Renting A View Versus Owning It

Posted by Mike Michalski on Wednesday, April 18th, 2018.

So what's an ocean view worth?  It depends on whether you own that view or are merely renting it.

What do we mean?  Well, if your ocean view is unblockable, we say you own the view.  However, if it's possible for someone to build a structure next door that can wholly or partially block that view, we refer your view as being 'rented.'

Obviously, having an unblockable ocean view can be of great value.  Even a good view that may be blockable in the future is valuable, just less so.

How much less?  There, it gets hard to quantify as every view is different and the ability of the neighbor to block that view, either entirely or partially, is often a function of complex building size regulations and height restrictions, the latter based on the topography of the lot and how that building height calculation is made based on the average height of the four corners of the lot.

Exhibit A.

Take a look at the two homes in the lead photo above.  They didn't always look that way.  In fact, for years, the front home, located at the northeast corner of 25th and Highland in the Manhattan Beach Sand section, looked like this -

 

Notice that the structure in back - the longtime home of the parents of Leonard Armato, the former owner of the Association of Volleyball Professionals - had, for decades, enjoyed sweeping ocean views over the home in front.  

That ended when the front home was purchased in 2012 and a new home was constructed on that site in 2014. 

 
As you can well imagine, the owners of the property in back were more than a little miffed to see their westerly views disappear.  So miffed, in fact, that they appealed their neighbor's construction permit to the city council (which sided, 3-2, with their neighbor) and then took their neighbor and the City of Manhattan Beach to court (judicial, not volleyball).

However, in the case of Armato v. City of Manhattan Beach, the Superior Court ruled that the granting of the building permit was legal as there is no city ordinance that protects a property owner's view.  That ruling was upheld on appeal to the California Appellate Court.

Both Rancho Palos Verdes and Palos Verdes Estates have view ordinances that preserve a property's sight lines to the ocean from proposed structures, poles, trees and shrubbery at the time the property was purchased or from a predetermined date.  Manhattan Beach does not.

So clearly, in this case, the views from the back property were rented views and now the lease is up.

Exhibit B.

The recently-posted new listing at 2615 Crest Drive in the Manhattan Beach Sand section provides an object lesson in both owned and rented views.  This newer (built in 2016) contemporary-styled single family home has 3200 sqft with three bedrooms and a basement media room with glass wine cellar and is truly a work of art.  It sits on a half lot on the west side of Crest.  List price is $7,190,000.

 

But what's most impressive about this home are the sweeping, whitewater views which are protected (owned), thanks to the steep slope of the topography that caps the height of the building in front. 

Now the above photo is a tad stylized as there is actually an empty lot immediately to the south that is slated for future development, having just been purchased by a developer (currently in escrow).  However, as you can see from the photo below, that development may, at most impact views to the south, not to the west, but will necessitate some detailed knowledge by the listing agent of the city building code in order to explain that the allowable height of any new building on that lot will be well below the height of 2615 Crest.  As a result, the impact even on the southerly views will be minimal at best.

Contrast this home, however, with the brand new Steve Lazar-designed (and built) home that we recently sold at 316 27th Street, just on the other side of Crest Drive from 2615 Crest.

That contemporary home has a good 1,000 square feet of additional living space compared to 2615 Crest and is situated on a full (2700 sqft) lot.  However, what was especially nice about this home were the unobstructed views to the northwest, as seen below.

 

 

 

 

 

 

 

 

Still, one wonders how much more valuable this property might have been if, smack dab in the middle of its panoramic ocean view, one did not see - you guessed it - 2615 Crest (which is to the left of and outside the view photo shown here).

As a result, a bigger, brand new home on a full lot with some impressive ocean views of its own still ended up selling in December for $6.5 million, a price that is almost $700,000 lower than Crest's list price due, almost exclusively, to the partial obstruction of its view by 2615 Crest.

Obviously, owning a view versus renting it can have profound consequences for property values.

 

This entry was posted under South Bay Real Estate News, Manhattan Beach, and Ocean Views.