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How Much Does Los Angeles Have to Build to Get Out of Its Housing Crisis?

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California is a beautiful and desirable place to live, but it's also one of the hardest places to afford to live. Los Angeles is particularly brutal: it's got the biggest disconnect between incomes and rents of anywhere in the nation, and it's the place to be if you're looking to have your dreams of homeownership crushed. Is there any hope? A new report out from the Legislative Analyst's Office shows that the groundwork for LA's housing shortage was laid a long time ago, and it's going to be hard work undoing it.

In order to keep housing prices in check, California overall would have had to build more (70,000 to 110,000 additional units each year), build denser, and build especially in the coastal areas (including Los Angeles) and central cities (as opposed to building mostly inland and in areas way outside of cities as has been done in the past). California also should have been doing this for decades already. Because it didn't, "the state probably would have to build as many as 100,000 additional units annually—almost exclusively in its coastal communities—to seriously mitigate its problems with housing affordability." And that's in addition to the 100,000 to 140,000 units that the Golden State is already planning to build.

If the state had done all that, California's housing prices still would have continued to grow and would still be higher than the rest of the country's now, but the disparity between them would have been less gaping. If California had done all that, the report says, the 2010 state median housing price would have been a solid 80 percent higher than the US median, instead of 200 percent higher, which is what actually happened.

While Los Angeles County built the most out of any California county in the years between 1980 and 2010, it was waaaay less than it needed to keep housing prices from getting ridiculous. For comparison, in the same 30-year period, "the number of housing units in the typical U.S. metro grew by 54 percent, compared with 32 percent for the state's coastal metros. Home building was even slower in Los Angeles and San Francisco, where the housing stock grew by only around 20 percent."

Okay, so California's not building like the rest of the country, but maybe that's just our thing, like surfing or juice cleansing. Maybe it's too chill to build. FALSE. The report says that during another 30-year period, from 1940 to 1970, "the number of housing units in California's coastal metros grew by 200 percent."

So, why isn't the state building like we used to? One familiar reason is NIMBYs. The report notes that, while it is important that local residents have input on new housing, their resistance to new development is "heightened" especially in coastal California, and it's slowing down the ability of developers to build more housing to alleviate the stress on the limited housing supply. CIM Group's Sunset/Gordon project, which took out the Old Spaghetti Factory, is used as an example of a project challenged by the community. (The project was not explicitly named, but the timeline and details are exact matches.) As the result of a lawsuit, that project had its permits revoked after it was finished and tenants had already moved in. It's unclear what will happen to it.

New housing projects are also slowed by the length of time it takes for approvals. The average coastal California metro takes seven months to approve a project; in LA, it takes about eight months. The average for major US metros was just four and a half months. The longer it takes for a project to get built, the more expensive the project becomes. Adding to that time is the review mandated under the California Environmental Quality Act, which offers "opportunities" for those who oppose a project to really drag things out.

Unfortunately, the LAO doesn't foresee a drop-off in resistance to growth in coastal communities, nor do they really see major policy shifts on the horizon. And since "increasing competition for limited housing is the primary driver of housing cost growth in coastal California," they predict that exorbitantly expensive housing in coastal communities and the state will probably continue growing at the same scary rate in the future. However, the recommendation of the report was pretty simple: "to contain rising housing costs, California would have to build significant[ly] more housing, especially in coastal urban areas." Doing this, and on the scale the state needs it, will be "extremely difficult," the report acknowledges, but it's basically the only thing that's going to make a dent in the housing crisis.


· California's High Housing Costs: Causes and Consequences [LAO]
· LA Is the Least Affordable Big City in the US For Buying a Home [Curbed LA]
· Los Angeles Has the Biggest Disconnect in the US Between Wages and Rents [Curbed LA]