High demand in Los Angeles for residential housing is fueling an influx of both domestic and international real estate developers. They are helping drive L.A.’s hot real estate market to historically high price levels.
The scarcity of land in the most desirable parts of Los Angeles has been the catalyst pushing projects higher, quite literally. Developers are going vertical, like in New York and San Francisco, to make the most financial sense out of new construction projects.
Century City, Beverly Hills, and other nearby cities as well as Downtown Los Angeles are all seeing intense development with builders going wild for high rise and mixed use projects.
This demand is expected to continue for the foreseeable future. According to some housing affordability statistics, Los Angeles is only bringing about a third of the number of units onto the market annually that are necessary to mitigate the housing affordability problem.
A report from the Legislative Analyst’s Office (LAO) shows California will have to build substantially more housing, build denser and build in the desirable urban coastal areas (including Los Angeles) in order to make a dent in fixing the affordability problem.
In its report last year, the Legislative Analyst’s Office noted the great need for more housing. It said that in L.A. County alone, about a million more new homes should have been built since the 1980s in order to keep pace with demand.
One major obstacle to building new residential housing units is the role local residents may play. Their resistance to new development has increased especially in Coastal California and it is slowing down the ability of developers to build more housing to alleviate the stress on limited supply.
According to the Legislative Analyst’s Office, it expects since “increasing competition for limited housing is the primary driver of housing cost growth in coastal California,” expensive housing in coastal communities will likely continue to grow at the same crazy pace going forward.
The report emphasizes that the changes needed to bring about significant increases in housing construction will be difficult and will take many years to come to fruition but that basically this is the only way to effectively tackle the affordability problem.
The growing number of tech-industry and tech-related workers in California has contributed to the increased demand here for housing in the last few years.
Many of these tech companies are concentrated in Downtown L.A., and the L.A. Westside area, nicknamed “Silicon Beach,” (the area encompassing the real estate market from Santa Monica to El Segundo.) Millennial tech professionals, paid way above most other industry sectors, are creating demand for production of residential units equipped with the latest technology and other high end amenities in hip urban neighborhoods.
Also expected to be desirable are locations close to the new public transit lines. A huge mixed use project is planned for Brentwood just a block away from the Expo Line’s Bundy station. This project will replace the Cadillac/GM dealership at Bundy and Olympic with a cluster of low to mid-rise buildings.
The complex will have about 500 residential units (rentals or condos), a 10-story office tower, retail at ground level, restaurant space and a grocery store. The project will also have a 10,000 square foot plaza open to the public including water features, outdoor dining and about 1,500 parking spaces.
Another new mixed use project is planned adjacent to the Expo Line at the La Cienega Station. It is planned to provide 1,200 luxury housing units in a complex that includes a 30 story skyscraper. However, a coalition of local members of the community, have filed a lawsuit against the developers and City of Los Angeles on the basis the skyscraper is “out of character.”
Those fighting the plan say the high rise tower should not have been approved in an area where no building exceeds over four stories. They claim it defies local zoning and height/density limits. They argue for rational city planning that respects neighborhood character and ends land-use abuses.
Recently, an objection was also raised to the proposed height of a new Beverly Hills residential project planned adjacent to the Hilton Hotel as “out of character” with the Beverly Hills community.
Other mixed use projects include plans for a huge retail, office and residential complex for the parking lot next to the Expo Line at the Culver City station at the intersection of Venice, Washington and National Blvd. It will consist of a five-story office building, a six story hotel, and six-story apartment building with 200 units. These three buildings will have shops and restaurants on their first floors. It will also provide more than two acres of open space with a great lawn as a venue for events and programs.
Century City with the planned mixed use at the Century Plaza Hotel when it reopens combining hotel facility, residential units, retail and open air dining terrace along with the more than $800-million renovation and expansion of the Westfield Mall is a large part of the exciting developments on the Westside.
The breadth of the development and construction in progress reflects the strong momentum underway to make huge gains in the creation of more housing, increased affordability and greater ease of access to shopping venues and public transportation .
For a free courtesy consultation, contact Bess Hochman, a top Westside Real Estate Broker for over 20 years. Bess is also distinguished by holding a law degree. This article expresses the opinion of the author. You are advised to consult attorneys & others experts specializing in the issues referenced in this article. Contact Bess: 310.291.4111. E-mail: Bess.CenturyCityNews@yahoo.com.
“Bess is a master negotiator!” says Michael Donaldson, attorney & author of Negotiating For Dummies
