Getting a Crosswalk Painted in LA Takes a Few Years or More

Contents

1. I thought interest rates were what stopped the shovels
2. A letter that says “a few years or more”
3. What I ask first now: which slot is this stuck in
4. Worth a look
5. The one thing to take away

The gatekeeper said: “It is possible, but not now.” The man thought it over and decided to wait. He sat down beside the door, year after year, until his eyes had failed him, and only then did he ask his last question. —— Franz Kafka, “Before the Law” (1915, my own translation)

On the Odd Lots live episode recorded in Hollywood on 2026-09-28, developer Zach Lasry said the crosswalk he applied for at Clinton and Western had been approved, and the letter from the city put the construction timeline at “a few years or more.” He pays for it himself: roughly a million dollars, covering engineering, electrical, and a vault he has to build underneath for the city. In the same conversation, Bill McBride of the housing blog Calculated Risk said the builders he talks to name policy, zoning, and regulation as their number one problem in good times and bad. One caveat on the sample: this is Los Angeles, where around 95% of the land is zoned residential, which pushes the conclusion toward an extreme. In a city with mixed-use zoning as the default, discount the inference.

I thought interest rates were what stopped the shovels

My model going in was thin. Money expensive, projects stop; money cheap, projects go. Two years of commercial real estate headlines read that way too — vacancy, refinancing walls, the spread between cap rates and borrowing costs. So I filed “nothing gets built” under interest rates and told myself to wait for cuts.

My reading of zoning was shallow in a matching way. I pictured a tug of war between residents and developers: residents fear noise and crowding, developers want height, both sides argue at city hall, and whoever has the votes wins. That picture isn’t wrong, but it turns zoning into a question of opinion, as if buildings appear the moment enough people change their minds.

Put the two together and you get the conclusion I believed: real estate is capital plus politics, and how well you do the work barely matters.

A letter that says “a few years or more”

Lasry laughed when he described the letter. The approval came through; the timeline field read “a few years or more.” He said it reminded him of collecting vinyl as a kid, when record shops had a “99 cents and up” bin — the number quoted is a floor, so a hundred-dollar record can be sitting in there. Administrative timelines use the same grammar. “A few years and up” has no ceiling on the other end.

Asked what the holdup actually was, his answer wasn’t a person objecting. There’s no process to get one. The city’s response amounted to: sure, we’ll approve that, and it will cost a million dollars — engineering, electrical, plus a vault underneath for us. He paraphrased the posture as, so what are you going to do for us? What stays with me is that nobody is fighting here and nobody is voting. Someone wants to pay to speed it up and there’s no window to pay at. A crosswalk is about the smallest piece of public infrastructure a city builds. If that’s the queue, I’d rather not guess where anything touching power, drainage, or roadway lands.

The physical-parts story rhymes. Asked what’s hard to source, Lasry answered with one word: transformers. Tracy Alloway pushed on what “fight for it” means in practice — pay up, or befriend the supplier? His version: you find a guy who knows a guy, you buy it in advance, and you store it somewhere. So there may in fact be transformers in his garage. That half-joke sat with me. A small firm building out a few blocks has to hold part of its balance sheet as electrical equipment inventory to protect its own schedule.

One level up is zoning. Lasry said the plan for Western and Melrose — buying multiple buildings and developing a stretch together — came mostly from reading Jane Jacobs’s The Death and Life of Great American Cities, and her description of the sidewalk ballet in Greenwich Village: you experience culture by doing nothing but existing there. He grew up in New York and saw it firsthand, and felt its absence after moving to Los Angeles in 2014. LA has a few great main streets. Not many, and they tend to drift into feeling like airport shopping malls.

Then the line that reframed it for me. New York is basically all mixed use, so even on a street full of chains you can turn onto a side street and find something. LA has no such luxury, because roughly 95% of the city is zoned residential. Drain the culture out of a neighborhood’s main street and there is no backup — that’s it. McBride added that what Lasry is doing feels like assembling a symphony out of a district, where most developers put up one building. I had been treating zoning as an argument about height and density. This episode restated it as a question about how many seams the city leaves for things to grow in.

McBride brought two angles I hadn’t considered. California now bars reducing density: buy a six-unit building and you can’t replace it with four condos. In his beach community, people with money were buying two or three houses in a row to build one real mansion, and density was falling; that got stopped. He noted this cuts against his own interest, since it means more traffic — a man who lives off Pacific Coast Highway saying so on stage is worth extra attention. The second is the parking carve-out for ADUs (accessory dwelling units, small homes added on an existing lot): no off-street parking required, so in the communities building lots of them, the streets are packed tighter than before. One rule loosened supply and loosened parking at once, and both sides now cite it.

The last piece is their read on the business. Lasry said commercial real estate is having a hard time because for a long stretch the money came from financially engineered outcomes — arbitraging cap rates against interest rates, putting a room full of 140-IQ people on spreadsheets. With rates above the cap rate you bought the building at, that path closes, so you have to make the product good. He pointed out that LA has plenty of new apartment buildings, and what people think walking past is closer to “not another one of those generic boxes.” Rents where he operates are rising, which he attributes to investing in talent.

There’s also a neat observation buried in there about how expensive taste actually is. Asked how you turn taste into profit when good movies often don’t make money, Lasry said real estate gets lucky: if the tenant fails, which is sad, the building keeps its value and a new tenant generally shows up, whereas a movie nobody watches is a write-off. Betting on someone with a vision costs less here than it does in film. His tenant search imitates how A24 finds filmmakers instead of hunting for another Shake Shack — which he loves at the airport, and doesn’t need everywhere else.

What I ask first now: which slot is this stuck in

I’ve put the wait-for-cuts model away. The question I ask first now is which slot a thing is stuck in: money, permits, parts, or people. The fixes differ, and the time scales differ by orders of magnitude. Money turns over fastest; rates can reverse inside a year. Permits and zoning run in years. Equipment like transformers waits on someone’s factory. People who know how to make a district work take longest of all.

Seen that way, a few familiar puzzles loosen.

First puzzle: rates came down, so why didn’t anything construction-related move with them? If the real queue for a project sits at permits and equipment, financing cost is one slot out of four, and loosening it doesn’t shorten the schedule. Read Lasry’s line backwards — once financial engineering stopped working, you had to make the product good — and it says that during the easy years you got paid without making the product good. So the returns from those years told you about a spread, not about who can build. I used to look at leverage and rate sensitivity for companies like this and rarely asked which gate their projects were sitting at. That’s the homework I owe.

Second puzzle: when a story about an infrastructure boom shows up, how much of it can you trust? This episode hands you something checkable. The layer that’s genuinely binding shows up as “find a guy who knows a guy,” as buying ahead and warehousing it. Once a component reaches that state, whether anyone can raise prices on it is a separate test — look at margins, at long-term contracts, at whether the increase lands in their own pocket. Tight supply and pricing power are two different things. Transformers being scarce is a fact; who converts that scarcity into profit is a question the episode doesn’t answer, and I won’t answer it for them.

Third puzzle: policy headlines all sound good, so which ones move actual supply? The ADU story suggests a method: ask what else the rule loosened. Dropping the parking requirement got units built and filled the curbs, so parking becomes the next gate. California’s ban on reducing density is the mirror image, plugging a hole nobody was discussing — supply being legally subtracted. My habit now is to take a policy, ask which slot it moved, then ask which slot it pushed the pressure into.

A few things I can’t settle, so I’ll write them down. Lasry says rents are rising where he operates and credits product and talent; the episode gives no comparison figures, so I hold that as his judgment rather than evidence. McBride says builders name regulation first in good times and bad, and a complaint that permanent deserves a discount, because it’s also the most convenient one. The parking-and-self-driving stretch is speculation, and Joe Wiesenthal said himself he wants to do several episodes on it. McBride closed by naming two problems, housing cost and water, and then the show ended — I have no view on water, and I’m noting it as a reminder that the supply story here still has a harder ceiling nobody opened.

Worth a look

• Odd Lots, live in Hollywood, 2026-09-28, hosted by Joe Wiesenthal and Tracy Alloway with Bill McBride and Zach Lasry
• Calculated Risk, Bill McBride’s housing blog, long-running on inventory data and builder conversations
• Jane Jacobs, The Death and Life of Great American Cities (1961), source of the sidewalk ballet passage discussed on air

The one thing to take away

A price isn’t fully quoted until the waiting is in it. The most valuable line in that letter isn’t the million dollars, it’s “a few years or more” — you can raise money, and you can’t raise a floor-shaped timeline, because it has no top. I used to read cost as one number. After this episode I read two: money, and the queue.

Here’s something I’ve tried myself, and you can do it today: pick one thing you’ve been putting off for three months or more — nothing to do with investing is fine, a job change, a dentist, a conversation you keep not having. Write three lines. Which slot it’s stuck in (money, permits, parts, people), who controls that slot, and whether you can pay to convert money into time there. If line two has no name in it, I haven’t found the real bottleneck yet, and everything I’ve been doing is effort spent in a different slot.

Raw Markdown

This article is an educational discussion of investment method. It is not advice to buy or sell any individual security, offers no target prices, and does not analyze any current holding. Investing carries risk; make your own decisions or consult a qualified professional.