New apartment construction in Los Angeles has fallen to its lowest level in a decade, underscoring that the LA apartment supply has hit a 10-year low and is likely to keep rents among the nation’s highest. Real estate data firm CoStar reports that fewer than 19,000 rental units were under construction as of September, a 30% drop from three years ago.
Developers cite tougher financing and a more complex regulatory climate since the pandemic as key reasons investors are avoiding the market. Higher material costs tied to tariffs are also adding pressure. Associated Builders and Contractors says steel prices are up 9% from a year ago, while copper wire and cable have risen 14%. Labor shortages have pushed wages higher, too; in California, 61% of construction workers are immigrants, and 26% of them are undocumented.
The longer-term trend is stark. The USC Lusk Center for Real Estate notes that annual housing production in LA County fell from about 70,000 units in the 1950s to under 15,000 in the 2010s. Over the past six years, 152,000 new homes were built, mostly rental apartments, but only 10% were affordable to low-income households.
With new supply shrinking and demand still strong, vacancy remains among the lowest in the country. For now, that points to rents staying near peak levels in Los Angeles. Unless financing and costs ease, the LA apartment supply may remain tight.
BY HOONSIK WOO [woo.hoonsik@koreadaily.com]
