About Luis


Housing is Organic

Mammals need shelter. In this respect, humans are no different. Although there is a tendency to make a distinction between the needs of humans from other mammals, our fundamental needs are the same. It can be reasonably argued that human life is a more sophisticated process, but over emphasizing this notion often leads to the kind of hubris that is detrimental to society. A major source of the aforementioned detriment is the false belief that humans have the capacity to control complex systems. We must accept that there are forces beyond our control. Accordingly, we must learn to respond to these forces in an appropriate manner. The following is a brief exploration of the conflict that exists between the nature of human housing and jurisdictional policy.

Housing is essential to human life. Human life is an organic process with a number of continuous changes and adjustments that are made rapidly from one moment to the next in response to changes that occur within the mental and or environmental circumstances in which humans find themselves. The previously mentioned adjustment process also applies to housing, in that a family needs to modify their housing, in order to accommodate changes to its circumstances, such as; a death in the family, the addition of a family member, or a change to its finances. Conflict arises when jurisdictional policy is too rigid to properly deal with the dynamic nature of human life in general and housing in particular.

A number of people inhabit unpermitted buildings, or construction improvements that suit their needs, but are unable to bring these improvements into compliance, because local jurisdictional policy inhibits the process. There are buildings with a current use that is unapproved, even though the current use is better for all stakeholders, including the owner, the neighborhood and the city. In some cases even city employees will unofficially concede that a project is an asset to the community and as such, is very likely to be approved, yet the official process for doing so can be so costly, that bringing the building into compliance is unfeasible.

A major reason for jurisdictional inflexibility is due to their ignorance regarding the principles of economies of scale. There are many natural reasons why large firms have lower unit costs than small firms, but jurisdictional policy often places additional pressure on smaller firms, families or entities. A manifestation of said pressure can be observed in some jurisdictions, where the threshold fees charged for a zoning adjustment are not proportional to the scope of the project.  When an owner of a 2 unit building is compelled to pay fees comparable to those required of a developer looking to attain a similar zoning adjustment for a 20 unit building, this places an unfair economic burden on small operators. Should a retiree that owns a duplex and lives in one unit, while using the rent from the additional unit to get by, be kept in non-compliance because they don’t have the same economic resources as a big developer? The aforementioned scenario would indicate that at times the policy is substandard, not the building.

Most people would find it absurd to have a jurisdictional policy that regulates; when, where and how a bird should build its nest. This kind of top down management doesn’t work for birds, because a bird is privy to information regarding its needs, to which policy makers are unaware. The same scenario applies to people. Jurisdictional zoning policy that ignores the needs of families and individuals will lead to conflict. When good people break arbitrary laws to accommodate their needs it’s probably time to reexamine the policy. There are many millions of dollars worth of buildings in California that are not properly permitted due to toxic jurisdictional policy. Clearly some unapproved buildings and construction modifications simply need to be demolished, but there is a substantial stock of buildings that are both well built and good for the community. Local jurisdictions need to be open to assisting owners in bringing good buildings into compliance.

Aesthetics and Architecture

We are endowed with aesthetic sensibilities that are often difficult to articulate. Webster’s’ defines aesthetics as “the study of the mind and emotions in relation to a sense of beauty”. Our neurobiological processes relating to aesthetic assessments frequently cause us to provide inadequate explanations as to why we find something beautiful. Our tenuous grasp of aesthetics has caused many to work towards a better understanding of the subject. In 1795 Friedrich Schiller completed his essay “On the Aesthetic Education of Man”. In this work he elaborates on the meaning of aesthetics and its significance in society with respect to artistic endeavors. What follows is a brief exploration of the meaning of aesthetics and its implications for art and architecture.

A salient feature of aesthetics is its intractability with respect to language. It is often difficult to put into words one’s appreciation of a thing’s aesthetic qualities. In his book “Inner Vision”, neurobiologist, Semir Zeki suggests that our incapacity to use language in order to describe a thing’s aesthetic qualities is perhaps due to the fact that the portion of the human brain that deals with aesthetics evolved millions of years prior to the development of language. This seems to indicate that from an evolutionary perspective it was less crucial for our prehistoric ancestors to be able to explain why they liked something, than it was for them to take action in order to attain that which stimulated them. On occasion we become intensely attracted to someone, yet we are unable to clearly explain why. We are being compelled by subconscious cues, and the odds are that if these feelings exist then they probably provide or at the very least provided us with a survival advantage. In other words, if you are drawn towards someone or something, but you can’t provide an explanation for these sentiments; it does not automatically follow that there isn’t a good reason for your feelings. There might be a very good reason why you feel the way that you do, even if you don’t know the reason.

According to Schiller a thing can be evaluated based on four parameters, which include: physical, logical, moral and aesthetic. Schiller held that something can be aesthetically pleasing independent of the other three criteria. Aesthetic assessments differ from the first three criteria in that an aesthetic judgment usually pertains to a thing as a whole as opposed to individual aspects of that thing. This can be illustrated in evaluating the work of the composer Richard Wagner. A term often used in relation to Wagner’s work is gesamtkunstwerk, which means “artwork in its entirety”. In experiencing an opera, such as “The Ring”, one might enjoy the sound of the music, be dissatisfied with the logic and or moral tone of the work, and yet find the gesamtkunstwerk deeply moving. This is precisely the emotion that a great work of art elicits; it should be deeply moving.

The previously mentioned biological and philosophical aspects of aesthetics provide us with a basis for understanding our process for evaluating the buildings that we use. In assessing the quality of a building we can separate the buildings features into two basic categories: the tractable and intractable. The tractable consists of variables such as; the size and adjacencies of rooms, the integrity of the structure, and the comfort of the interior environment with respect to lighting and temperature. These are things that can be objectively evaluated. Accordingly, we can say with confidence whether the building has succeeded in meeting the requirements associated with these variables. However, there are other variables that can’t be evaluated as objectively, such as a building’s form, color and texture. The aesthetic impact that the composition of these elements has on the users of the building is intractable. All that can be said is that if a building user is pleased by the gesamtkunstwerk, then the building has succeeded within the context of that person’s aesthetic sensibility.

A building user might be unable to put into words why they find a building aesthetically pleasing. Contemporary society often regards those that are unable to convey their sentiments via language as unintelligent, but in some domains language itself is primitive in comparison to the information contained within our sentiments. If you find a building to be beautiful, but can’t say why, that’s ok. Trust your gut, because sometimes, liking something is reason enough.

The LAHD is Applying a More Stringent Standard to Residential Hotels

In Los Angeles, at the end of World War II the city’s leaders expected a huge population boom. As a result of these expectations; the city decided to increase the allowable unit density of land. This ultimately led to the rezoning of a substantial portion of the city to R-4. This allows for one dwelling unit for every 400 square feet of lot area. In other words, R-4 is a relatively high intensity residential zoning category. After the zone change, real estate developers proceeded to build units. Among the types of units that were built were so called hotel guestrooms. Guestrooms were an attractive unit type for developers because the code allowed for even greater density of units per lot area and less stringent parking requirements. Guestrooms differ from an apartment or dwelling unit in that the occupants of a guestroom are expected to be of a transient nature, whereas, the occupants of an apartment are expected to use the unit on a longer term basis. This has implications for the program of the unit, in that where an apartment must have a kitchen; a standard guestroom is forbidden by law to have a kitchen. This would eventually pose a problem for owners, tenants and regulators of hotel guestrooms.

Due to Los Angeles’ steady population growth over the last six decades; the actual use of hotel guestrooms slowly morphed from short to long term. In effect the units were being used more like apartments and less like guestrooms. This transformation manifested itself in two ways; the first being that these units were being rented on a long term basis, and the second being that provisions were made for cooking, which means that stoves were added within the units. Over the past few decades, The Los Angeles Department of Building and Safety and the Los Angeles Housing Department have turned a blind eye to their unapproved use, because they were aware that these units play a vital role in accommodating some of the city’s most marginalized citizens. Their knowledge of this is evidenced by the creation of the Residential Hotel Unit Conversion and Demolition Ordinance, which was passed by the Los Angeles City Council in 2008. This ordinance inhibits the demolition or conversion of buildings that the city has determined to be a residential hotel.

The shift from short to long term use of these buildings creates regulatory problems in that; long term use requires cooking, and cooking is restricted in guestrooms. In many cases the LAHD has conducted multiple inspections of residential hotels as part of their Systematic Code Enforcement Program, and has been charging the residential hotel owners for, and providing them with registration of rental units. Yet, recently in spite of their previous inspections and implicit acceptance of these units; the LAHD has decided to enforce the unapproved use. The LAHD is issuing “orders to comply” to owners of residential hotels with guestrooms that have stoves. The “order to comply” compels the building owner to do one of the following: either remove the stove, or attain a change of use from the LADBS. This poses challenges to building owners and architects in that since the building is technically a hotel the plan checker at LADBS is likely to treat the building as a public accommodation, which means that they would hold the building to a higher accessibility standard than a typical apartment building. I recently dealt with an issue where the owner of a hotel with 12 guestrooms was issued an “order to comply” by the LAHD. They were cited for unapproved use because the units had stoves. I attained a change of use from LADBS and the owner was able to keep stoves in all units.

You Need to a Have Certificate of Occupancy for Your Apartment Building

The Los Angeles Housing Department (LAHD) is coming down hard on owners of buildings that lack clear documentation regarding the legal building use. This is a serious problem for the owners of apartment buildings constructed prior to 1923, because in those days the Los Angeles Department of Building and Safety (LADBS) was not required to issue a certificate of occupancy. The certificate of occupancy or “C of O” is the governing document used by stakeholders to substantiate the legal use of a building. I have recently been resolving issues relating to missing or inaccurate C of O’s with the LADBS. One of these projects is a historic 8 unit apartment building located just north of the University of Southern California. The building was constructed in the early 1900’s and as such a great deal of important documentation was missing or unavailable, and the documentation that was available often contained conflicting or inaccurate information. The owner’s problem began when the LAHD issued an “order to comply” demanding the removal of 3 units. After inspecting the building and researching the permit history I was able to put together a package for the Los Angeles Department of Building and Safety that ultimately led to a determination by the LADBS that the correct unit count was 8 units. This meant that the owner could keep all their units.

On Markets and the Recent Economic Crisis

What follows is an essay that I wrote back in March of 2010.

Many claim that the current economic debacle is a prime example of why market forces cannot be left to themselves and why the government must play a greater role in economic activity. However, an exploration of some of the major factors that contributed to the current crisis could easily lead one to conclude the opposite, which is that the government was a major culprit in amplifying this catastrophe. This argument is reinforced by examining three major contributors to the financial crisis. The first contributor to the current crisis is over participation of the federal government in the mortgage market. Second, is undue faith on the part of market participants in the assessments made by rating agencies and third, is government induced moral hazard. Consideration of these factors provides useful guidance as to the appropriate steps the government should take so as not to aggravate the economy. Economic downturns are endemic to the capitalist system, but certain actions taken by the government can make economic calamities worse.

There is some merit to the argument that the government should facilitate the purchase of homes by families that would have otherwise been unable to do so, in order to foster support for property rights. In that, a country with a large proportion of property owners is likely to have an equally large proportion of individuals that have a respect and appreciation for property rights, which lies at the foundation of a successful capitalist economy. Yet, the federal government over stepped its bounds in terms of an appropriate level of participation in the real estate market via Fannie Mae and Freddie Mac. The federal government’s originally implicit but ultimately explicit guarantees exerted a substantial upward pressure on real estate prices. While studies have shown that capital inflows from foreign countries such as China played a major part in the housing bubble; the attractiveness of investing in the mortgage market was sweetened by government participation. The government compelled government sponsored enterprises (GSEs) to provide a strong secondary mortgage market, but these markets behaved as if they were on steroids, in that they grew very large, very quickly.

Market participants failed to consider the limitations of assessments provided by rating agencies. There exist major problems with the industry in which rating agencies operate. This has fostered a substantial amount of distrust among banks, which fanned the flames of illiquidity. The first problem is that the Securities and Exchange Commission and other entities that are tasked with bank oversight have made ratings a formal part of the financial system. This government endorsement makes rating agencies such as Standard & Poor’s, Moody’s and Fitch into oligopolists, ultimately allowing them to earn the profits that come along with that position. The second problem with these rating agencies is that they hold that they are private entities that are merely giving their opinion of the credit risk associated with certain financial assets, and their right to provide their opinion is constitutionally guaranteed by laws regarding free speech. Therefore, they argue that they should not be prosecuted for any impropriety in the way that they rate certain assets. The third and main problem with these rating agencies is that they are hired to rate the very securities and collateralized debt obligations which the companies that hired them are issuing. This constitutes a considerable conflict of interest, in that they have a strong incentive to give an asset a high rating so that they can continue to do business with the company that hired them. These rating agencies even help issuing institutions design the packages so that they receive the coveted AAA rating; this situation clouds the objectivity of rating agencies.

The fed assisted bail out of LTCM set an unhealthy precedent which led a number of major financial institutions to conclude that they were insulated from the potential adverse consequences associated with the kinds of risky positions in which they were engaged. Too much emphasis has been put on the danger of complicated financial assets and derivatives, when the basic problem is simple; it is dangerous for an institution to be highly leveraged, particularly in the event that liquidity dries up. These institutions reaped the benefits of their positions, as they should, but they should also be forced to bear the painful costs. Government induced moral hazard dulls the blade of market discipline that would otherwise temper widespread risk taking.

There seems to be a widely held belief that economic crises are preventable. This is not the first economic crisis, nor is it likely to be the last. During economic booms market participants convince themselves that they are living in a new era, where old rules no longer apply. This was the case during the dot com bubble as well as the over speculation in the railroad industry in the 1800’s. However, these busts serve an important purpose; they provide an opportunity for an economy to purge itself from institutions, ideas and practices which are no longer functioning. Government over participation in markets impedes this cleansing process. The government should limit its participation to combating the prevalence of externalities.

There is no magic bullet that will alleviate the current crisis, but the government strategy going forward should be to avoid regulation that will strangle private enterprise and the entrepreneurial spirit. The government needs to begin to unwind its positions and send the message to companies that they are free to take risks for their own benefit, but at their own expense. The government must allow market discipline to be restored by limiting its participation in markets. The government must also refrain from endorsing any rating agency. Finally, the government should be prepared to let large companies fail. More regulation is not the answer. It often serves to distort markets rather than help. For the most part, even fervent free-market advocates will concede that free markets have some limitations. But, one would be hard pressed to demonstrate that the government will do a better job at ordering economic activity than a free market.

Los Angeles Housing Department “Is SCEP’s focus Life Safety or Economics?”

Is the Los Angeles Housing Department’s policy geared towards improving living conditions of renters, or is its primary goal to increase local GDP by stimulating aggregate demand for services and products relating to construction? As an architect with graduate level training in economics, I’m inclined to conclude that the LAHD appears to be engaged in a mutated form of Keynesian economic policy. John Maynard Keynes is widely regarded as the father of modern macroeconomics. Essentially Keynesian economic policy involves the government spending during recessions in order to stimulate the economy. The main difference here is that the LAHD is compelling building owners to do the spending. The LAHD’s systematic code enforcement program or SCEP involves LAHD inspectors visiting residential units and pointing out code violations and issuing an “Order to Comply”. Anyone that has had the recent misfortune of being issued an order to comply by the LAHD is likely to have wondered “why am I being cited”? Those employed by the LAHD will no doubt tell you that they are protecting the life, safety and welfare of the public, but what else is going on? Is it merely coincidence that the apparent increased intensity of SCEP inspections is taking place while this country is experiencing “The Great Recession”?

Although inspector’s citations are supposed to be limited to those which are supported by city code, anyone with sufficient construction experience will concede that there is always an aspect of discretion. In other words, what one inspector considers a code violation might not constitute a violation in the eyes of another inspector? This can be problematic in that if an apartment owner is compelled to devote resources to resolving citations made by the LAHD inspector, then that means those resources cannot be spent on other building improvements. This is what economists call an opportunity cost. It is difficult to determine whether the issues cited by the inspector are of greater value to the tenant than the improvements that the building owner would have otherwise made. Hence, it is not a foregone conclusion that SCEP benefits renters. Let’s consider for a moment who this does benefit? It benefits the LAHD by way of inspection fees and other penalties; it also benefits architects, engineers, construction contractors and other specialized consultants in addition to building material suppliers. Is it fair for building owners to be taxed for the benefit of others?