Los Angeles home construction is on the decline, according to a new report.
The city handed out 11,437 homebuilding permits from January through September, a 5.3 percent decline compared to the same period last year, Urbanize Los Angeles reported, citing a report by Hilgard Analytics.
That means the city issued construction permits for 640 fewer homes during the first three quarters.
To keep pace with the 15,621 housing permits Los Angeles gave last year, the city would have to dispense 4,184 home building permits between now and New Year’s.
The Hilgard report points to impacts to development in Los Angeles, from rising interest rates to a cooling job market to labor disputes that have resulted in a less desirable environment for developers.
While a slowdown in homebuilding may be unwelcome news for a city facing pressure to increase the pace of construction, the current dip may be temporary, according to report author Shoshana Baum, CEO of Hilgard Analytics, based in West Hollywood.
A historically tight housing supply is reason for an eventual comeback, according to the report.
“While interest rates are likely to remain fairly high for a while, the other factors that have been contributing to this decline in permitting are likely to go away or be mitigated, likely leading to a resurgence in residential permitting numbers,” the report states.
Some parts of Los Angeles, however, have seen an uptick in building this year, according to the report.
Council District 1, representing Chinatown, Westlake and northeast Los Angeles, had 1,049 homes permitted in the first three quarters, compared to 845 through the same period last year.
At the same time, Council District 8, representing Baldwin Hills, Crenshaw and Jefferson Park, had 2,622 home permits this year, compared to 422 last year.
Council District 10, representing Koreatown and Mid-City, had 1,712 permits this year, compared to 1,361.
Council District 13, representing Hollywood and Echo Park, had 1,676 permits this year, compared to 1,537.
In recent years, 2015 saw the most housing permits issued in Los Angeles at 17,648 units. In 2010, during the Great Recession, the city handed out 4, 471 permits, according to Hilgard.
Last year, Greater Los Angeles ranked 39th among the nation’s 50 largest metropolitan areas in building permits on a per capita basis, according to a report from Apartment List. Greater L.A. permitted 21,500 new apartments and 11,000 new single-family homes, or 2.5 new units per 1,000 residents.
— Dana Bartholomew
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