Today's LA Times has a story about the downturn in demand for condos downtown. There are many reasons floated for why demand is soft. Peter Gordon is quoted as saying the demand was overestimated in the first place. Others think the overall housing downturn is responsible. I think both sides are right, and there are other factors.
Downtown residential development is favored by those who want to achieve jobs-housing balance, a popular if outdated planning concept. The problem is, as I pointed out in my earlier post on what is smart growth, most households do not make residential decisions based on employment. Since downtown LA is largely devoid of 'neighborhoody' activities and destinations, it's a hard place to live.
The activities developments downtown have all focused on large scale projects such as the Staples Center, concert halls and other event venues. These are all new construction projects that leave no opportunities for new or start up restaurants or retails shops, and there are only so many Lakers games or Rascal Flatts concerts people are able to go to. As Jane Jacobs pointed out, communities need buildings of all sizes, ages and states of repair in order to attract a diverse array of new and existing businesses. Downtown LA doesn't have many opportunities for start ups. Until there is a "there there" that makes people feel like their neighborhood is their home and they don't have to get in their car and drive everywhere downtown will have a hard time attracting residents. The activities-housing balance is a far better ideal for planners to consider.