clock menu more-arrow no yes

Filed under:

Building permits for housing in the LA area dropped 6 percent last year

New, 2 comments

Is it a one-time dip or a downward trend?

A photo of Downtown’s South Park neighborhood, with under-construction buildings in the foreground. Sterling Davis/Curbed LA flickr pool

Downtown’s construction boom might hint otherwise, but the number of building permits issued for new housing in the Los Angeles metro area plunged last year, reports KPCC.

Permits were issued for the construction of 32,008 units in 2016, down 6 percent from 34,034 the year prior, according to KPCC. It looked at U.S. Census Bureau data for the LA metro area, which includes Anaheim and Long Beach.

The drop might seem small, but it’s notable. It’s the first such decrease in housing construction permits in six years.

What remains to be seen is whether this is the beginning of a nasty trend or just a “cyclical pause,” says KPCC.

Los Angeles is already far behind its historical production numbers, and it’s not keeping pace with population growth. The slowdown in housing construction over the past few decades has lead to a troubling housing shortage.

Developer Paul Habibi, who is also a real estate lecturer at UCLA's Anderson Graduate School of Management, told KPCC that the dip in housing construction could be the result of a few factors, including banks reducing their lending to projects, Measure JJJ, and a lack of available land.

Building on vacant land is a step in the right direction toward stemming the housing crunch. A report released last year from the state’s Legislative Analyst’s Office noted that building new market-rate housing really only helps reduce pressure on all renters if it doesn’t replace existing affordable housing.