If you’ve traveled south through Downtown Los Angeles over the last decade, you’ve seen them—cranes sprouting into the sky from what feels like every corner. It’s been a decade of massive growth in Los Angeles, and not just Downtown. In Culver City, Hollywood, and the Arts District, new apartment towers, office campuses, and entertainment districts rose and sprawled across the landscape.
At least, that’s the perception. But looks can be deceiving.
Relative to 2008, when the Great Recession put a lot of projects on hold, it might appear as if there’s been a tremendous amount of construction, says Jeff Pion, vice chairman at LA-based commercial restate brokerage CBRE Group.
Dive deeper into LA’s history, however, and you’ll find “we have had more construction than we have now,” he says.
A massive wave of development in a few high-profile neighborhoods, as well as taller, more noticeable multi-family towers and commercial spaces taking the place of older structures, has helped sway the public perception that Los Angeles is in a building boom.
“It’s different enough that people think it must signal some massive explosion of construction,” says Mark Vallianatos, cofounder of Abundant Housing LA. In a handful of neighborhoods that’s true. In Downtown LA alone, 115 new buildings were constructed between 2010 and 2017.
“The conceptual problem is the Great Recession… because in the recession, we lost a lot of jobs and construction ground to a near halt,” says Dowell Myers, director of USC’s Population Dynamics Research Group.
Myers says Angelenos got used to seeing very little construction for a number of years, while the economy struggled out of the mess of the recession, which particularly decimated the ability of construction companies to build.
As the economy recovered, construction ramped up. In the city of Los Angeles, 4,109 building permits for new housing were issued in 2010. Eight years later, that number ballooned to 16,299. Data for LA County tell a similar story, with 7,260 housing permits issued in 2010 compared to 22,009 in 2018.
The growth is remarkable. But compared to other decades, it’s less impressive.
“What we consider to be a boom today is because we got used to nothing,” Vallianatos says. “We’re used to such a low amount of new housing that anything moderate now feels like a lot. And if you look back at history, you see it’s actually kind of like getting back more towards what you might consider normal for decades at a time.”
According to Vallianatos, the first eight years of the 2010s saw an average of 25 housing permits issued in the city of Los Angeles per 1,000 residents. But compare this to the LA building booms of the 1920s, when 402 housing permits were issued for every 1,000 residents, and the 1950s, when there were 138 housing permits per 1,000 residents. In terms of housing, the supposed boom of the past decade has been more of a bust.
For the most defining building boom in the history of Los Angeles, look no further than the free-spending, development-crazy 1920s.
There were many reasons for this housing explosion, which was funded by money from oil, entertainment, and real estate earnings. There was rapid population growth, increased migration, and a strong demand for new housing. Unlike today, however, there was a lot of empty, undeveloped land on which to build.
“It’s less complicated than looking for what we call today infill locations or knocking something down to build something else,” Vallianatos says. “Zoning was in its early days, and so there were many fewer restrictions on what could be done where.”
For much of the 1920s, 60 percent of central Los Angeles was zoned B residential, which allowed any type of home construction.
“The most interesting neighborhoods in Los Angeles today are those that were built back when you could have a single-family house next to a bungalow court, next to a duplex, and there might be a mid-rise apartment on the corner or something,” Vallianatos says. “That’s because we didn’t segregate different types of housing as much as we did in later eras.”
Beloved LA neighborhoods, including Silver Lake, Echo Park, Hollywood, South LA, Koreatown, and Venice, were defined by this time. “The whole 20s, it’s messy and chaotic,” Vallianatos says. “But it did create and lay down much of the landscape people claim to love about contemporary Los Angeles.”
The post-World War II building boom, fueled by such factors as manufacturing, the aerospace industry, and the GI bill, extended from 1946 to the late ’60s. It brought a new kind of housing to an expanding LA, with more master-planning and segregation evident in neighborhoods of the era, including those in West LA, the San Fernando Valley, and planned towns like Lakewood.
“All these interior areas are going to be single-family, and we’ll leave a strip of duplexes, maybe as a buffer, and then a commercial corridor,” Vallianatos says, describing the strategies of planners in that era. “Families deserve a single-family home and should be separated from the more footloose population of apartments. Businesses are dirty and noisy, and so you should keep those away from both apartments and houses.”
New housing construction numbers dropped off during the 1970s and 1980s, before falling to an all-time recorded low of 10 housing permits per 1,000 residents during the regional recession of the 1990s. The number rose to 21 permits per 1,000 in the 2000s. “In terms of numbers of new homes, the 2010s were closest to 2000s but a little higher,” Valianatos says. “The last few years trend higher, pointing back towards 1970s and ’80s levels.”
Shane Phillips, the housing initiative project manager for the UCLA Lewis Center for Regional Policy Studies agrees. “We’re higher than we have been in the past few decades, but lower than we were really at any time prior to 1990,” he says.
The reason for sluggish housing construction over the past decade is multi-faceted. Many experts point to strict local zoning ordinances and restrictions that make many neighborhoods incredibly difficult to build in.
“Some of it’s political resistance, but... it’s hard to get land—all the easy land is built on. So now you have to do more infill, and infill is always slower,” Myers says. You also have climate change and anti-sprawl policies promulgated at the state level to try to make cities grow more compactly. The easy way to grow is on the edge of the city on the greenfield. So there is no resistance, no neighbors to complain. Land is cheap, but by policy, we’ve decided we want to grow more compact.”
This has meant a chronic housing shortage in all of Los Angeles, which has only gotten worse as the decade has progressed. Homeowners are holding onto their increasingly valuable property, renters are staying in rent-controlled buildings longer, and millennials are living with their families instead of setting up their own households.
“You’re trying to find property, there’s just not much of it available. We’re building very few condos, and there’s not a lot on the market at any given time,” Phillips says. “If you’re trying to buy a first home, like a starter home, there’s not many communities in Los Angeles where even a starter home, a small home that’s not in great condition, is still affordable.”
The past decade has also seen an increase in the price of smaller homes in once relatively affordable neighborhoods like Highland Park and traditionally black neighborhoods in South Los Angeles. “A lot of people have moved there in the last few years because it’s the last place where a house is still relatively affordable or attainable for somebody,” says Adrian Scott Fine, the director of advocacy at Los Angeles Conservancy. “That’s quickly, quickly going away. Even in Leimert Park now I couldn’t afford the house that I bought five years ago.”
In Highland Park the median price of a home rose from $352,055 in 2010 to $797,250 in 2019. In Jefferson Park, prices skyrocketed in that time from $272,256 to $772,500.
So what can we learn from LA’s past housing booms? Many agree that more affordable multi-family units must be built in the upcoming decade. According to Myers, 48 percent of construction in California during the 1960s through ’80s was multi-unit housing. During the 1990s and aughts, as baby boomers aged into “executive” age, developers chased their increasing earnings with single-family homes and the number dropped to as low as 21 percent. This percentage has rebounded in the past decade, to a statewide 38 percent, but it’s still not enough.
These numbers are particularly detrimental to renters and give landlords more power. With a vacancy rate of 4 percent, Los Angeles has one of tightest rental markets nationwide. Census data ranks it ninth for lowest vacancy rates among the 75 largest metro areas so far this year.
Vallianatos says Los Angeles needs to loosen its zoning laws to allow for more diverse housing types that would put townhouses next to single-family homes next to apartment complexes next to condo towers. “We can learn from the past if we allow more diverse low-rise housing, including in areas that are currently single-family only. You would draw upon the best of LA’s-built environment legacy along with new things,” he says. “You can have great housing that fits together. It doesn’t need to be so homogenous. And that would be a tribute to the best of the past housing booms.”
But this imagined housing renaissance could be too little, too late. Over the past decade, Los Angeles County has grown from 9.8 million people in 2010 to an estimated 10.3 million in 2019. Despite this increase, the population has shifted in a way that’s foreboding to future housing development.
According to Myers, during the last 20 years, Los Angeles County has seen its number of children under the age of 10 shrink by 21 percent (statewide, there was a 5 percent drop), and immigration has slowed. “Immigrants that are coming, they don’t have kids. Existing Latinos are getting older, and they’re not having kids,” Myers says. “The millennials are growing up. They haven’t had kids yet. They’re looking to have kids—and if they have kids, they can’t find housing space that is affordable, so they’re moving outward.”
Young families have increasingly moved out of LA County to places including neighboring Riverside and Ventura Counties. According to Phillips, many families had to leave because Los Angeles County did not build enough homes. It added 104,000 new homes from 2010 to 2018; in that time, the population grew by 423,284 people.
Angelenos in search of housing have also increasingly bought in less expensive, outlying LA County towns, says Myers, including Palmdale and Lancaster.
Although housing construction remains LA’s biggest Achilles heel, there have been some bright spots in the latter half of the past decade. There is hope that the Statewide Housing Crisis Act of 2019, known as Senate Bill 330, will boost housing development by requiring cities to make decisions on project plans more quickly, though preservationists worry it could destroy the character of historic neighborhoods.
The city has its own affordable housing incentive program known as Transit-Oriented Communities Guidelines, or TOC. While not perfect, the program is also showing promise in the city of Los Angeles, with applications for 17,687 units filed in less than two years. “The TOC program is a major step in the right direction,” Phillips says. “That’s what’s allowed a lot more housing near transit, as long as it includes an affordable component. It’s also reduced the amount of parking that’s required for these projects.” He sees it as helping not only low-income residents but also the “missing middle” or renters looking for affordable but not subsidized mid-sized units.
Whatever the future, the past 10 years of development have been not so much a boom as a slow climb back to the status quo. As Los Angeles enters the 2020s, a century after the beginning of LA’s biggest boom, many are hoping for another case of history repeating itself.
This includes recapturing LA’s legacy of building new, affordable housing for Angelenos of all income brackets. Experts agree that a multi-pronged overhaul of housing policy is essential to the county’s well-being. “We let decades go by where it’s too hard to build a new home,” Vallianatos says. “We have to start focusing more on homes for people, less on homes for cars.”
But this will require a holistic change in how LA approaches housing from a public policy level. “I think it’s really recognizing that stronger tenant protections, more housing overall, and more generous and better targeted subsidies all have to be provided. It can’t just be one or the other of these things,” Phillips says. “If you don’t have the zoning to accommodate more housing, then subsidies will just go into the pockets of landlords, for example, or they will make the cost of construction just that more expensive.”
Myers agrees, but worries that LA voters—a majority of whom are homeowners—will vote in their best interest, keeping housing scarce and property values high. “The baby boomers are the big gorilla. But it’s not our fault. It wasn’t our idea. It was our parent’s idea,” he says. “But here we are. The baby boomers have a right to retire. The people before them, older than us, have a right to retire. And they have a right to stay in their houses. But then, goddammit, you had better add more houses.”