A new study has found that the average finished multifamily project in the City of Los Angeles takes 3.9 years from its first application to completion.
Developers have complained for years about the slowness of approvals, and the study seemed to confirm it.
“The City of Los Angeles is in dire need of more housing,” the study’s authors wrote. “Yet, the city’s housing approval and development process is long and complex, leading to added costs and a high degree of uncertainty among developers. Delays can occur at every step of the process.”
The study, published last week, came from the Los Angeles Business Council Institute (LABCI), an arm of the well-known pro-business policy group whose leadership team includes executives from Rexford Industrial and Trammell Crow Company. The research was conducted by Edward Kung, an economics professor at California State University Northridge, and Stuart Gabriel, director of UCLA’s Ziman Center for Real Estate.
The two authors used public data sets, and analyzed approval times for all multifamily housing projects, including all-affordable projects, that were permitted by the City of L.A. between 2010 and 2022.
Of the nearly 2,700 total projects the city permitted in that time, they found that 1,712, or just under two thirds, had been completed — and that the unfinished projects accounted for nearly 49,000 units that would otherwise be added to the city’s housing stock.
That permitting pace puts L.A. nowhere near on track to reach its housing goals. The total number of units permitted over that 12-year period, around 120,000 homes, comes out to less than a third of the number of units the State of California has determined the city needs to plan for from 2021 through 2029.
The LABCI report also broke down projects’ lag time by approvals time and construction time, analyzing only the projects that have actually been completed.
Those projects spent an average 549 days — just over a year and a half — awaiting entitlements. Once the city granted building permits, the projects then spent an average 863 days, or about two years and four months, in construction.
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“Since larger projects take longer to complete,” the report notes, “the completion time of an average dwelling unit is even longer than for an average project.” The authors came up with an average completion time of nearly five years for the average unit, a year longer than for the average project.
The report also found that all-affordable projects came to fruition somewhat faster, at a total average time of 1,307 days, or about three and a half years. Mixed-income projects, on the other hand, were particularly slow, taking an average 665 days to secure entitlements and another 917 days of construction time, for a total project time of 1,582 days, or about four years and four months.