments that run up and down Fountain Ave. Where is the pride!?
    The Eastside has been ugly and neglected far too long. It’s time for a revolution and it appears one is upon. Keep it coming. More more more. Out with the old and in with the new. Ditch the blight; send the failures packing; and make way for innovative businesses that will drive new dollars to the Eastside. We need to keep all of the City fresh and moving.

  9. Good points Larry. Continuing to let the monopoly playing non visionary developers define the community is a very bad move often enabled by the planning commissioners lack of
    backbone. Mr. Altschul, who continues to wax on about stunning and iconic perhaps could perhaps use a vision exam. Cohorts Mayor d’Amico and Mr. Guardarrama were, I believe, sitting while this awful stuff entered the pipeline.

    Check out any charming community shopping district and you will find independent stores and restaurants defining the ambiance whether it be Pasadena, Culver City, Montana Avenue, Brentwood. Abbot Kinney, Malibu and beyond. That is what helps define the spirit of a community.

    Weho consistently gives us bars, bars & restaurants and more bar/entertainment venues enabling patrons who live in modern cubicles to inebriate themselves into traffic or recovery centers conveniently located. A perfect ambulance
    chasing development concept.

  10. Since when arts and entertainment a high paying sector? I think you are mistaking it with banking, which is common.

  11. I think the development on west side of Fairfax north of Melrose is an excellent example of a developer curating appropriate direction of retail. That development has probably the best mix of restaurants and retailers I’ve ever seen in a project of that size. I really envy the people in that neighborhood and I sincerely hope the developers on the east-side take the same care and thought when leasing those spaces.

  12. Was it really necessary to mention the small russian owned stores as an example of a rundown area, in the same breath as prostitutes, homeless people and ‘sidewalk robbers’?

    That sentence may be endemic of how some people do not understand the appeal that the “mom and pops” have to many residents here. There is an underlying thread in this study that presupposes a necessity to make the Eastside more like the rest of WeHo.

    The challenge as I see it: What are the elements that make the Eastside unique and different that should be supported and enhanced by any new development? We don’t want to be just another generic area. Oh yeah and what’s the plan for impending traffic gridlock again?

    We want smart development. I agree with Lynn, Todd and Larry.

  13. I agree with the above comments….especially regarding the “design” of the new developments. I would suggest that none of them would have been so overwhelmingly applauded if they had been projects for the west side of town. I do believe that it is time to put a HOLD on any thoughts for more buildings on the EASTSIDE. Until such time as there is some reasonable discussion about traffic….yes, the inevitable traffic! I know it IS inevitable but do we really need to keep adding and adding to it?

  14. To expand on point #7: {there is almost no unmet demand for retail shops on the Eastside with the exception of auto repair and parts shops. This suggests that new shops and restaurants seeking to be successful in the Eastside (must) meet a special niche}

    We have tried to lease space at the Dylan for a new BlockPartyWeHo store only to be told ‘restaurants only’ if we want a ‘retail space’ we have another property at Fountain and LaBrea. There is a resistance to ‘mom and pops’ and the developers want AAA tenants – which are larger corps, with deep financials. But a character of a neighborhood is often defined by the mom and pops and smaller local businesses.

    Oprah @ the Lot will add a new dimension and better jobs helping to balance the income disparities if many of these employees look for local housing. As pointed out above 54% of the commercial spaces have changed hands in the latest RSG study which was presented over a month ago at the Eastside Working Group. Our neighboring communities have about a 28-32% churn rate over the same period of time. Bottom line, lots of investment in the Eastside. Years ago we heard ‘not enough investment on the Eastside’ Now some say.. “Look whats happening its over-development” Bottom line, macros forces such as cheap money and low interest rates are driving development all over and the Eastside of West Hollywood is prime real estate.

  15. “Blight:” translation – anything that isn’t a big new ugly box towering over Santa Monica Blvd.

  16. Even with all these market rate rentals coming on the market, I don’t see much relief for affordable housing in West Hollywood. If you worked at The Lot, you might be able to afford these expensive new units (check out how much it costs to live at The Dylan!). Then you could walk to work and not worry about the traffic.

    But with all the new housing and increased commercial development, I don’t see any solution for the already gridlocked streets around La Brea/SMB or Fairfax/SMB. No subway. No light rail. And I don’t see BRT working on this stretch of SMB. I agree with Lynn – these new projects are pretty ugly and unremarkable and unfortunately West Hollywood is stuck with them for a very long time. (I think The Dylan’s vertical eyelash is already looking a bit dirty.)

  17. Challenge 10: The new development for the most part, is an assault on our aesthetic sensibilities. Tha planning commission went way off couse not insisting on a higher caliber of design. These hulking edifices will not age well and at certain times of the day the angle of light reveals the lack of craftsmanship and finishing. Unfortunately the eastside is stuck with mediocre and a mediocre gateway is never a good move.

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