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Influx of money from mainland China turns LA suburb into the 'Chinese Beverly Hills'

One of the living rooms in a brand new home on sale for 6.99 million dollars feature 7 bedrooms and 7 3/4 baths, with more than 11,000 square feet of living space on a 30,000 square foot lot. The home was designed by PDS Studio with Chinese buyers in mind. These buyers, who have at times put in all cash offers, seek features like home theaters, "wok" kitchens, circular driveways and elegant foyers. (Rick Loomis/Los Angeles Times/TNS)
One of the living rooms in a brand new home on sale for 6.99 million dollars feature 7 bedrooms and 7 3/4 baths, with more than 11,000 square feet of living space on a 30,000 square foot lot. The home was designed by PDS Studio with Chinese buyers in mind. These buyers, who have at times put in all cash offers, seek features like home theaters, "wok" kitchens, circular driveways and elegant foyers. (Rick Loomis/Los Angeles Times/TNS)Read more

ARCADIA, Calif. – Most Los Angeles architects are lucky if they complete two or three houses by their early 30s.

Thirty-one-year-old Philip Chan, who runs a firm in Arcadia called PDS Studio, has already seen more than 75 of his residential designs built across the San Gabriel Valley.

He's still not the best-known designer in Arcadia. That title belongs to Robert Tong, 54, founder of the equally prolific firm Sanyao International.

A growing architectural rivalry between the two men is part of a construction wave that is radically remaking Arcadia. Blocks that were once sleepy, with single-story ranch houses from the 1940s set comfortably back from the street, are now lined with bloated villas pushed near the front of their lots as if clamoring for attention.

Chan and Tong, whose names are featured in San Gabriel Valley real estate listings as prominently as Frank Gehry's is on the Westside, tailor their showy Mediterranean-style houses to appeal to wealthy Chinese buyers, many looking to park some of their money here or to enroll their children in American schools.

In the last year alone, more than 100 houses have sold for more than $2.5 million in Arcadia, a city of 56,000 that sits just east of Pasadena at the base of the San Gabriel Mountains.

Prices in Arcadia are up more than 30 percent from their peak in 2007 before the housing downturn. The city, now 60 percent Asian, has become more expensive than Calabasas, the suburban enclave that is home to Justin Bieber and the Kardashians. Locally, as well as in Shanghai and Beijing, it has become known as the "Chinese Beverly Hills."

What's happening in Arcadia is less about big new houses and startling sales figures than how new patterns of immigration are transforming the architecture of Southern California. New arrivals from China are not victims of change, as they were when Southern California's original Chinatown was razed in the 1930s to make way for Union Station.

This time around they're the ones with the economic power. The architectural landscape is being remade not to displace them but as a magnet for their money.

When you drive around Arcadia, the vast amount of residential construction suggests an architectural free-for-all. Dust produced by work crews rises behind chain-link fences wrapped in green fabric – the telltale sign that a big new house is going up. The fabric is often covered with banners advertising home-theater specialists or signs reading, "We buy land and older houses."

In fact, the activity reflects a careful strategy, drawn from both the Chinese philosophy of feng shui and some basic real-estate math. The ideal tear-down site occupies a precise location that developers know will appeal to Chinese buyers: in the middle of the block, facing south. (North-facing houses are a close second; corner lots are less valuable.) Many of those buyers expect circular driveways in front, requiring a lot that is at least 75 feet feet wide.

The offices of Philip Chan's firm are not far removed from this frenzy, occupying the second story of a modest stucco building a few blocks from the historic Santa Anita Park racetrack. His parents, who moved to Southern California from Hong Kong when Chan was 7, own Sunny Construction & Development, one of the most prolific builders in Arcadia.

Chan's homes are typically designed with wine cellars, elaborate home theaters and double-height entry halls lined in marble. Many have elevators or three separate master-bedroom suites, the better to accommodate live-in relatives or visitors from China.

Nearly all of them have a second "wok kitchen" next to a larger and showier main kitchen. "Some of the Asian cooking requires a lot of BTUs for the burner, and it gets oily and messy, so that's a must-have," Chan said.

Other details that you might expect to see in a house of this scale – lots of fireplaces, say, or expensively landscaped backyards – aren't included because Chinese buyers show little interest in them.

One 4,500-square-foot house designed by Chan in a tidy Spanish idiom, with a red-tile roof, was on the market not long ago for nearly $2.5 million. It faced west on a fairly busy north-south street, dimming its appeal.

But a Sunny sales rep, Eddie Tsui, was eager to show off its amenities, including a wok kitchen and double-height foyer lined in gleaming marble. Asked what percentage of the prospective buyers were Asian, he laughed.

"I would say 100 percent. Actually, you are probably the first non-Asian person to set foot in this house."

Much of Arcadia, including its traditionally wealthier enclaves north of the Foothill Freeway, is governed by homeowners' associations with strict design-review standards. Northern Arcadia also has winding streets and protected oak trees, which make building a house complicated.

The result is that much of the high-end construction has been pushed south, to the relatively treeless flats below Huntington Drive.

Many of the priciest houses on those blocks were designed by Tong, who grew up in China's Sichuan province and came to the U.S. at 28. Before he left China, he designed large shopping centers and hotels.

He now works in a small three-person office. He is not a licensed architect, marketing himself, like Chan, as an "architectural designer."

In 2011, a 2,200-square-foot house on Walnut Avenue was purchased for $1.6 million and torn down. Its replacement? A six-bedroom, nine-bath, 11,945-square-foot house that Tong designed in a lavish Italianate style.

As a south-facing house with a circular drive, wok kitchen and 10-seat, 3-D home theater, the new residence ticked virtually every box on the Chinese-buyer checklist. It sold last year for $5.5 million. It recently went back on the market at $7.8 million. One block away, also on a south-facing lot, a new house with seven bedrooms in 11,000 square feet is asking $6.9 million.

"A long time ago in China there was no air conditioning, no electricity," Tong said. "Everything's natural – natural light, natural ventilation. So over the generations people get used to that. And facing south you have the best light and the best air flow."

He added: "Any new home on the market facing south, if we're talking about same quality, same design, it will definitely sell quicker and for more money."

Arcadia's construction boom can be traced back to rising prices and volatility in the Chinese real-estate market. Wealthy foreigners are eligible for EB-5 visas from the U.S. government if they invest at least $500,000 in an American business; 85 percent of those visas now go to Chinese applicants.

For them, Arcadia remains a bargain. Prices in Shanghai or Beijing can approach $2,000 per square foot, still far above the $650 per square foot in southern Arcadia.

"If they sell their apartment in Beijing, they can easily buy a house here," said Stone Liu, the editor of China Press, a newspaper based in Alhambra aimed mostly at immigrants from mainland China.

In Arcadia, houses put the wealth of these newcomers on full display. "In San Marino many of the biggest houses are hidden behind trees and fences," Liu said. The wealthiest Chinese buyers "want to be seen."

Regulating the new houses has meant striking a balance between supporting new construction and protecting the existing character of its residential streets. Arcadia established a design-review process in 2006 that calls on developers, in the name of aesthetic coherence, to choose "a single architecture style as a starting point in the design process."

Even so, developers are not required to appear before a citizens commission as they are in neighboring cities. Once builders figure out how to navigate the system, they can turn out one multimillion-dollar house after another.

"Our city is very much supportive of private property rights," said Jason Kruckeberg, Arcadia's assistant city manager.

The size and skyrocketing prices of the new Arcadia houses have begun, in turn, to remake the city's reputation. "For years San Marino has been touted as the pinnacle of the Chinese dream," said Li Wei Yang, an archivist at the Huntington Library, Art Collections, and Botanical Gardens and a specialist in Chinese immigration. "Arcadia is catching up."

Most of the city's new high-end houses, their architecture a pastiche of European, American and Chinese styles, fountains gurgling endlessly out front, are wildly out of scale with the older residential fabric. Overwhelming their modest lots, they resemble the so-called Persian Palaces wealthy Iranian immigrants have built 20 miles west in Beverly Hills.

Yet to dismiss them as mere eyesores would be to miss a larger story about immigration and architecture in Southern California in an age of globalization.

The houses Tong and Chan design represent a triple echo. First, European architectural styles were widely copied in American suburbia, producing thousands of so-called McMansions.

Then those styles began appearing in Chinese subdivisions, many of them designed and built by American firms. (A decade ago, a Chinese developer teamed up with an architect from Newport Beach to create a high-end gated community north of Beijing called "Orange County.") Now similar houses are showing up in pockets of Chinese immigrant wealth in Southern California.

Their architecture is reassuring to Chinese buyers not just because it suggests American suburban plenty. It also reminds them of newly built and highly sought-after residential architecture on the outskirts of Shanghai, Beijing and Guangzhou.

Deng Xiaoping famously described his grand experiment mixing communism with capitalism, begun 35 years ago, as "socialism with Chinese characteristics." Think of the new Arcadia houses as McMansions with Chinese characteristics.

Their high prices are produced by a near-perfect balance, in post-immigrant Southern California, between an increasingly intense flow of money from mainland China and an established Chinese American community.

Tong and Chan know what newly minted Chinese millionaires are looking for in an American house. At the same time, they've been working in the San Gabriel Valley long enough to forge close relationships with contractors, building inspectors and real-estate agents, many of whom are not Chinese.

There's also the history of Arcadia itself to bear in mind.

In the late 1870s, Elias "Lucky" Baldwin, the city's founder and one of Southern California's great land barons, hired architect Arthur A. Bennett to design a guest cottage for his sprawling ranch. Bennett's eclectic design mixed the English Queen Anne and American "stick" styles with elements of Swiss chalet architecture and references to Moorish landmarks and Chinese pagodas. The budget for the house, now part of the Los Angeles County Arboretum, was vast, making it a cottage in name only.

With its high ceilings and exterior dripping with filigree, it is as much the product of eclectic architectural influence – and showy new money – as even the flashiest Arcadia houses by Tong and Chan.


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