Long Beach, CA, approximately 25 miles south of Los Angeles, is probably best-known for beaches and the port. The 51-square-mile slice of Southern California received its name because of its long, wide beaches. And, the Port of Long Beach employs approximately one out of eight residents, while contributing approximately $5 billion a year in U.S. Customs revenues.
There is, however, more to this region than ship channels and sand. On the one hand, plenty of real estate and economic development is taking place. On the other hand is a serious lack of housing, with some parts of the city seemingly left out of the economic bounty.
Developers Adding Housing . . . and More
Developers have been busy building, and delivering, residential units in Long Beach. Others are making plans to recreate urban cores. A sample of what is underway includes:
- The 315-unit Shoreline Gateway at 777 E. Ocean Blvd. The project broke ground in early October 2018. Upon completion, it will be the city’s tallest tower.
- The 216-unit Oceanaire at 150 W. Ocean Blvd., which will be completed in February 2019.
- 442 W. Ocean Blvd. and 207 East Seaside, both developed by Ensemble Investments. These projects, which will soon be finished, offer 207 rental units.
Projects on the drawing board include:
- The mixed-use, 694-unit West Gateway at 600 W. Broadway which could top 40 stories once it’s completed. In addition to residential units, the project will include buildings dedicated to a variety of uses.
- The Long Beach Civic Center project on West Gateway will boast a new library, city hall and city offices, as well as retail, residential and hotel components.
- CSLUB Downtown Village will offer housing for 1,100 California State University, Long Beach students, as well as classrooms, lab space, and a venue for the school’s art museum.
Meanwhile, Long Beach has announced upgrade plans in preparation for the 2028 Summer Olympics. Dubbed the 8 x 28 Olympics initiative, plans include Belmont/Veterans Pier and arena renovations and airport improvements. Also under this umbrella is 100 E. Ocean Boulevard, a hotel that will boast 429 rooms, 23,512 square feet of restaurant areas, and 26,847 square feet of meeting space.
Digging Beneath Development
The problem, according to George Bustamante with Coldwell Banker Commercial BLAIR WESTMAC, is that what is under construction, and on the drawing board, are high-end residences. While Long Beach is in dire need of all levels of housing, “demand for the lower end is not being met,” Bustamante told the Long Beach Business Journal.
Adding to the problem is bureaucracy. According to Bustamante, developers want to build in Long Beach — but fees to do so have tripled. Additionally, “unless government really cuts loose all the red tape and makes it easier to build, it’s going to be a major problem for quite a while,” Bustamante’s CBCBW colleague, Steve Warshauer told the Business Journal.
Then there is the Westside Industrial Area, which is not seeing much in the way of development or economic vitality. While businesses on this side of town are doing well, they also face crumbling roads, constant litter and a pervasive homeless population. “All we focus on is security and cleanup in our neighborhood. It’s a joke,” Mike Zupanovich, long-time owner of Harbor Diesel & Equipment Inc. told the Long Beach Business Journal in another article.
Furthermore, an influx of marijuana growers and distributors mean higher warehouse lease rates, while a planned rail project by the Port of Long Beach could threaten some businesses in its path.
Will Opportunity Zones Provide Opportunity?
A provision for a new type of community development, known as the Qualified Opportunity Zone program, was folded into the Federal Jobs and Tax Cut Act of 2017. The program encourages long-term investments for low-income urban and rural areas identified by the U.S. Department of the Treasury. Long Beach has 19 opportunity zones, encompassing more than 2,300 acres, and providing benefits to potential developers.
The Qualified Opportunity Zone program could help with housing. However, it’s interesting to note that designated zones are on Long Beach’s east side, with only a few tracts designated west of Interstate 710, an area that could need more assistance.
One City, Two Tales
Housing shortages and potentially unequal economic development lie beneath the sunshine, sand and shiny new developments of Long Beach, while regulations negatively impact development. Still, it’s not all gloom or doom. Despite red tape, developers and investors are coming to Long Beach, as it offers great value, compared to surrounding areas. That value, combined with the potential of the 2028 Olympics and Opportunity Zone development, could help spur growth in areas that require it.