anyone worried about Los Angeles or California's financial future? (Orange: crime, credit rating)

[Cinema Cat]

I'm house-hunting, and wondering about whether to stay in L.A. or move out of state, perhaps to Seattle.

I'm worried about the financial future of California, and Los Angeles in particular.

Yes, I listen to KFI-AM's John and Ken. They talk as if L.A. and California face a dire economic future. That due to public employee pensions, L.A. might become another Detroit, facing bankruptcy, raising taxes ever higher while providing ever fewer services.

Is anyone else worried about our state's/city's economic future?

[majoun]

Originally Posted by Cinema Cat

I'm house-hunting, and wondering about whether to stay in L.A. or move out of state, perhaps to Seattle.

I'm worried about the financial future of California, and Los Angeles in particular.

Yes, I listen to KFI-AM's John and Ken. They talk as if L.A. and California face a dire economic future. That due to public employee pensions, L.A. might become another Detroit, facing bankruptcy, raising taxes ever higher while providing ever fewer services.

Is anyone else worried about our state's/city's economic future?

Another reason not to live in the city of L.A.

As I have said on other threads, there is no advantage to living in the city of Los Angeles, which has already virtually ceased to provide public services, but insists on sucking more and more money out of anyone foolish enough to live there and/or have a business there. There are good reasons why businesses prefer not to locate in L.A. The independent cities and unincorporated areas have better quality of life, lower crime, (usually) better services, and fewer problems in general than comparable and nearby areas of L.A. City.

Bankruptcy is a realistic possibility, and, if it happens, property will be worthless. Anyone who buys property within the city of L.A. is a sucker, especially at current prices.

You don't have to flee the region - there are many nice places which are not part of L.A. city. I'd urge that you avoid living in L.A. city, though.

[TimTheEnchanter]

Anyone with a brain knows almost all the cities and counties in CA are in trouble financially and CA is too. When will the crisis hit? No one knows, but the level of spending on public employee pensions is unsustainable. If the state were a company they would be in severe violations of the law for unfunded liabilities.

[California-Dreaming]

This has been something I have considered for a long time but I have been hearing about it more than experiencing it. I am moving in April and decided I will probably have to just deal with it or make excuses to not move. Then again though didn't Orange County deal with the same issues leading to bankruptcy in 1994. They seem to have bounced back okay.

[thelopez2]

Originally Posted by California-Dreaming

This has been something I have considered for a long time but I have been hearing about it more than experiencing it. I am moving in April and decided I will probably have to just deal with it or make excuses to not move. Then again though didn't Orange County deal with the same issues leading to bankruptcy in 1994. They seem to have bounced back okay.

Oc when bk in 1994 , mammoth in 2012, still waiting for worthless properties.

Most people have the nimby mentality with busines. I like how culver city gave LA the finger with probably one one of the busiest Costco in the country. If you don't want the revenue , we'll take it and put it in your back yard. I'm not worried about the financial future of LA or CA more than any other part of the country.

[Chowhound]

Originally Posted by Cinema Cat

I'm house-hunting, and wondering about whether to stay in L.A. or move out of state, perhaps to Seattle.

I'm worried about the financial future of California, and Los Angeles in particular.

Yes, I listen to KFI-AM's John and Ken. They talk as if L.A. and California face a dire economic future. That due to public employee pensions, L.A. might become another Detroit, facing bankruptcy, raising taxes ever higher while providing ever fewer services.

Is anyone else worried about our state's/city's economic future?

I listen to them sometimes, john can be a bit over the top at times. I don't think ca is gonna be that bad, at least not Detroit level bad.

I do think things are gonna get worse before getting better, they are right about the pension obligations and other financial stuff, that stupid hi speed train thing needs to get knocked down.

Ca for now, has a lot of draw still, I think it's still slightly growing, last I heard there has been a shift in things, people are speculating that the people moving out are middle class whites and are being replaced with lower socio economic Latinos from Mexico, is that true, I don't know, possibly.

I know I'd get the hell out of here if my situation changes... right now I can't but I know I won't retire here.

Too much traffic, crowds and other social ills.

Bottom line, I think Ca is overrated... but that's just my opinion.

[jamills21]

Not to start a political war but John and Ken can be a bit hyperbolic on their statements. The finances of LA are bad, but comparatively speaking it is not all doom and gloom for our economy. Let's not forget that we are not that far from a global economic collapse and we are not only adding jobs, but our credit rating has been boosted by wall street. Also, why did Detroit fail? It wasn't because of unfunded pension liabilities, that is only a small part of it and the reason why LA won't be in the same boat. Detroit has been losing population over the past 40 years, Detroit's main source of commerce (manufacturing) was decimated, former Mayor Kwame Kilpatrick creating a complex financial mechanism involving derivatives where he essentially put people's health and social security plans into the hands of Wall Street before the recession which exacerbated their financial mess.

LA does not have any of these types of problems except for unfunded pension liabilities.

Here are the top 10 cities with unfunded pension liabilities which is adjusted for the % a city has to cover for them:

City % unfunded
Charleston, W. Va. $270 million 24
Omaha, Neb. $1.43 billion 43
Portland, Ore. $5.46 billion 50
Chicago, Ill. $24.97 billion 52
Little Rock, Ark. $498 million 59
Wilmington, Del. $364 million 59
Boston, Mass. $2.54 billion 60
Atlanta, Ga. $3.17 billion 60
Manchester, N.H. $436 million 61
New Orleans, La. $1.99 billion 61


"Only Los Angeles, Calif., and Denver, Colo., had even half of the money needed to fulfill their promises to employees. Thirty-three cities had set aside nothing to pay for this bill coming due," the research noted. Cincinnati was not among the cities ranked.


Finally, Econ 101....For example Houston...Everybody favorite poster boy for city success. When they were in the same sort of pension and budget "crises" that we are in now 3 years ago, what did they do? This is strait from the the City of Houston's controller himself:

"Last November, Houston voters overwhelmingly approved four bond proposals, two of which called for significant tax increases. I do not think that kind of voter approval would have happened in most U.S. cities, and I think that says a lot about our city and its future. Simply put, Houstonians are happy living here"

The City of Houston RAISED TAXES.....This is combined with an Oil economy that has historically been the Econ 101 tenant of the Boom-Bust cycle. I'm really not hating on Houston and am glad they have good things going on, but let's not rush to judgment on what the future means for them as well.


Does this mean that LA is out of the woods yet? Absolutely not, but we are not going the way of Detroit that is for sure.

[Those Who Squirm]

To the OP: You should probably find another forum in order to get a second opinion. In the C-D community L.A. has pretty much become the metonym for everything that can go wrong in a city, from crime to expensive housing to gritty sidewalks. Yes there's still crime but it's a lot safer than it used to be. Yes housing is expensive as in most large cities on the coast, but it's not as bad as in SF. Gritty sidewalks? I haven't been to a city yet that didn't have those.

I live in L.A., but having seen the PNW I like that region better in some ways, and less in other ways. I could see choosing Seattle over L.A. if I were in your shoes, but it would be more a matter of Seattle's "pull" factors than any notion of CA or L.A. being hell on earth, as many posters here seem to earnestly believe.

[ElysianEagle]

i seriously doubt that property values in the trendy neighborhoods of LA (thinking the beach cities, santa monica, weho, beverly hills, etc etc) will ever tank. the combination of good weather and close proximity to the beach will always hold enough draw for enough people not just from the rest of the country but all over the world. if/when better public transportation options become available (i'm not holding my breath, tho), prices will only go up, i think.

now if you happen to live in the valley or way inland, that's a different story.

[majoun]

Originally Posted by ElysianEagle

i seriously doubt that property values in the trendy neighborhoods of LA (thinking the beach cities, santa monica, weho, beverly hills, etc etc) will ever tank. the combination of good weather and close proximity to the beach will always hold enough draw for enough people not just from the rest of the country but all over the world. if/when better public transportation options become available (i'm not holding my breath, tho), prices will only go up, i think.

now if you happen to live in the valley or way inland, that's a different story.

The places you mentioned are all outside the city of L.A. proper.

Detroit's fate hasn't hurt the Grosse Pointes, Royal Oak, Ferndale, St. Clair Shores, etc. Therefore it's not unreasonable to think Santa Monica, Beverly Hills, Weho, etc. will escape the fate of L.A. A longstanding general rule in L.A. is that anything near a beach will hold its value (barring global warming).