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Friday, May 27, 2022

Neighborhood Gets Windfall From Real Estate Boom

Neighborhood Gets Windfall From Real Estate Boom


Staff Reporter

Joe Davis remembers the day back in 1968 when he and his wife found the kind of classic Colonial they had always wanted. The two-story home had a grand canopied entrance, a center stairway and, as a nice extra, a backyard pool.

The house on Guthrie Drive was in the West Los Angeles community of Beverlywood, a tree-lined neighborhood near the freeway and loaded with families the perfect place to raise their two children.

But the home was priced at $77,000, a strain at the time on his management consulting salary. He decided to go ahead with the purchase anyway, figuring it was a good long-term investment.

Little did he know just how good.

During the recent real estate boom, homes on Davis’ block have sold for as high as $1.2 million. A neighbor across the street got an unsolicited offer for $1.4 million that he turned down because he has no plans to move.

“If Ward and June were going to be raising their boys all over again, this is where they would be if they could afford it,” says Marc Fiedler, a real estate agent who works the neighborhood and has lived there for 17 years.

Beverlywood did not start out as a million-dollar enclave. Its post-Depression roots, like those of similar neighborhoods throughout Los Angeles, are distinctly middle class: modest lots, little architectural flair, and generally in the 1,800-2,500-square- foot range. In 1940 homes were priced under $9,000.

But several decades of L.A. real estate appreciation have changed the picture. Prices are at the point where longtime homeowners, their mortgages long since paid off, can sit on seven-figure property. They are being joined in the community by newer, more affluent homeowners who can afford those steadily increasing prices.

The result is a checkerboard of wealth among the roughly 1,400 households some of it tied directly to the real estate itself, some of it to more liquid assets that purchased the real estate. It’s an illustration of how affluence has extended over the years to various portions of the city. It also reflects the growing limitations among middle-income wage earners seeking a livable, affordable neighborhood in Los Angeles. “I can’t afford it,” quips the now-retired Davis.

Effects of property wealth

Beverlywood is not unique among neighborhoods with middle-class and even working-class roots whose home values have skyrocketed.

Consider the 1,800-square-foot tract homes in Rancho Palos Verdes built for aerospace engineers who couldn’t afford Baldwin Hills. Or certain areas of Burbank, where dual-income couples are driving up the prices of drab bungalows that originally were built for blue-collar aerospace workers.

“Property wealth has been very significant for many homeowners in coastal California as property values have gone up in successive waves in the ’70s, ’80s and the latter half of the ’90s,” says Stuart Gabriel, director of USC’s Lusk Center for Real Estate. “It’s serving to bolster the economy today.”

A planned community, Beverlywood originally was made up of farmland and then subdivided in 1939 by the Walter H. Leimert Co. Homes were constructed on the property as early as 1940, but as soon as the war started, work halted. Then it began again in earnest in 1947.

It got its elegant-sounding name by being located just a half-mile south of Beverly Hills (and on its west it borders the Hillcrest Country Club and Cheviot Hills). But despite marketing materials that pretended otherwise, “It was for the budget-minded,” explains Fiedler.

By 1960, the median price in the neighborhood was a mere $22,000, according to U.S. Census data respectable, but at best a solidly middle class value for the time.

“I didn’t know there was any wealth there at all,” recalls Marty Weiss, 54, who first moved into the neighborhood in 1968 as a teenager and who now lives across from Davis. “Most of the people I knew were working class people, not even professionals.”

Rules and regulations

Beverlywood had a big advantage over some other communities: a strict set of covenants, conditions and restrictions, plus a neighborhood association established in 1940. (There are 1,354 homes in the association, but people who live in adjacent homes consider themselves residents.)

The original developers wanted to create a neighborhood that would not follow the path of many at the time newly shaped properties that quickly became rundown because of incompatible uses. “It’s pretty laughable if you read some of the cc & r;’s,” said Lawrence Zehnder, vice president of the Beverlywood Homes Association. “They talk about not having farm animals.”

The restrictions gave the homeowner association authority to review any exterior change of a home’s appearance. It also called for an elected board, giving each household one vote.

The association kept up common areas, including Beverlywood’s circular park at its center. Twenty years ago the association added private security patrols whose service is like that of a small-town police force.

“I will be sitting in my home watching TV at 8 o’clock at night and I will get a call: “Mr.Weiss, you left your garage door open,” says Weiss, who owns a baby furniture store and collects sports cars.

The restrictions also prevent residents from erecting front-yard fences that can quickly kill a sense of community. As a result, 50 years after the neighborhood was built, yards are connected and the streets have an open feel.

“If you drive through Beverlywood you get that sense of an old-fashioned neighborhood,” says Gil Lipaz, a financial adviser who is president of the Beverlywood Homes Association.

The association reviews designs for remodels, additions and new construction after a teardown prohibiting the kind of problems with “mansionization” that has plagued other communities with an older, smaller housing stock that has substantially appreciated.

Suzanne Laff, a commercial real estate broker who moved into the neighborhood 22 years ago, says that aside from the family-oriented feel of the place, it was the strict regulations that attracted her. “I didn’t want to have a neon green-and-pink, three story obnoxious-looking house with a six-foot-high gated front across the street,” she says.

From 1960 to 1970, median home values more than doubled to $49,700, according to Census data. Then during the great run-up of the mid-1970s they exploded to $197,300. And during the late 1980s boom they reached a median value that topped $500,000 by 1990, with an average of $529,000.

Like other areas, values plummeted during the early ’90s recession, but started to pick up again after 1995, earlier than other areas.

Tract-level data is not yet available from the 2000 Census, but according to DataQuick Information Systems the median price of homes in the neighborhood’s central core shot up to $750,000 last year from $425,000 in 1995.

And while the neighborhood has appreciated, Fiedler says that over the past decade or so it has revitalized itself, as the original homeowners either die off or move to other communities. “It’s created a vacuum that drew in a lot of young families,” he said.

And at the prices homes have been going for, richer families than ever.

Teardowns are common

The best view lots and the nicest homes are topping $1 million and middle-class buyers have found they no longer can find anything affordable, a quality that Beverlywood long prided itself on.

“I have a couple looking for a home there right now and they can only afford $500,000 and there is nothing,” says residential real estate agent Carla Winnie. “A 3,500 square foot house with a view? That could easily be over $1 million.”

Homes that have recently changed hands sport new tile roofs, or free-flowing English gardens with exotic palms, or architecturally handsome additions with tile roofs. Teardowns and rebuilds are common despite the restrictions. Along pricey Duxbury Circle, several new homes would not look out of place in Beverly Hills.

Residents says that the neighborhood, which for years has had a sizable Jewish population, benefited from an influx of affluent, Orthodox Jews who want a home close to Pico Boulevard. There are a series of Orthodox synagogues just north of Beverlywood that observant Jews, who elect not to drive on the Sabbath, can walk to on Fridays and Saturdays.

Fred Denitz, a regional vice president for Mellon 1st Business Bank in Century City, moved into Beverlywood a year-and-a-half ago from Beverly Hills, no less.

Denitz, who grew up in Beverlywood and then lived in the flats of Beverly Hills with his family before moving back, says his neighbors include other bankers, as well as entrepreneurs, stock brokers, insurance agents, attorneys, doctors and other high-income professionals with families.

“It just has a real old fashioned sense of community we didn’t have in Beverly Hills. I grew up in 90035 and now I’m back in 90035,” says Denitz, who nevertheless remains stunned at the prices. “When I was growing up 30 years ago these home were selling for $35,000 or $40,000.”

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