Deliveries are on pace to greatly exceed totals for the last two years
Developers in Los Angeles County are on pace to build more units of housing in the second half of this year than in either of the last two years, but a slowdown could be on the horizon.
A report from Marcus & Millichap found that developers are on pace to deliver 9,400 units in the second half of the year, according to Curbed. Much of that development is concentrated in core L.A. metro area submarkets.
Downtown L.A. is expected to see 1,700 new units in the second half and Hollywood around 1,600. Santa Monica/Marina Del Rey, the San Fernando Valley and Mid-Wilshire will also each see over 1,000 units delivered.
There were around 28,000 units under construction in L.A. County at the end of June, most on pace for 2021 delivery.
That’s good news for L.A., which is desperately short of units affordable for average- and low-earning Angelenos. L.A. County is short around half a million units affordable to people making less than 80 percent of area median income, which around $73,100. More deliveries could help temper rents by increasing supply.
Deliveries may not continue to increase, though. The number of units permitted, an indicator of future deliveries, is on pace to fall this year.
U.S. Census data shows that in the first half of the year, metro area developers received permits to build around 13,000 new units. If that pace continues, about 12 percent fewer units will be permitted this year than last year.
The drop in permits could be a symptom of rising costs of building materials and labor, which have slowed construction over the last few years. [Curbed] — Dennis Lynch