Is Downtown Los Angeles’ residential building boom coming to an end?
Construction starts on new residential units were down to about 500 from June 2017 to June 2018, a significant decline from the more than 2,000 annual projects begun each year since 2013, according to CoStar.
The reasons for the falloff are many.
The city’s Measure JJJ, which voters approved in November 2016, may be among them, according to CoStar. The law requires developers to incorporate affordable units, hire locally and pay prevailing wages at any project that requires a zoning change, according to CoStar. Because zoning changes are often required for large projects, critics of the measure say it will make development unaffordable. And there has been a sharp decline in construction starts since the measure passed.
Developers could also be pulling back amid the storm of development Downtown.
Around 1,600 high-end units came online in the first half of 2017 alone, and another 7,000 units at all levels are expected to come online in the next two years. Still, strong demand drove the vacancy rate Downtown to 10 percent by the end of 2017, or 2.4 percentage points from the beginning of the year. [CoStar] — Dennis Lynch