FOX Business’ Kelly O’Grady reports from Beverly Hills, California, on the building permit moratorium placed by an L.A. County Superior Court Judge in an effort to improve affordable housing.
It is one of the country’s most exclusive and expensive area codes and home to stars like Leonardo DiCaprio and Taylor Swift. But soon Hollywood’s elite may no longer be allowed to customize and upgrade their luxury residences – at least until they address the lack of affordable housing.
That’s according to Los Angeles Superior Court Judge Curtis A. Kin, who alleges that the city has failed to follow state laws requiring approval of a plan to build low- and middle-income housing. The ruling, issued in late December, will temporarily suspend Beverly Hills’ ability to issue new building permits. That means no new swimming pools, kitchens, bathrooms or gyms for the mansion owners of area code 90210.
The decision comes after a lawsuit was filed against the city of Beverly Hills in 2021 by the affordable housing advocate group Californians for Homeownership, a nonprofit sponsored by the California Association of Realtors.
Homes in Beverly Hills, California (iStock / iStock)
“The city of Beverly Hills is over two years late in developing a compliant Housing Element,” said Matt Gelfand, an attorney for Californians for Homeownership, in a statement. “We are optimistic that the penalties imposed by the court will get the city on the right track toward adopting a compliant housing element in early 2024.”
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An attorney for Beverly Hills says the city will continue to issue permits pending an appeal of the judge’s decision. Beverly Hills was required to submit a plan to Sacramento for over 3,000 new affordable housing units, and it has yet to receive state approval. The state of California had rejected four previous proposals. The city has a long way to close the gap – over the past eight years, Beverly Hills has only managed to add roughly 20 units.
City officials argue that a plan for affordable housing would hurt the city’s character.
“We have intentionally created a desirable environment by deliberately avoiding overdevelopment and over-densification,” Thomas White, chair of the Municipal League of Beverly Hills, told the Los Angeles Times.
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Real estate professionals in the area warn that if this ruling is to go into effect, it could have serious consequences for residents looking to make big alterations to their pricey pads.
The Beverly Hills shield sign (iStock / iStock)
“About 80% of the buyers are looking to do some type of work that needs permits because they’re spending quite a bit of money to buy the house,” said Paul Salazar, luxury real estate director at Hilton and Hyland. “For this particular buyer in Beverly Hills, they want it the way they want it.”
Salazar told FOX Business that residents and real estate professionals think the responsibility should fall on the state and a ban on new projects will hurt the local economy.
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“Instead of restricting, why not give incentives?” Salazar said. “That’s what I’m hearing most with the homeowners… you’re not only hurting the residents of Beverly Hills, you’re hurting real estate agents, title people, contractors, architects and subcontractors. You’re hurting a whole economy.”
According to Realtor.com, the median listing home price in Beverly Hills was $6 million in December 2023, trending down 14.3% year over year. The median home sale price was $3.5 million.
