Developer's Response to Controversy Over 11 Bed, 11 Bath Being Built in East Long Beach
After the interest shown in last week's article explaining resident's concerns over the proposed development project at 6481 El Roble which can be viewed here, we decided it was only fair to cover both sides of the story. Here is a Q& A with Dan Lewin, Long Beach resident and 6481 El Roble St. Developer:
How long have you owned the property at 6481 El Roble and when did you first realize it could become an investment opportunity?
We bought it in 2019 always with the idea in mind to develop it. When California made new powerful changes to ADU laws last year to combat the housing crisis, we realized this was a great opportunity. This is not our only property that we’re doing this - it’s one of about 12 so far we’re completing in multiple cities. We have one in Silicon Valley, a few in Whittier, Redondo Beach, Downtown Long Beach, a couple by Cal State Long Beach, and a couple by Chapman University.
With this law being so new, how did you even become a part of this? How did you decide you wanted to pioneer ADU investing?
My background is as a real estate broker. I went to USC and then started at Long Beach’s own Marcus and Millichap firm, whose office is in downtown Long Beach.
Since beginning my career, my niche has always been specializing in student housing, specifically around USC. I’m currently the most active real estate agent around the USC Campus.
I’ve seen over the course of the last several years, how the market plays out when it comes to developing student housing around college campuses. I’ve worked a lot with buyers and sellers there, and have made many home sellers, and investment buyers realize what a massive value a home has in the neighborhoods surrounding USC, if it’s developed as a student-housing investment property as opposed to a single-family home.
With the passage of these ADU laws I realized there was an opportunity to create similar investment strategies near other Universities who have not developed adequate student housing near their campuses. Long Beach State is a prime example.
A lot of the neighbors in La Marina Estates here in Long Beach are furious over your proposed development. What is your side of the story you don’t feel they understand?
We are solving a market need here. Look, I am a for-profit investor. That’s my job. My first responsibility is to do what’s in the best interest of my clients who I’m working very hard for. That’s what got me into this market.
However, I have come to realize how much of a need there is for affordable student housing. Student housing belongs near campuses. It’s that simple. It makes sense for the environment, for traffic, and it is the most fair practice for young people to have the best possible learning environment while they attend a University and try to better their lives.
I came to realize that there’s this debate behind the scenes in our society that frankly I was not really aware of but I realized, you can slice it a lot of different ways, you can put a lot of different spins on it, but the affordable housing crisis in California is an easy concept to understand. We’ve got too much demand and not enough supply. We’re three million houses short in California and that’s why these powerful new ADU laws were put in place to help solve that shortage in supply of affordable housing.
Do you think that La Marina Estates being a traditionally family neighborhood that people have worked hard to buy into changes the argument? Do you think the El Roble situation is an unintended consequence of the law?
No, I think what the ADU laws were designed for exactly is this type of situation. The state realized that local governance and policy is a failed operation when it comes to our housing crisis because local controls allow local interests to fight it, and so it’s become very hard to find homes. This is a perfect example of a “NIMBY” group fighting against more housing which is why we’re in this situation in the first place.
Why do we define family neighborhood as exclusively residential, one home on a lot development? There’s nothing inherently traditional about this, look at the older neighborhoods of long beach and elsewhere, where duplexes and apartments are mixed in with single family. Are these not family neighborhoods? This mindset has allowed single family homeowners to exercise veto power over land use regulation for years.
Look, I’m 28 years old, my business partner is 29. We sympathize with these tenants. These tenants are old enough to be our younger siblings. A couple years ago we were sharing a two-bed apartment in Belmont Shore. We know what it’s like to need housing, to want an affordable rent, and to want a comfortable living situation near your school or work.
Our feeling is the undersupply of housing is a generational tax. We shouldn’t restrict housing where we need it for young people. Yes, we are a for-profit company, but we’re providing a basic need in our community- comfortable roommate living in a nice, safe neighborhood.
We feel we know this area of the market very well. What happens when young people are sharing homes and living as roommates is you get 4 people living in a 2 bath house. And only one of them is living the way they want to because they have the Master bedroom. Everyone else is sharing one bath. We’re looking at a situation that is happening all over with young people and saying…then if people are living this way, why don’t we give them what they want.
That’s why each bedroom has a bathroom. We’re trying to make the most comfortable living situation for young people who have to split a housing cost. And look, when I hear people saying this is going to be a 22 person home I just don’t see that being true.
The house and the investment strategy is designed for one person in each room. The bedrooms are about 125 square feet large. They are not meant to be shared between two people. They are just best, in my opinion, for a bedroom for one person.
With all this being said, have you tried to put yourself in the shoes of the neighbors of this home and seen the argument from their perspective?
Look, I expected people to be not thrilled about it, but I didn't expect the backlash that we’ve gotten in East Long Beach. The level of intensity has been so much different than anywhere else we have a property and that includes other single-family neighborhoods.
I do see the argument from their perspective, I know it represents a different sort of use than before. That’s a change and I realize change can be jarring for people. I definitely think many of the concerns of the neighbors are exaggerated and their view of college students are a little hyperbolic. I think your average Cal State Long Beach student is very focused and not desiring to create a party house. I understand that it’s not something they’re used to seeing. In the end, this is a neighborhood right by a college campus.
The reality is that we have let our housing policy be run by people with their own specific interests and not society’s in mind for so long that we can’t do it anymore. It’s crippling us. It’s not sustainable.
You have that dorm going in by CSULB with 450 beds that’s 8 years in the making and it’s already been cut in half twice. Only 8% of students live on campus, it’s incredibly underserved.
What would you do if you had worked hard to buy a house in La Marina Estates with your family and then this housing development project moved in?
What I think is if I was a neighbor in La Marina Estates I would either give it a chance and see if it’s so bad. I bet it isn’t. And if it is then they can sell and move elsewhere.
People’s home equity is not under attack here like I think some people are worried about. Putting myself in their shoes – I would be scared and upset about that if I thought that too. But I personally have the advantage of being an active participant in the market at USC for the last few years, I am actually confident once the investor market realizes the potential for student housing in their neighborhood, their property values will ultimately rise. We aren’t lowballers, we are buying these houses around market value because they are good investments at market value. The housing market rose 10% this year and we stayed active buyers. It pencils for us and it will pencil for others. I already have clients from USC and elsewhere who are looking at it too.
Could you see a situation where this law leads to all the neighborhoods surrounding Long Beach State to be developed into student housing?
Yes, and frankly I hope so. Because Long Beach State is a commuter school by force not by choice. Long Beach State is a commuter school because of the exclusionary housing zoning laws. When students have to spend half their day in a car, it eliminates time for homework, working a job, social development, and overall wellness. This is a problem and it is unfair for students.
I’m happy to do this, I’m a young person who is fighting for other young people. We restrict equality when we restrict access.
Let’s be honest, Long Beach State generally serves a student population from relatively modest backgrounds. These are hardworking, ambitious, focused students from all different backgrounds who are trying to better their lives. The last thing somebody who is working a full-time job and taking a full schedule of classes needs is having to worry about a safe reliable housing situation within their budget. Quite frankly, I see the lack of affordable student housing as a generational tax.
Do you own the El Roble or any of the other homes outright, or do all of these have investors?
The projects have investors. These are all done through our investment company, Young Lewin Capital. You can learn more on our website www.younglewincapital.com
Anything else you want to say to people interested or worried over this debate?
Student Housing belongs near colleges. It’s pretty simple. There’s a lot of noise and a lot of controversy about this particular house but student housing belongs near colleges
I would also say this as a message to the neighbors:
We are trying to provide a good quality experience for the tenants. I am not a slum lord. I live a mile away. I love Long Beach. While we plan to offer this to students, we are letting them know that they are moving here to be a part of the fabric of the neighborhood and are supposed to be thoughtful and accommodating. We even saved the two-car garage in our remodel plans to limit street parking even though we didn’t have to by law. And as long as the ADU law exists – it will benefit the value of most of your homes, your home equity is not under attack.
We’re not apologizing for what we’re doing - we’re proud of that we’re doing - but we’re trying to mitigate the impact where we can. We want to be as thoughtful as possible to the neighbors, while providing badly, badly needed student housing to students who need it and we’re glad to have the opportunity to do so.