You used to be able to rent a sweet one-bedroom pad Downtown for $1,400, easy. Now, as any prospective renter knows, those prices have doubled in some areas. Relief is on the way, right? Given all of the units under construction right now, shouldn't that drive rents down? Not so fast, says the Downtown News.
Construction of housing isn't keeping up with demand anywhere in LA, but it's especially visible here. As more people move Downtown (or really, really want to move Downtown), cooler stores and restaurants are opening up, which means more people want to move Downtown, prices rise, and so it goes.
The Downtown Center Business Improvement District says that over 9,000 apartments and condos are in the works now, with 13,500 more units currently proposed, but that's nothing considering LA's in the midst of a huge housing shortage that's causing prices throughout LA to shoot up faster than those in any other US city. Many point the finger for outrageous housing prices at LA's zoning code, which prioritizes single-family homes and limits developers' opportunities to build. Stunted growth has seriously impacted rents throughout LA, but given the intense demand Downtown, has hit noticeably hard here.
One of the main ways most cities deal with spiraling rents is by subsidizing affordable housing. Subsidies are tough in LA, especially after the demise of community redevelopment agencies; LA's CRA had $250 million in a fund for affordable housing, and when the CRA was dissolved, the money was no longer available. LA's own affordable housing coffers haven't been able to make up the difference. Plus, since investment dollars are flowing Downtown, many developers aren't feeling the push to take advantage of the bonuses they could get for including subsidized housing in their projects.
The end result of all of this is that living Downtown is already out of reach for most middle-income residents and will probably stay that way. "As prices continue to rise, if we don't have places that are being built to accommodate lower income residents — and by that I seriously mean, say, $70,000 a year — it's going to become an exclusive community," residential broker Bill Cooper, who runs the firm The Loft Expert, tells the DN.—Leonard Hyman
· The Rising Price of Downtown Living [DN]
· Los Angeles's Big Plan For Pulling Out of Its Housing Crisis [Curbed LA]
· Los Angeles Housing Prices Have Shot Up More Than Any Other US City's Since 2000 [Curbed LA]
· Everything Wrong With Los Angeles Housing, In One Graph [Curbed LA]
· 57 Percent of People Living in Los Angeles Can't Afford to Live in Los Angeles [Curbed LA]