Why Has Development Skipped Silver Lake

The eastside submarket of Silver Lake is one of the most popular neighborhoods in L.A., but it hasn’t seen the development activity other markets have. That may be changing. Los Angeles developer Barth Partners is bringing the first condo project to the market in more than a decade, VICA, a 31-unit luxury and highly amenitized condo project. There is tremendous demand for housing in Silver Lake, but developers haven’t flooded into the market in the same way that they have in Hollywood, Downtown Los Angeles and even Glendale. Justin Barth, principal of Barth Partners, says that the community hesitation to growth and the challenges building in Los Angeles has made it challenging to build in the neighborhood, but his project is supported by the community thanks to its light environmental footprint, thoughtful design, and affordable price point. We sat down with Barth to talk about the project, the development in the market and why Silver Lake may be seeing more construction activity.

GlobeSt.com: We haven’t seen a lot of development activity in Silver Lake. Why did you decide to build a condo property in the market?

Justin Barth: During the recession, there wasn’t a lot of activity, and looking at where we are now in the real estate cycle, it is not surprising that a project is coming to the market. This is the first project to come to the market in South Silver Lake in more than a decade, and it has all of the walkability that people want along Sunset Blvd. There really hasn’t been anything new here expect for the repositioning of single-family houses. There is really a surplus of amenities for a for-sale, 31-unit building. There will be rooftop terraces for the top floor owners; there will be a meditation garden in the back that will be heavily landscaped; there is a library and lounge area on the fourth floor that is situated opens up onto a terrace that opens up to a spa; there is a resort-style pool deck; and there is ground floor retail space. The price point is at a discount to single-family homes in this market, and we think that is a smart strategy. We think it is a win-win for ownership and for people looking to reside in this market.

GlobeSt.com: Why do you think that development has overlooked this market in the past?

Barth: The desirability here is even greater than some of the denser areas in Los Angeles. If you look at the local political landscape in an area like Downtown L.A. or the Arts District, density is preferred, and you can do a high rise with reduced parking requirements and you have public transportation that is closer to new development. Silver Lake, on the other hand, doesn’t have a metro anywhere near it. I think that you have local communities facing gentrification issues, and they put pressure on local politicians to make sure that development is built and approved in a smart way. The majority of the time, that results in a much slower process. Where you see political will, you are going to see more density. I don’t think that it is a lack of desirability, but it is a smaller more walkable community, and so you aren’t going to see density and development in these markets. Looking at the natural progression of a market recovery, you typically see the single-family market move first. You start to see those values increase and you start to see people invest on a speculative basis. Then financing really starts to increase some of that activity.

GlobeSt.com: Development in Los Angeles is difficult in general. What are the development challenges in Silver Lake?

Barth: It is a challenge to get a project entitled, and that isn’t exclusive to just Silver Lake. It is a citywide hurdle that developers have in convincing communities that the project is going to leave a light footprint and that it will maintain the character of the neighborhood—and that is hard to do in multifamily buildings. This project was entitled through a lot of community outreach, and the design was well received. The property has a light footprint and it is the same height as the building next door.

GlobeSt.com: How has the market changed in the last few years?

Barth: You typically have a lot of local tenants in Silver Lake, and you have seen a lot of change over the last three years. It has been interesting to see national and international retailers come into the market. You are starting to see a lot of the activity come in through the retailers. The market is truly gaining popularity not only locally but nationally, and that is creating a desire to be here. A lot of it is because there is an authenticity in the market, and the locals are proud of that. We are trying to deliver a project that is not only desired by people discovering Silver Lake for the first time or people that are getting to know it better but also by the locals in this market that can’t afford a single-family home here.

GlobeSt.com: Is the lack of public transit a deterrent for developers to come to the market?

Barth: In Silver Lake, you can be in downtown in less than 10 minutes and in an Uber for less than $10—and it isn’t only Downtown L.A. You can get to Glendale, Burbank Pasadena, Hollywood via public transportation in a way that isn’t onerous. I think these neighborhoods will see more development even in lieu of public transportation and metro lines.

GlobeSt.com: What is your outlook for development in Silver Lake?

Barth: It is my opinion that you are go to start seeing an increase in attached for-sale product, because L.A. needs to go there and people are looking to live in these neighborhoods. You are going to start to see the financeability of these markets become easier as this product is successful. It is odd that my project is currently the only project under construction in a market of Los Angeles that is very popular. It is a confluence of local politics, the financing market catching up and a slower entitlement process. I think that you will start to see more of this product as time continues.