Los Angeles Housing Development Update, 1Q 2018

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Welcome to the latest installment of Abundant Housing LA’s Development Update!

This is where we dig into public City of Los Angeles data every 3 months to figure out what’s really going on in our housing market. How much housing are we permitting and building? How many of our new homes are single-family, large apartment/condo buildings, or “missing middle” housing? And how are we doing on Mayor Garcetti’s goal of building 100,000 new homes in 8 years? Where is the market headed?

In these updates we look at building permits (link above), which are an indicator of imminent construction activity, as well recent openings as measured by Certificates of Occupancy. You can read about our methodology for analyzing the data at the bottom of the post.*

Building Permits

For this post we’re looking at numbers through March 31st, 2018, the latest full quarter for which data is available. First up is a snapshot of overall permitting activity:

Here are the numbers behind the chart:

Next we break down the units per building, looking specifically at what share of total permits are for projects with at least 50 units:

Last for the building permit data, we look at how we’re progressing toward the Mayor’s goal of 100,000 new homes by 2021. Note that the goal’s start date is July 1, 2013, and the end date is June 30, 2021.

Certificates of Occupancy

Building permit data is extremely useful, but it doesn’t exactly correspond to what Abundant Housing really wants: homes for people to live in. For that we need to look at Certificates of Occupancy (CoO), which track actual building openings.

First a disclaimer though: The City controls whether it grants building permits, and how difficult or easy it is to receive those permits, but they don’t actually build the housing. CoO’s are what the developer needs when they finish the building so that tenants can move in, so it’s a measure of what’s actually opening to new residents. And since it takes a few years to construct a building, we’d expect to see a lag of 2-3 years between Building Permit and Certificate of Occupancy for the same project.

We raise these points because we want to make it clear that having fewer CoOs than building permits (which is what we see below) is not a failure on the part of the City. It’s what we’d expect when development activity has been growing, and it’s mostly out of the City’s hands whether building permits lead to real, on-the-ground construction. They almost always do, of course, but it’s not a guarantee.

With that said, here’s the data:

Within this time frame 2015 had the most building permits, so we should expect to see many of those units coming online in 2017 and 2018. That didn’t materialize in 2017, and it remains to be seen whether the pace picks up in 2018.

Next is the data underlying the above chart:

And last, we’ve repurposed our “progress” chart for Certificates of Occupancy rather than building permits, and our progress suddenly doesn’t look so impressive:

As always, we invite members and readers to share their own insights about what they read from the data. Let us know in the comments, and join us on Facebook and our mailing list to keep the conversation—and our advocacy—going strong.

*Methodology note: We are now excluding any building additions or alterations that add less than 5 units, which is a way for us to avoid counting permits that may not actually be adding new units. We also don’t count condo conversion permits, but do count adaptive reuse projects that add 5 units or more. Previous years’ numbers have been updated based on this new methodology so the data is comparable across time.

This change resulted in about 150 fewer single family homes in our calculations in previous years, and approximately 1,000 fewer single family homes in 2017. The jump in 2017 appears to be a result of recent changes to state and City law that permit the construction and conversion of accessory dwelling units. Since most of these ADUs appear to be legalizations of existing structures, we believe it’s fairer to not count these as “new” housing even though it’s great to see these homes being inspected and coming out of the informal housing market.

2 comment on “Los Angeles Housing Development Update, 1Q 2018

  1. Lolita Nurmamade Reply

    We need to build and we need to build quickly. My two boys and I could not get an apartment where we lived for 15 years. Rent increased then we got evicted. It’s a shame . Glendale housing department sat there and watched .

  2. Morris 'Fritz' Friedman Reply

    Why don’t you look into the consequences of the Beverly Fairfax Historic Landmark District now being forced on property owners who don’t want it.
    It runs from the alley north of Beverly to the alley south of Melrose and avoids Fairfax entirely – encompassing a total of some 464 small, mom&pop owned multi-family rent control structures.

    The Los Angeles affordable housing crisis is too severe to take 39 blocks of over-large units that were conceived for a different century and lock them into being inefficient housing for the young professionals who are currently seeking to reside in this area.

    This Landmarking nomination was provoked by one man’s resistance to a novel, small parcel private home development that puts four private homes on a single lot, on Genessee I believe, giving young families affordable entree to home ownership in the heart of an increasingly out of reach city.

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