Los Angeles Housing Development Update, 4Q 2016

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Welcome to the second installment of Abundant Housing LA’s new Quarterly Development Update™!

This is where we dig into public City of Los Angeles data to figure out what’s really going on in our housing market. How much housing are we permitting? How many of our new homes are single-family, large apartments/condos, or “missing middle” housing? And how are we doing on Mayor Garcetti’s goal of building 100,000 new homes in 8 years?

This time we’re looking at numbers through December 31st, 2016, the latest full quarter for which data is available. First up is a snapshot of overall permitting activity through the end of last year.


Permitting for new units climbed each year from 2013 to 2015, but dipped a bit in 2016. That’s really unfortunate, given our crushing housing shortage. The good news is that we permitted more small and midsize multifamily homes (2-t0-4 units, 5-to-19, and 20-to-49), which often include fewer amenities and have better odds of filtering down to become more affordable over time. The bad news is that we built more single-family homes—many of them likely mansionizations—and we lost quite a bit of production from larger, 50+ unit buildings compared to the prior year.

Below is a table showing the chart’s underlying data.


Next we break down what those 50+ unit buildings actually look like. Are they mostly apartments and condos with less than 100 homes, larger structures with 200+ units, or somewhere in between?

Similar to the earlier data, it looks like buildings on the smaller end of the spectrum (within this subset) saw some of the most significant growth: The number of homes permitted in 50-to-99 unit buildings grew from 8.8 to 13.5 percent of the total; meanwhile, housing permits fell for projects with 100-to-199 units and those with 200+ units.

Last, we take a look at progress on the mayor’s 100,000 unit goal.


Things are looking good at 42 months into the 8-year horizon, with permits running somewhat ahead of the benchmark.

As we mentioned in our first development update, though, permits are not the same as completed units: It’s possible that some of the units permitted during this period will be delayed, and plans may be scrapped for some projects, leaving permitted homes indefinitely unbuilt. But it’s better to be ahead of the curve than behind it.

Then there’s the question of whether 100,000 units (12,500 per year) is even an adequate goal. We at Abundant Housing contend that it is not. Our plummeting rental vacancy rate, skyrocketing prices, overcrowding, and worsening homelessness crisis are all evidence that we’re failing to meet the demand for homes in Los Angeles. And given that most household formation in our city is coming from native-born children growing up and moving into their own homes, we can’t blame this on outsiders. It’s our problem to solve.

So what should our goal be? Mayoral candidate Mitchell Schwartz had an extremely aggressive plan—350,000 new homes over a 10-year period, with 500,000 more rehabbed or preserved over 15 years—that we wish had received more coverage during the campaign season. If the imminent threat of Measure S hadn’t been demanding everyone’s attention over the past 6 months (including our own), it very well may have received the attention it deserved. Schwartz’s plan was for 35,000 new homes per year, more than double the 16,700 units that were permitted in 2015. Is this a realistic goal? Maybe, maybe not. It’s more than we’ve built in any decade in LA’s history, but it’s also closer to the historical average than the housing numbers we’ve seen since 1990.

Either way, it’s a conversation we should be having: If 12,500 homes per year isn’t enough (it isn’t), what is? If 35,000/year became our new goal, what city rules and processes would need to change in order to achieve it? What would our city look like ten years hence? And how could we plan for those new homes in a way that protected renters and promoted greater access, health, safety, and opportunity for all of LA’s residents? With our community plans set to be updated on a regular six-year cycle, we’ll be pushing the city to ask (and answer) exactly these types of questions. We hope you’ll join us!

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