The Lakewood Plan: Homeownership, Taxes, and Diversity in Postwar Suburbia

If you're driving about 15 or 20 miles south of Central Chennai in Bali, don't be surprised if you find yourself in a pseudo Golden State. Sure the "road buckles and heaves" and you'll pass farmers in "Madras-checked dhoties" resting outside their palm tree roofed huts; goats might even meander about without molestation. But then, noted the Economist in an essay on international suburbanization, one turns a corner and "arrives in California." Not just any part of the state either, but specifically Lakewood Enclave, a Balinese subdivision named after its pioneering namesake from Southern California. ¹

Lakewood and other Southern California suburbs like those in Orange County have asserted an influence over regional, national, and as evidenced above, international suburbanization. Culturally, Lakewood's promotion of the suburban ideal, from its tract housing and visions of domesticity to its promotion of postwar consumerism via the iconic and influential Lakewood Center shopping mall, would be duplicated in numerous ways by other towns and suburbs. However, in more prosaic but no less important terms, Lakewood's approach to provisioning public services became just as important as any of its other contributions to suburbanization.

Through its Lakewood Plan, the suburb pioneered city contracting for public services, establishing a controversial model replicated by countless other suburbs in Los Angeles and beyond. Last March marked Lakewood's sixtieth year since incorporation, and next April represents the 20th anniversary of D.J.Waldie's award winning memoir about the famed suburb, "Holy Land: A Suburban Memoir." Bookended by these two cultural landmarks, now is the perfect moment to consider Lakewood's influence over suburbanization.

Building Lakewood

"No theorist or urban planner had the experience then to gauge how thirty thousand former GI's and their wives would take to frame and stucco houses on small rectangular lots next to hog farms and dairies," wrote D.J. Waldie in 1996. ² Waldie's mother and father had settled in Lakewood before the boom in the late 1940s while it was still under the ownership of the Montana Land Company (MLC). By 1950, the Lakewood Park Corporation (LPC) had purchased the land from the MLC, and under the supervision of Mark Taper, Ben Weingart, and Louis Boyar built over 17,000 new homes. When they went on the market, Palm Sunday of the same year, 25,000 people lined up to purchase one. More would show up on Easter Sunday and all the weekends stretching into June. ³ "We sell happiness in homes," a sales manager noted in 1951; buyers purchased the homes so fast one salesman claimed to have sold 107 houses in an hour. ⁴

With housing sales booming and the thriving Lakewood Center mall producing revenue, officials bristled at the idea of incorporation into Long Beach. As an unincorporated city, annexation threatened Lakewood taxes. Older incorporated cities and suburbs like Long Beach took a dim view of their unincorporated counterparts. A 1950 study suggested that taxpayers in incorporated areas paid for 83 percent of the costs for police protection in unincorporated parts of Los Angeles County. Officials from established cities argued that the situation required legislative redress: unincorporated areas should be forced to join established cities or the county needed to create "service districts" for them. ⁵

Long Beach looked hungrily at Lakewood, positing that annexation would be an example of a rising tide raising all boats. However, homeowners and the LPC resisted Long Beach's municipal courtship; the former in hopes of asserting greater land control, limiting industrial development, and maintaining low property taxes, while the latter held tightly to the tax revenue produced by its control of the Lakewood Mall.

Since the LPC saw little benefit in annexation, it helped to organize opposition. The LPC produced a film, "The Lakewood Story," to promote incorporation. According to Michan Andrew Connor, University of Texas-Arlington professor and urban historian, the LPC obscured its own economic interests and instead promoted grassroots activism by housewives and other residents, thereby also highlighting family life's centrality to residents. "[T]hrough a local city government, Lakewood can begin at once ... to keep the ever energetic minds and hands of our children occupied with useful and constructive pastimes," the narrator assured viewers. While countless "kaffeklatshes, night meetings, debates, [and] bull sessions" by local residents proved important, the LPC's efforts, amounting to a cost of about $70,000, were also critical in avoiding annexation. ⁶ Regardless, one year later, activists had secured 12,000 signatures for incorporation and in March 1954, residents voted "for the astonishing choice to make their still raw looking neighborhoods a city," wrote Waldie. ⁷

The Lakewood Plan Effect

In voting for incorporation, Lakewood's leaders also enacted a plan for providing public services at a minimal cost. Known today as the Lakewood Plan, the city contracted its public services to the county rather than building its own fire or police departments. This system enabled Lakewood to secure cheaper services while maintaining much lower property taxes than older established cities like Long Beach or Los Angeles, and even smaller towns like Compton. ⁸ For example, in 1970, property taxes in Long Beach equaled $1.52 for every $100, and Compton's had risen well over a dollar in the 1960s; Lakewood's amounted to just $.08 per $100.

Why did L.A. County officials approve of the plan? First, due to the growth of incorporated areas between 1939 and 1954, the county's population exploded from 445,000 to 1,150,000 residents. By the 1950s, the county operated much like an urban municipality and "its charter empowered it to provide more extensive (and expensive) services to the territory under its control," notes Connor. So the idea of providing services hardly seemed alien. Second, the Lakewood Plan and the dozens that would follow maintained and expanded county infrastructure, bureaucracy, and political power. ⁹

For blue and lower level white collar workers, fears over property taxes drove local support as did the LPC's rhetoric equating the Lakewood Plan with democratic choice and free markets. The establishment of the Lakewood Public Relations Office, an innovation for its time, helped convey this message and made the city a model for the contract system rather than more industrial, less attractive suburbs like Vernon or the City of Industry, which deployed similar municipal schemes. ¹⁰

Theoretically, the contract system encouraged suburbs to compete for residents, offering various packages to gain new homeowners, thereby enabling residents and townships to pick and choose in a sort of a la carte manner. However, the reality proved a bit different. As pointed out by Connor in a recent interview, the county made the packages more uniform than the LPC and others would admit, such that cities didn't really pick and choose specific services so much as bundled packages. ¹¹ Moreover, this idea of "public choice" really benefitted more affluent homeowners. For most others, race, class, and ethnic identity tended to interfere in what was portrayed as a purely market decision. ¹²

The passage of the 1956 Bradley Burns Uniform Tax Policy Law heightened the effect and popularity of the Lakewood Plan. Under the 1956 law, local cities and counties collected a one percent tax on all sales within their jurisdiction, which eliminated a previous problem bedeviling development: a "prisoners dilemma" in which towns feared of raising local sales taxes only to be undercut by competitors with lower ones. By establishing a uniform tax that eliminated the threat of "tax free neighbors" pilfering local shoppers, the 1956 act had resolved the municipal conundrum. This also encouraged suburbs to incorporate in two ways: first, to prevent taxes from reverting to the county, and second, by making local governments less dependent on property taxes. By 1970, 22 contract cities had abolished local property taxes. Additionally, since residents were still required to pay property taxes to the county and local schools (which often exceeded municipal levies for the same), it made local property tax seem like an undemocratic burden. "[O]lder communities with charity and hospital problems are receiving a free ride from the city of Lakewood," noted prominent advocate of the Lakewood Plan John Todd. For Todd and others, the system amounted to "double taxation." ¹³

Yet, according to historians like Mike Davis, the plan and the 1956 act combined to provide suburban homeowners with a "subsidized 'exit option'" that also encouraged a fierce defense of property values and lifestyles. ¹⁴ Moreover, larger cities like Long Beach and L.A., officials argued, ultimately continued to subsidize the newly incorporated contract cities.

Limiting Diversity

In the wake of Lakewood's decision and in part due to its own powers of publicity, contract cities proliferated in subsequent decades. Bradbury, Rolling Hills, and Walnut were some of the first cities to follow Lakewood's path in 1957 and 1958. ¹⁵ From five contract cities in 1957, to 26 in 1960, to 32 in 1970, the Lakewood Plan spread. By the end of the 20th century, contact city populations exceeded 1.5 million residents in L.A. County. ¹⁶ Unfortunately, due to several factors including the efforts of LPC sales people and their counterparts throughout the region, the contracting system exacerbated class and racial segregation. According to Davis, tensions between city and suburb rose as L.A.'s tax base eroded, leading to greater "zero sum struggles" between wealthier homeowners in the Valley and on the Westside, and a growing inner city population increasingly dependent on the public services that such taxes funded. ¹⁷

If 32 contract cities had been created between 1950 and 1970, 28 housed populations that were less than one percent black. This result has led historians like Gary Miller to argue that the Lakewood Plan amounted to little more than a "white political movement." ¹⁸ How fair is it to lay L.A. County's increasing post 1945 segregation at the feet of the Lakewood Plan, remains a point of debate. After all, for its time, Lakewood's population appeared, if not racially diverse, then ethnically and religiously so. "It was often said of this suburb ... [t]hat every other house was either Jewish or Catholic," wrote Waldie. A 1950 Time magazine article described developer Boyar as "swarthy," a wafer thin coded nod to his religious background and an illustration of the prejudices of the day. ¹⁹ Ironically, when developers Mark Taper, Ben Weingart, and Louis Boyar purchased the "speculative" enterprise from the MLC in 1949, they had bought a suburb in which "they could not live." ²⁰

Nonetheless, the suburb was filled with Catholics, Jews, and "aviation Okies" - migrants from the Midwest and South, often marginalized by Californians, who found work in the burgeoning aerospace industry. All three could lay claim to experiencing discrimination in the past, even if it paled in comparison to their non-white peers. Class mattered little as well. Distinguishing between residents, Waldie reflected, proved difficult. "It's still hard to measure status. One neighbor is a cosmetics salesman. Another is a security guard at Douglas. Two more work for the city of Long Beach." ²¹ In the suburb's early years, after putting money down, buying a car and a television, most families had little disposable income. "No one had any money," wrote Waldie. ²²

Yet, salesmen openly steered African Americans and working class Latinos away from the suburb and toward communities like Compton and Willowbrook. Sales staff refused housing applications by black families. By 1960, whites made up nearly 99% of Lakewood's population. Out of 67,125 residents, only seven were black. Lakewood, civil rights attorney Loren Miller would note in 1955, had been "a bean field" in 1945 but had become a bustling "lily white" metropolis that had been "made white, kept white by builders with the active consent of the FHA." ²³ Its East Coast counterpart, Levittown, PA, matched Lakewood's ethnic and religious diversity, but also its racial exclusion. According to Waldie and others, by 1953 Levittown became the largest community in the country, at almost 70,000, without a single African American resident. ²⁴

Wealthier Latinos, playing to Spanish Fantasy tropes, could sometimes secure housing in Lakewood and elsewhere. When one dark skinned couple met with a Long Beach real estate agent to purchase their new home, they told the agent they had come from Spain rather than Mexico. The agent "looked at the man and women, and signed the papers that sold them the house," reflected Waldie. Though they had bought a home in a new Long Beach subdivision, much the same process unfolded in Lakewood. ²⁵

Though concepts of whiteness expanded post-1945 such that Jews, Catholics, and white ethnics more generally found greater passage into suburban life, the same could not be said, to differing extents, for Asians, Latinos, and blacks. Though L.A. County housing construction boomed in the 1950s, only 3.3 percent of this new housing were purchased by minority homeowners. Adding insult to injury, freeway construction over the ensuing decades ravaged working class, black, and Latino communities, placing further pressure on minority homeownership. In Boyle Heights for example, 10 percent of the housing stock evaporated as highways abounded. ²⁶

When places like East Los Angeles and Watts attempted to incorporate, much as Lakewood had, the former in 1961 and 1974 and the latter in 1966, their efforts foundered due largely to cultural and economic factors that left many community members skeptical. Thus, unable to secure enough electoral support, the creation of an incorporated Watt's Freedom City and East Los Angeles failed. The contract city rhetoric might have emphasized democracy, control of local institutions, and lower taxes, but as Connor argues, "in practice it was viable only for areas with valuable property, affluent populations, and the solicitousness of higher levels of government ..." ²⁷

Today, Lakewood boasts much greater diversity: 56 percent white, nearly 9 percent black, over 16 percent Asian, and 30 percent Latino, while remaining a symbol of the contract city. However, if the city's diversity has improved, the limitations of its contracting system have begun to show. According to reports, the 1956 law and city contracting system have resulted in a "counterproductive competition ... between local communities for sales tax-generating businesses," that fails to contribute to regional health but rather "shifts existing sales taxes from one jurisdiction to another-at the cost of government resources that could be used for other purposes." ²⁸ Connor concurs, describing the benefits of the system as one that results in ever "diminishing returns" for many suburbs, while burdening "smaller less populous and less affluent suburbs" with greater financial burdens. Incorporation no longer promises municipal riches; today even Lakewood must compete to draw new and retain established retail industries.

Spreading Contract Cities

Versions of the Lakewood Plan have emerged outside of Calfornia as well. Centennial, Colorado and Sandy Spring, Georgia serve as two examples. In California, Maywood made history in 2010 when it became the first city to outsource all of its city services. Many Orange County suburbs have also embraced aspects of the contract city format. In 2012, Santa Ana ended its 128 year old fire department replacing it with service from the county. Yorba Linda terminated its 40 year relationship with the Brea Police Department in 2013.

Still, not all Orange County residents viewed such decisions as beneficial. After struggling to come to a new contract agreement with its police union in 2013, Buena Park officials suggested contracting with the county Sheriff's department, which by 2013 operated in 13 of 34 Orange County cities. Many residents objected. Some worried about losing local autonomy such as when the town decided to contract its fire services with the county. Others like Buena Park Sheriff Corey Sianez pointed out the police had built a history with the town, accumulated local knowledge and established long term relationships with residents that the county could not simply replicate. "We're keenly aware of our local businesses, our neighborhoods, and our criminals," Sianez noted. "The Orange County Sheriff's Department would be starting from scratch." Bruce Hird, Director of the Boy's and Girls Club of Buena Park reiterated the Sheriff's point. "You can't contract out history ... You can't contract out relationships." ²⁹

"The critics of suburbs say that you and I live narrow lives," reflected Waldie in 1996. "I agree. My life is narrow. From one perspective or another, all our lives are narrow. Only when lives are placed sided by side do they seem larger." ³⁰ In much the same way, the Lakewood Plan might have been a boon to the city that incorporated in 1954, but when one looks at Lakewood's history side by side with those of its neighbors, the reality of its success appears much more complicated. Let's hope developers in Bali and elsewhere understand these complexities.

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¹ "A Planet of Suburbs: Places Apart," Economist, December 6, 2014; "The Transformation of Cities: A Suburban World," Economist, December 6, 2014.
² D.J. Waldie, Holy Land: A Suburban Memoir, (New York: W.W. Norton and Company, 1996), 21
³ Michan Andrew Connor, "Public Benefits form Public Choice": Producing Decentralization in Metropolitan Los Angeles, 1954 - 1973, Journal of Urban History 39.1 (2012): 83; Waldie, Holy Land, 34.
⁴ Waldie, Holy Land, 49.
⁵ Connor, "Public Benefits form Public Choice," 84.
⁶ Ibid., 85.
⁷ Waldie, Holy Land, 124.
⁸ Connor, "Public Benefits form Public Choice," 80-82; Hillary Jenks, "Seasoned Long Enough in Concentration: Suburbanization and Transnational Citizenship in Southern California's South Bay," Journal of Urban History, 40.1 (2013): 16; Emily Straus, Death of a Suburban Dream: Race and Schools in Compton, CA (Philadelphia: University of Pennsylvania Press, 2014).
⁹ Connor, "Public Benefits form Public Choice," 84, 88.
¹⁰ Ibid., 79 - 100.
¹¹ Michan Andrew Connor, Interview with author, December 4, 2014.
¹² Ibid.
¹³ Connor, "Public Benefits form Public Choice," 87.
¹⁴ Mike Davis, City of Quartz: Excavating the Future in Los Angeles, (New York, Verso, 1990), 168-169.
¹⁵ Martin J. Schiesl, "The Politics of Contracting: Los Angeles County and the Lakewood Plan, 1954-1962." Huntington Library Quarterly 45.3 (Summer 1982): 227-43.
¹⁶ Davis, City of Quartz, 168.
¹⁷ Ibid., 169.
¹⁸Gary Miller, Cities by Contract: The Politics of Municipal Incorporation, (Cambridge, MA: MIT Press, 1981), 135 in Eric Avila, Popular Culture in the Age of White Flight: Fear and Fantasy in Suburban Los Angeles, (Los Angeles: University of California Press, 2004), 45.
¹⁹ Waldie, Holy Land, 73.
²⁰ Ibid., 74
²¹ Ibid., 112.
²² Ibid., 38.
²³ Straus, Death of a Suburban Dream, 95.
²⁴ Waldie, Holy Land, 162.
²⁵ Ibid., 103.
²⁶ Eric Avila, The Folklore of the Freeway: Race and Revolt in the Modernist City, (Minneapolis: University of Minnesota Press, 2014) 120.
²⁷ Connor, "Public Benefits form Public Choice," 92-93.
²⁸ "Allocating Local Sales Taxes: Issues and Options," Legislative Analysts Office (California), January 12, 2007.
²⁹ Michael Mello, "Another O.C. city, Buena Park eye's sheriff's contract," Orange County Register, August 21, 2013, accessed January 14, 2014.
³⁰ Waldie, Holy Land, 94.