Walk down a quiet street in Bel Air or the bird streets of the Hollywood Hills at night. It’s eerie. You’ll see these massive, glass-walled architectural marvels perched on the cliffs, glowing with "security lighting," but there’s nobody inside. No flickering TVs. No clinking dinner plates. Just empty infinity pools reflecting the smoggy sunset. The Wall Street Journal recently dug into this phenomenon, and honestly, the WSJ empty homes Los Angeles report confirmed what many locals already suspected: thousands of units are sitting cold while the city faces a historic housing crunch.
It’s weird.
While the city's streets are crowded, its most expensive square footage is often a ghost town. This isn't just about a few rich people having vacation homes they visit twice a year. It's a fundamental shift in how real estate functions in a globalized economy. For some owners, these houses aren't homes at all. They're basically gold bars with plumbing.
Why the WSJ empty homes Los Angeles report hit a nerve
The Journal's investigation highlighted a jarring disconnect. We’re talking about a vacancy rate that feels impossible given the demand. According to the data cited, there’s a significant concentration of "non-primary" residences in the city's most affluent ZIP codes. Think 90210, 90077, and 90069.
People are pissed.
If you're a local trying to buy a starter home in Silver Lake or even a condo in the Valley, seeing 4,500-square-foot mansions sit empty feels like a slap in the face. But the economics are complicated. The WSJ empty homes Los Angeles narrative points toward the "buy-to-leave" trend. Investors—both domestic and international—park their cash in LA real estate because it’s historically been a safe bet. Better than the stock market in some years.
But houses aren't just assets. They're part of a neighborhood's fabric. When a block is 40% empty, local businesses suffer. The coffee shop on the corner doesn't get that morning foot traffic. The dry cleaner loses clients. You end up with "zombie neighborhoods" where the only people you see are the landscaping crews and the occasional security patrol.
The "Mansion Tax" and the race to sell
You can't talk about empty homes in LA without talking about ULA. Measure ULA, often called the "Mansion Tax," changed the game. If you sell a property for over $5 million, you’re looking at a 4% tax. Over $10 million? That jumps to 5.5%.
Before the tax kicked in back in April 2023, there was a literal firestorm. Celebrities and ultra-high-net-worth individuals were practically giving away cars or offering million-dollar commissions to agents just to close deals before the deadline. The Wall Street Journal noted that this created a weird "cliff" in the market. Since then, the luxury market has been... well, it’s been sluggish.
Some owners would rather leave their properties empty and wait for a legal challenge to overturn ULA than sell and take the tax hit. It’s a game of chicken played with multimillion-dollar stakes.
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Why do they stay empty?
- Maintenance costs are high, but appreciation is higher. Even with property taxes and HOA fees, a 5% annual increase in value on a $20 million home is a million bucks.
- Privacy concerns. High-profile owners don't want to deal with the "wear and tear" of renters, even high-end ones.
- Speculative building. Developers built these "white box" mansions specifically to flip. If they don't sell immediately, they sit. Empty. For years.
It's not just the ultra-rich
While the WSJ empty homes Los Angeles coverage focuses heavily on the high-end stuff, there’s a trickle-down effect. When the top of the market stalls, it creates a logjam.
I talked to a real estate analyst recently who pointed out that Los Angeles has one of the lowest housing inventories in the country. When you combine that with the "ghost lights" of vacant luxury units, the optics are terrible. Some city council members have floated the idea of a vacancy tax, similar to what Vancouver or San Francisco implemented. The idea is simple: if your unit sits empty for more than half the year, you pay up.
But enforcement is a nightmare. How do you prove a house is empty? You check utility bills? People just leave the lights on timers and the sprinklers running. You check mail? They hire services to pick it up. It’s a cat-and-mouse game that the city is currently losing.
The myth of the "foreign investor" bogeyman
There’s this popular idea that it’s all Chinese billionaires or Russian oligarchs buying up the hills. While international capital is definitely a factor—the WSJ report doesn't shy away from that—a huge portion of these empty homes are owned by domestic LLCs.
Wealthy Americans use these properties as "pied-à-terres." They live in New York or Miami and want a place to stay when they’re in town for a week of meetings or the Oscars. To them, the house isn't "empty." It's "available."
But to the guy living in an apartment three blocks away whose rent just went up 10%, it’s a wasted resource.
The reality of the "zombie mansions"
Some of these homes are actually falling into disrepair. You’d think a $15 million home would be pristine, but if it sits for three years without a resident, things go sideways. The HVAC systems fail. Mold creeps in. Squatters have even become a legitimate issue in some of the more isolated parts of the hills.
The Journal highlighted cases where abandoned-looking mansions became magnets for "mansion parties" hosted by people who didn't even own the place. They just broke in, set up a DJ booth, and charged cover. It’s wild. The contrast between the intended luxury and the actual reality of these vacant shells is honestly pretty stark.
Comparing the Vacancy Stats
Look at the numbers. Los Angeles has roughly 1.5 million housing units. Estimates on the "true" vacancy rate vary wildly depending on who you ask. The Census Bureau says one thing, while independent studies focused on "investor-owned" properties say another.
What we do know is that in neighborhoods like Downtown LA (DTLA), the vacancy rate in high-end luxury apartments has hit nearly 20% in specific buildings. That’s massive. Yet, rents stay high. Why? Because many of these buildings are owned by institutional investors who would rather have an empty unit than lower the "market rate" on paper, which would decrease the appraised value of the entire building.
It’s "spreadsheet logic" that ignores human reality.
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What happens next?
The city is at a crossroads. The WSJ report on empty homes in Los Angeles has forced a conversation that politicians have tried to avoid because it involves poking the bear of property rights.
- Increased Vacancy Taxes: Expect more push for a Vancouver-style tax. It's politically popular even if it's hard to execute.
- Adaptive Reuse: There’s a movement to turn some of these stagnant luxury spaces—especially in DTLA—into something more functional, though the "mansion" problem in the hills is harder to solve.
- Market Correction: Eventually, the carrying costs will get too high. Interest rates have stayed higher for longer than most developers expected. The "carrying cost" on a $10 million loan is no joke.
Actionable steps for the average Angeleno
If you’re frustrated by the state of LA real estate, sitting around being mad won't change your zip code. Here’s what you can actually do to navigate this weird landscape.
First, stop waiting for a massive "crash." People have been predicting the LA "mega-crash" for a decade. While the luxury market is cooling, the demand for mid-tier housing is so high that a total collapse is unlikely. If you're looking to buy, look at the "peripheral" neighborhoods that aren't target-rich environments for global investors.
Second, track the ULA impact. If you are in the market for something high-end (or even just curious), keep an eye on properties that have been on the market for 180+ days. These are the "empty homes" the WSJ is talking about. These sellers are often desperate to avoid further carrying costs and might be more flexible on price than the listing suggests.
Third, engage with local zoning meetings. The reason empty mansions are such a problem is that we don't build enough of everything else. The "NIMBY" (Not In My Backyard) culture in LA has restricted supply for so long that these vacant units feel like a bigger deal than they would in a healthy market. Supporting high-density housing near transit is the only long-term fix for the scarcity that makes these "ghost homes" so profitable for investors.
The WSJ empty homes Los Angeles investigation is a wake-up call. A house should be a home, not just an entry on a balance sheet. Until the city finds a way to prioritize residents over "portfolio padding," the hills will keep glowing with the lights of people who aren't there.