Real Estate newsletter: Renters wrestle a landlord in court
Welcome back to the Real Estate newsletter. Late June brought a series of housing squabbles — some serious, some so ridiculous and petty that we had no choice but to highlight.
First, the serious one. We dug into court records this week and looked into a class-action lawsuit claiming that Geoffrey Palmer, one of L.A.’s most prominent landlords, withheld security deposits from more than 19,000 tenants.
Four years of court battles later, Palmer has agreed to a proposed settlement and payout of $12.5 million, which could be an average of $500 to $600 per tenant.
A squabble down in Laguna Beach, however, had no winner. It was between two rich guys: billionaire Bill Gross and tech entrepreneur Mark Towfiq, who took umbrage when Gross erected a 22-foot blown-glass sculpture between their houses and covered it with a view-obscuring net.
The neighbors clashed in court, and both claimed victory after a judge ordered the net be taken down. Also, the sculpture can’t be illuminated later than 10 p.m. We’re the real winners, however, as we get to enjoy the pettiness of two rich guys with apparently nothing better to do. At one point, Gross allegedly blasted the “Gilligan’s Island” theme song on repeat to harass his residential rival.
The week’s biggest celebrity stories popped up on the ocean and in the Valley. On Malibu’s Las Flores Beach, Finneas O’Connell, the Grammy-winning producer and older brother of Billie Eilish, unloaded his turnkey cottage for $5.66 million.
Records show he’s settling down in Los Feliz after creating a miniature compound by buying two neighboring properties in the last few years.
Wiz Khalifa is hoping for the same success in Encino, putting his modern residence on the market for $4.5 million. The listing arrives just a month after he bought a bigger Encino house a few miles away for $7.62 million.
Finally, we looked into “affordable housing.” The quotations are necessary because an L.A. Times review found that more than half a dozen affordable housing projects for 600 families in California are costing more than $1 million per apartment to build. It’s a record-breaking number, and the costly trend means that far fewer affordable apartments are being built compared to what’s needed.
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Landlord agrees to pay back security deposits
Prominent Los Angeles landlord Geoffrey Palmer has agreed to pay $12.5 million to settle a class-action lawsuit accusing his company of withholding security deposits from more than 19,000 tenants when they moved out of his apartment complexes.
The settlement, which goes before Los Angeles Superior Court Judge Elihu M. Berle on July 18 for preliminary approval, could mark the end of a four-year legal battle that pitted tenants against Palmer’s company, GHP Management Corp.
Court documents alleged the company — a subsidiary of G.H. Palmer Associates, one of the largest landlords in Southern California with more than 15,000 apartments in 23 Southern California complexes — withheld security deposits for years from thousands of tenants by charging repair and cleaning fees without properly notifying residents.
Wealthy neighbors’ fight ends with no winners
Billionaire Bill Gross’ infamous fight with his Laguna Beach neighbor over a 22-foot sculpture was the stuff of schadenfreude legend — at least for those who enjoy reading about petty squabbles between the rich.
The retired bond king’s statement after the city’s approval of the artwork felt like a victory lap, but in a drawn-out court battle that saw Gross and his neighbor, tech entrepreneur Mark Towfiq, accuse each other of harassment, it seems like there’s no real winner.
The outcome? Gross not only had to remove protective netting around the sculpture but also withdrew plans to install a permanent glass-and-steel cover in order to win a city permit for the piece in January.
What’s more, the blue glass arrangement of marlin, fishing globes and cobalt-colored reeds can’t be illuminated later than 10 p.m. after Towfiq complained about the glare.
That hardly seems like the stuff of victory after a dispute that drew worldwide media coverage when Towfiq accused his billionaire neighbors of playing the theme of “Gilligan’s Island” on a loop to harass him after he complained to the city about the installation, writes Laurence Darmiento.
Finneas sells on the beach, heads inland
Finneas O’Connell — the Grammy-winning singer and producer best known for his collaborations with his younger sister, Billie Eilish — has sold his beach house on the sands of Malibu for $5.66 million.
The sale is a success any way you spin it. At $5.66 million, it’s $475,000 more than he paid for the property in 2020 and $160,000 more than he was asking when he put it on the market in May. According to the Multiple Listing Service, he had an offer in hand a week after listing.
The buyer, The Times has confirmed, is Jennifer Smith, a publisher who founded C Magazine and serves as president and editorial director of Santa Barbara Magazine.
Rapper hopes for a hit in Encino
Rapper Wiz Khalifa is hoping for a hit in the San Fernando Valley, putting his Encino home of three years on the market for $4.5 million.
The listing comes as no surprise; last month, the Grammy-nominated hip-hop star spent $7.62 million on a slightly bigger spot a few miles away.
Khalifa bought this one for $3.4 million in 2019 a year after it was built. Billed as boasting “transitional modern architecture,” the 5,875-square-foot residence draws the eye with a chic exterior of white stucco and rich wood.
Affordable housing can cost more than $1 million per unit
More than half a dozen affordable housing projects in California are costing more than $1 million per apartment to build, a record-breaking sum that makes it harder to house the growing numbers of low-income Californians who need help paying rent, write Liam Dillon and Ben Poston.
The seven subsidized housing developments, all in Northern California, received state funding within the last two years and are under construction or close to breaking ground. When completed, they will provide homes for more than 600 families.
But their exorbitant price tags mean that taxpayers are subsidizing fewer apartments than they otherwise could while waiting lists of renters needing affordable housing continue to grow.
“That is untenable,” said Assemblyman Tim Grayson (D-Concord), who is writing legislation aimed at simplifying state affordable housing financing. “That is not a sustainable model. We have got to do something to reduce the cost.”
What we’re reading
Tired: tiny home. Wired: even tinier home. Golden Gate Park got a charming surprise on Wednesday when a pristine blue-and-yellow Victorian home popped up on a gnarled tree stump. No one knows how the dollhouse got there, and SF Gate looked into the mystery.
Curbed talked to a trio of landlords about their thoughts on the real estate boom and let them speak anonymously to get their honest opinions. Most of the story is an insightful and honest analysis of the trials and tribulations of being a landlord, but some of the quotes are a doozy. A memorable one: “Honestly, why shouldn’t I [charge more]? If that’s the market? Because I’m supposed to be a good guy?”