Downtown L.A. is doing better than you think it is, but the government needs to do more to energize the city, said one of the region’s longest and most successful real estate leaders.

Bill Witte is retiring after running Related California, a large-scale developer of both luxury and low-income apartments, for more than three decades.

Among the high-profile projects he oversaw was the creation of the Grand LA, a $1-billion mega-project with housing, a hotel and restaurants designed by Frank Gehry across the street from the architect’s famous Walt Disney Concert Hall in downtown Los Angeles.

Witte founded Related California in 1989 with Stephen M. Ross, chairman of New York-based Related Cos. Related California is now one of the largest real estate companies on the West Coast with a portfolio of more than 21,000 residential units, including the Century condominium skyscraper in Century City, where television heiress Candy Spelling lives on the top two floors.

Related’s most recent project is 700 Broadway in Santa Monica, an upscale apartment complex with a private park, a grocery store and an Equinox Fitness Club. Related is also building a housing project for low-income families and seniors called Alveare in downtown Los Angeles’s South Park neighborhood.

Witte’s interest in development dates to his childhood in New York. His father was a builder, and young Witte enjoyed tramping around construction sites.

“I developed a fascination with cities,” he said.

Bill Witte at 700 Broadway in Santa Monica.

(Jason Armond / Los Angeles Times)

He went on to earn degrees in urban studies and urban planning from the University of Pennsylvania and broke into the field as a member of the Philadelphia planning staff in the freewheeling administration of Mayor Frank Rizzo in the mid-1970s, when the city had 25,000 abandoned housing units.

“It was very parochial in Philadelphia, part Rust Belt and part ‘Sopranos,’ ” Witte said. “I loved it.”

Witte later served as San Francisco’s deputy mayor for housing before joining Related Cos. More than 35 years later, he is stepping down as chairman Jan. 1. Succeeding him will be Gino Canori as chief executive of Related California’s market-rate division, and Ann Silverberg as chief executive of its affordable division. Witte will become chairman emeritus.

The Times met with Witte to discuss the challenges facing the region and the real estate industry in the years ahead. His answers have been edited for clarity and brevity.

Downtown’s reputation has suffered since the pandemic as many people express concern about homelessness and safety. How could it get back on track?

First of all, I’d say, it’s not as bad as you think it is. It’s better than you think it is. It’s still the cultural core of the region.

I don’t have a single magic bullet for addressing the homeless problem. It’s not just about bricks and mortar and shelter. It’s got all sorts of issues attached to it. I’m not completely happy with everything that’s gone on in L.A., but frankly, I think Mayor Bass and her team have done a pretty good job since they’ve been in office, trying to address the homeless problem. They’re making some progress.

700 Broadway, Bill Witte’s latest luxury apartment complex project.

(Jason Armond / Los Angeles Times)

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I’m told that the sidewalks are cleaned like once a month. It has to be more frequent.

You really have to go out of your way to show that you’re trying to make a difference. I’m told there are food carts and things near the entrances of buildings. You add all these things together, and if you’re going to work downtown, it’s not the most welcoming environment.

They always say don’t sweat the small stuff, but I think it’s the small stuff that ultimately makes a difference here.

Prominent firms have decided they’d rather have their offices somewhere else, such as Century City or Pasadena. What can be done about that?

I think the city, the mayor’s office, needs to become very engaged in talking to tenants who are still here. What are the problems downtown? What can we do about them? We’ve seen a very big change in San Francisco in that regard, actively promoting the city and taking steps. I think there needs to be active discussions with people, including some who have left downtown.

Make sure that people’s security needs are being addressed, have some visible success stories and actively promote it. Downtown is just one neighborhood in the whole city, but it’s probably the one that was most affected by the pandemic.

What do you say about complaints about the lack of public-sector employees downtown, which makes the sidewalks, stores and restaurants less busy?

What do you think the private sector thinks when the government, with taxpayer dollars, can’t seem to get people to come back to the office? That is not helpful. There are examples where the private sector looks and says, ‘Wait a minute, maybe we shouldn’t be here either.’

The real estate community has been critical of 2022’s Measure ULA, saying it cuts into profits and makes developments financially unfeasible. How is it affecting your company?

We’re on both sides of that. Our Alveare project that just started in construction has 105 affordable units for low- and extremely low-income families, got $10 million from the city’s ULA funds.

In the market-rate commercial real estate world, it’s a problem. It is not helpful. It’s part of the package of things that the investment community has been concerned about in L.A. You can agree or disagree whether that should be true, but it is a fact. And I know Mayor Bass is trying to work on some modifications to make it perhaps less onerous. But again, it comes up because there is no obvious source of funds for affordable housing.

Sometimes there is pushback from neighbors when affordable housing is proposed. How would you address their concerns?

We’ve done almost 20,000 units across the state, including in L.A., and we’ve taken just neighbors on bus tours of some of our existing developments that are not just new but maybe 10 years old.

It’s not just us. The affordable housing world has grown significantly over the years, including qualitatively. Most projects have on-site services and the design is getting better. We’ve won more design awards for affordable housing in California than any other developer.

It doesn’t always require spending gobs more money. It’s being thoughtful, thinking about the long term, thinking about the public spaces, which is what brands these projects. And since we’ve often done affordable development next to or as part of market-rate housing, it forces us to think that way.

I think the financial side is the bigger challenge right now. You will hear pushback that these things are ridiculously expensive — $800,000 a unit to build. Why is that? Well, first of all, everything is more expensive. But there is a longtime tendency, not just in L.A., to apply a whole series of admittedly desirable public policy objectives onto affordable housing because the government is involved.

Some of it is labor standards, higher disability requirements — all of that adds to the cost. You can argue on their behalf, but I think local and state governments are beginning to understand that it’s going to be very difficult to keep selling initiatives here, not because of NIMBYism, but because it’s hard to justify the cost.

There is a perception among developers that it is tough to build a financially successful project in L.A beyond such money-related challenges as construction costs, labor shortages and high interest rates faced by developers in other California cities. Why is that?

You’ve got a relatively young City Council that has been pushing some very progressive goals, not just on housing, but also on minimum wage and other issues.

The challenge for L.A. right now in the growth area is sending some signals to the entities that provide debt and equity to these projects that you are very concerned with protecting existing tenants who are income- and rent-stressed, but you’re not opposed to some growth. Without growth, there’s not going to be any growth in revenues and the city’s budget is going to continue to be stressed.

There are other parts of the state where the investment community looks more favorably for that reason.

Immigrant truck drivers have sued the California Department of Motor Vehicles for terminating the commercial driver’s licenses of thousands of drivers, alleging that the decision violated their rights and threatened their livelihood.

California’s DMV gave a 60-day cancellation notice to 17,000 drivers on Nov. 6 after a federal audit found the licenses issued to immigrant drivers were set to expire after the time they were legally allowed to remain in the U.S.

In the event of such clerical errors by the DMV, the suit alleges, California law requires the DMV to change the expiration of its own accord or to allow applicants to reapply for a corrected license.

“The state of California must help these 20,000 drivers because, at the end of the day, the clerical errors threatening their livelihoods are of the CA-DMV’s own making,” said Munmeeth Kaur, legal director of the Sikh Coalition, a group fighting for the civil rights of Sikhs.

The Sikh Coalition and Asian Law Caucus filed the class-action lawsuit on behalf of five commercial driver’s license holders, challenging the DMV’s decision to revoke licenses.

Since November, the number of cancellation notifications has grown to more than 20,000.

“If the court does not issue a stay, we will see a devastating wave of unemployment that harms individual families, as well as the destabilization of supply chains on which we all rely,” said Kaur.

The Sikh Coalition also noted that the action was taken under pressure from the federal government. It said the California DMV has failed to provide recourse, and informed applicants that it’s not issuing or renewing non-resident commercial driver’s licenses.

Punjabi Sikh truckers have emerged as a pillar of the American trucking industry. For years, many have sought asylum in the U.S. and entered the transportation industry.

There are around 750,000 Punjabi Sikhs in the United States. Of those, about 150,000 work in the trucking industry, with the majority based on the West Coast.

The issue of immigrant truckers became a political flash point earlier this year, when a Punjabi Sikh driver took an illegal U-turn at a turnpike that caused a crash in Florida that killed three people. The Trump administration swung into action and found seven states, including California, Washington and Texas, that had lax licensing rules.

The crackdown has caused a wave of racism and racial profiling of Sikh truckers, many of whom sport turbans and beards as symbols of their faith, which is neither Hindu nor Muslim.

Secretary of Transportation Sean Duffy singled out California for issuing commercial driver’s licenses to what his department says are unqualified immigrant truckers that put lives on the road in danger. Many truckers quit the industry after the introduction of enhanced English proficiency tests, where highway inspectors check for language proficiency and highway traffic sign competency.

Policy changes regarding noncitizen commercial licenses and English-language proficiency enforcement could remove more than 400,000 commercial drivers from the market over the next three years, according to J.B. Hunt, one of the largest trucking companies.

The federal government’s monthly releases of economic statistics — especially the inflation rate and growth as tracked by gross domestic product — have long occasioned partisan preening (or denunciation) and for a general public stock-taking of the health of the economy.

Not this month. This time, they’re the occasion for doubt and confusion.

On Dec. 18, the Bureau of Labor Statistics reported that inflation had fallen to an annual rate of 2.7% in November, down from 3% in September and well below the 3.1% consensus of economists. And on Tuesday, the Bureau of Economic Analysis reported that real gross domestic product had shot up by a surprising 4.3% annual rate in the third quarter of 2025 ended Sept. 30.

Unsurprisingly, the Trump administration and its Republican acolytes seized on the figures to boast about Trump’s economic policies. White House economic advisor Kevin Hassett proclaimed the inflation figure to be “an absolute blockbuster report.” He described the GDP figure as “a great Christmas present for the American people.”

“America is winning again,” crowed House Speaker Mike Johnson (R-La.) after the GDP report. He called it “the direct result of congressional Republicans and President Trump delivering policies that drive growth and expand opportunity for American families and workers.”

Um, not so fast.

The economists whose jobs involve scrutinizing those statistics to glean what they really mean don’t view them as unalloyed support for Trumponomics. Quite the contrary. Many see them as artifacts of the long government shutdown, which halted the collection of data that go into those reports, severely distorting the results. Furthermore, they expect the flaws in those reports to persist well into 2026, undermining their usefulness as true economic indicators.

“You’ve got to take it with a grain of salt,” said Diane Swonk, chief economist at KPMG US, of the inflation report. “It’s confusing and it doesn’t quite square with prices that we’ve observed.”

A close examination of the GDP figures also underscores the narrow basis driving economic growth in recent months — it’s essentially the product of robust spending by wealthy consumers and massive corporate investments in AI technology. For middle- and lower-income Americans, the economic present and future don’t look anywhere as sunny as the numbers would suggest.

“The numbers give you meaningful information about the system, but not about how people experience their actual lives,” says financial analyst and economic commentator Zachary Karabell, whose 2014 book “The Leading Indicators” injected some perspective on how we interpret economic statistics and explained why our faith in them is often misplaced.

Indeed, consumer confidence has been sinking for months, according to the Conference Board. That points to an enduring question about the U.S. economy: Whose economy is it?

More than ever, it belongs to the rich, producing a “K-shaped” economy, which has been playing out in shopping patterns this holiday season, as my colleague Caroline Petrow-Cohen recently wrote.

According to Bank of America analysts, since this spring, spending by the highest-earning third of Americans has been soaring, while that of middle- and lower-income households has stagnated. In part that’s because the stock market has remained vibrant.

Since the top 20% of households as measured by income own about 87% of directly-held equities, stock market gains “tend to disproportionately benefit the higher-income cohort,” the BofA analysts noted. By contrast, “almost 30% of lower-income households appear to be living ‘paycheck to paycheck.’”

The highest-earning 10% of households now account for nearly half of all consumer spending, according to Moody’s Analytics. That’s the highest level since the data began to be collected in the 1980s, when the rich accounted for only about one-third of spending.

Job growth may already have turned negative, even if the published employment figures don’t yet show it, Federal Reserve Chairman Jerome Powell acknowledged during a Dec. 10 news conference following the Fed’s decision to lower interest rates by 0.25 percentage points.

Non-farm payroll gains have averaged about 40,000 a month since April, Powell observed. “We think there’s an overstatement in these numbers by about 60,000,” he said. “So that would be negative 20,000 per month.”

The divergence between the gross economic statistics and the lived experience of Americans is nothing new. It was remarked on by Robert F. Kennedy Sr. in a speech in March 1968, less than three months before his nascent presidential campaign was ended by an assassin’s bullet.

“Gross national product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage,” he observed. “It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. … Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. … It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile.”

That brings us to the specific flaws in the latest statistics.

The government shutdown, which lasted 43 days from Oct. 1 to Nov. 12, was the most important cause of gaps in the collected data for the consumer price index calculation. As Swonk noted in a social media post, cutbacks at the BLS had already reduced the staff assigned to sampling prices by 25%. That prompted the agency to substitute “imputed” numbers for hard data.

“Those cases can show up as zeros in the percent change of the release,” Swonk wrote — obviously lowering the bottom-line figure. A sampling scheduled for mid-October had to be canceled, so figures dating from August were used instead — concealing any price increases in subsequent months.

A major problem concerns housing costs, which account for about one-third of the data inputs for the CPI. Because the BLS was unable to collect rental data for October, it implied that the monthly change in rents was 0% in October — further skewing the reported CPI lower. Experts say it will take at least six months to use newly collected data to provide a reliable estimate of housing inflation.

The delay in sampling, Swonk adds, means that some seasonal price phenomena were missed. She points specifically to airfares — the originally scheduled sampling would have incorporated a pre-Thanksgiving run-up in fares, but by the time the data were collected fares had returned to a non-holiday level.

Inflation data also are incorporated into GDP estimates — the lower the inflation rate, Swonk notes, the better the GDP looks. An artificially reduced inflation rate will translate into higher reported GDP growth.

All this might have a limited economic impact — corporations, banks and academic economists generally have sources other than the government to reach their conclusions — if not for the partisan political exploitation of the numbers.

As Karabell reported in his 2014 book, Simon Kuznets, the government statistician who helped to codify the collection of government figures in the 1930s, was concerned about how politics would give the statistics a misleading social significance.

“These numbers have turned into absolute markets of the human condition,” Karabell wrote, “when they are simply statistical descriptions of specific systems.”

Economists have warned that some economic factors haven’t yet fully played out. That includes Trump’s tariffs, which in their execution have been lower than they appeared on the surface, and higher healthcare premiums, which have been forecast or announced but won’t actually become effective until 2026.

If the job market continues to weaken, that will show up more vividly in 2026. The interplay between “a surging economy and a soft labor market,” argues Joseph Brusuelas, chief economist at the business consulting firm RSM, “is likely to be the major economic narrative next year.”