In December 2016, the City of Los Angeles continued to tackle one of the biggest headaches for homeowners in older neighborhoods: Mansionization, the practice of tearing down smaller houses, and replacing them with outsized residences. In a 12-0 vote, the council approved an update to the city's Baseline Mansionization Ordinance, applying to single-family homes on lots that are less than 7,500 square feet. Such properties are currently allowed to have floor areas that are 50 percent of the lot size, but under the amendment, floor areas cannot exceed 40 percent.

What impact do you expect this new ordinance to have on the value of existing homes and vacant land value? (You must discuss several effects in addition to the net impact).