The increased failure to repay comes on the back of gloomy economic sentiment in the US, where a closely watched measure of consumers’ confidence last week fell to its second-lowest level on record. US President Donald Trump’s trade war has driven expectations of higher inflation

“If the tariffs are fully implemented, the US will need to sell its future debt… at lower prices and higher yields,” Smetters said. “More tax cuts, instead of helping offset some of the negative effects of tariffs, will add to the debt at a time when it will become more costly to do so.”

L.A.’s quest to reinvent itself holds national implications. Savvy urban planners and policy makers are watching to see how Los Angeles addresses the issues that are intensifying in many of their own cities. They know that a congested, unaffordable future awaits if they don’t intervene.

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Jonathan Nachmani, a managing director with Madison Capital, a commercial real estate investment and finance firm, said hundreds of billions in office building loans were coming due in the next two years. He said banks hadn't been selling loans en masse because they didn't want to take losses and there wasn't enough interest from big investors.

"It's because nobody wants to touch office," said Mr. Nachmani, who oversees acquisitions for the firm.

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Michael Hamilton, one of the heads of the real estate practice at O'Melveny & Myers, said he had been involved with a number of deals in which banks were quietly giving borrowers a year to find a buyer for a property -- even if it meant a building was sold at a substantial discount. He said that the banks were interested in avoiding a foreclosure and that borrowers benefited by getting to walk away from a mortgage without owing anything.

"What I have been seeing is the cockroaches are starting to come out," said Mr. Hamilton. "The general public does not have a sense of the severity of the problem."''

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The state government isn't exactly ignoring the rising water. Governor Ron DeSantis and his administration have attempted to address the havoc caused by the changing climate with his $1.8 billion Resilient Florida Program, an initiative to help communities adapt to sea-level rise and more intense flooding. But the governor has also signed a bill into law that would make the term climate change largely verboten in state statutes. That same bill effectively boosted the use of methane, a powerful greenhouse gas, in Florida by reducing regulations on gas pipelines and increasing protections on gas stoves. In a post on X the day he signed the bill, DeSantis called this "restoring sanity in our approach to energy and rejecting the agenda of the radical green zealots."

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"The types of [cooling] systems that we sold 10 years ago are not able to keep up with the weather we have," said Simi Hoque, an architectural engineer at Drexel University who studies how building design contributes to indoor heat.

As temperatures climb, air conditioners -- which work by sucking in indoor air, heating it via compressor and then dumping that heat outside -- must work exponentially harder. According to Texas A&M climate scientist Andrew Dessler, keeping a home steady at 75F requires about 30% more power when outside temperatures creep from 95F to 98F.