Mills Act Contracts - City Wants to Re-assess the Impact of the Mills Act

The city is contemplating modifying the Mills Act, and hopefully not, end the program. This is a big issue since it affects a huge number of homeowners of single family homes as well as renters and owners of condos in many building in DTLA, Hollywood, Mid City, etc. 

Contact the City Planning Dept to voice concerns: https://bit.ly/3yregJF

The Mills Act:

In California, the Mills Act can be linked with the 20% historic preservation investment tax credit provided by the Federal Historic Preservation Tax Incentives Program and the Tax Reform Act of 1986. Federal affordable housing tax credits may also be utilized with these incentives to offset rehabilitation costs. Over a half billion dollars of private investment in California’s historic buildings is due in a large part to this program. Preservation tax incentives used on under-utilized or abandoned hotels, offices, stores, schools, warehouses, and factories give new uses that maintain their historic character and revitalize the property.

Benefits of the Mills Act:

- Historic Preservation 

- Housing Affordability via tax incentives

- Revitalization of once-derelict buildings

- Restoration instead of tearing down and increasing landfill waste

- Contributions to city economy due to restoration efforts

- Contributions to city in terms of historic and cultural monument status 

- Reversal of blight in many areas

Mills Act Building in DTLA (in addition to the many structures and single family homes around LA!)

https://reinventingdtla.com/search-by-feature

Learn more about the Mills Act:

https://planning.lacity.org/preservation-design/historic-resources/incentives-resources/mills-act

Buyers Taking Advantage of Softening But Not Crashing Market

Interest rates may not go down for a while, and buyers are taking advantage of the softening market before it begins to head up again. 

Some buyers are waiting it out, seeing if the market will implode like it's 2009. But that doesn't seem to be happening while supply remains tight. 

I don't know anyone who is giving up their 30-year fixed 2.5% interest rate anytime soon. 

Frank Gehry designed GRAND LA opens!

The Frank Gehry designed GRAND LA is now open, along with LA's first Conrad Hotel, and the fantastic San Laurel restaurant by chefs Jose Andres. This will be a fantastic addition to the Grand Arts Corridor, within a few steps to The Broad, Walt Disney Concert Hall, MOCA, Dorothy Chandler Pavilion, Mark Taper Forum, Redcat Theater, etc.

Mills Act Lofts for Sale in DTLA

Anyone wanting to save up to 70% off their property taxes per year should look into Mills Act properties. It's one of the best tax loopholes, and there are some fantastic Mills Act lofts for sale right now.

See all available props for sale here and inquire to see what's coming soon here:

https://reinventingdtla.com/mills-act-lofts

Increase in Renters in US since 1970

Number of Renters in U.S. in Past Decades 1970 - 22.4M Renters 1980 - 27.3M Renters 1990 - 33.7M Renters 2000 - 34.6M Renters 2010 - 37.1M Renters 2020 - 43.3M Renters 2022 - 44.1M Renters

DTLA Residential and Office Occupancy Rates Increasing

No doubt people are going back to work, and the price points in DTLA are still affordable compared to the rest of LA (meaning you can still find modernized condos and lofts for well under $1M).

DTLA’s residential occupancy rate for the fourth quarter of 2021 was 94%, up from 88% a year earlier, and the average rental rate was $2,759 per unit, compared with $2,400 in the fourth quarter of 2020.

The office vacancy rate was 20%, up from about 16% a year earlier. Retail vacancy fell to 6% from 7% in the fourth quarter 0f 2020, and hotel occupancy stood at 54%, up from 40% during the fourth quarter of 2020. 

https://www.dailynews.com/2022/06/05/despite-pandemic-dtla-showing-remarkable-growth-report-says/

Investor Opps in DTLA

Units that get high rents and low price/SF in relation to recent comps. These are interesting opportunities to for investors.

Barker Block #131

$1.595M

2+3 / 2830sf

Arts District Massive industrial split/level loft with multiple living/working areas. Live/work space with a wide audience pool.

Compass, Thomas Atamian

Barker Block #102

$1.349M

2+2 / 2660sf

Arts District Massive industrial split/level loft with multiple living/working areas. Live/work space with a wide audience pool. Distressed sale with court confirmation. Cash preferred.

Coldwell Banker, June Ahn

Flower Street Lofts #123

$726K

1+2 / 1423sf

South Park Massive industrial split/level loft with multiple living/working areas. Live/work space with a wide audience pool. Amazing location within blocks to Crypto.com Arena, The Bloc, Fashion District, Financial District, etc.

Keller Williams, Joseph Iuliucci

Market Lofts #619

$799k

2+2 / 1370sf

South Park spacious 2 bedroom 2 bath loft style condo with front desk security and amenities galore. 

Loftway, Christiano Sampaio

Pan American #307

$599k

1+1 / 1000sf

Historic Core classic loft conversion with separate bedroom area, windows on opposite walls, balcony, Mills Act property tax savings.

KW, Miranti Bornvorsin

Yes, the Building Where Johnny Depp Once Owned Penthouses

The Eastern Columbia building has had some serious exposure lately. It's the building where Johnny and Amber used live. And there are some fabulous lofts for sale there right now. Located right at the south end of the historic core, the building is within a few block from the Museum Building, Ace Hotel, Whole Foods, Fashion District, Proper and Hoxton Hotels, The Bloc, Apple Flagship Store, Paul Smith, Cliftons and more. And did I mention that the building is a Mills Act Cultural Monument?

Loft #603

$2.25M / 2+3 / 2230sf /  2 Parking Space Privileges

Penthouse #4

$1.795M / 1+2 / 1780sf / 2 Parking Space Privileges

Douglas Elliman, Ernie Carswell

Loft #611

$1.495M / 2+2 / 1740sf /  2 Parking Space Privileges

Urban RE, Alex Limandri

Loft #708

$1.395M / 1+2 / 1540sf /  2 Parking Space Privileges / 2 Deeded Storage Units

Coldwell Banker, Yuri Huxley

Loft #701

$1.299M / 2+2 / 1390sf /  2 Parking Space Privileges

Executive Realty Group, Beata Mandel

Loft #902

$925K / 1+1 / 1280sf /  1 Parking Space 

KW, Anh Tran

Loft #202

$895K / 1+1 / 1150sf /  1 Parking Space 

Coldwell Banker, Yuri Huxley

Loft #805

$849K / 1+1 / 890sf /  1 Parking Space 

Compass, Jennifer Gainey

Loft #M7

$785M / 1+1 / 1120sf /  1 Parking Space 

Coldwell Banker, Yuri Huxley

Interesting Investor Opportunities Right Now in DTLA

849 S. Broadway #M7 

$785k / 1120sf

Famous for it's iconic clock tower and now the Johnny Depp and Amber Heard Trial, this unit is the lowest price/sf in the building right now at $700/sf. The most recent sale was #806, the same size unit for $865k. Unit #M7 comes with 1 parking space, and the building offers property tax savings with the MILLS ACT. Courtesy of Yuri Huxley, Coldwell Banker Realty.

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215 W. 7th #1302

$598k / 800sf

Fabulous unit with barrel ceilings and exposed brick walls. 13th floor loft with views view views! The Bartlett building offers property tax savings with the MILLS ACT. Courtesy of Agnes Ferreyra, Realty Source.

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108 W. 2nd #611

$575k / 750sf

Coveted east facing loft with DTLA skyline views! The Higgins building offers property tax savings with the MILLS ACT. Courtesy of Robert Howell, KW Beverly Hills.

Getting Ready to Sell Before Winter--and Another Interest Rate Hike

The window to sell is closing, so you want to get the place listed asap if you want to cash out this year. The rule of thumb is to have the place listed now, so you have time to get offers and into escrow by August. That way, you close on the sale before activity really starts to die down.

What to do to prepare to sell, in order of priority

1. Declutter

2. Paint the entire place, including ceilings and cabinets, if needed

3. Change out simple and easy things like faucets, cabinet hardware

4. Refresh bathrooms with a nice new mirror

5. Stage an empty place

6. Replace vanity in bathroom

7. Replace kitchen cabinets if within budget