The California State Housing Element Law was established in 1969. It requires jurisdictions to do their “fair share” around planning for adequate affordable housing (RHNA). It requires a review of the General Plan and must be updated every 8 years. It recognizes that housing is a critical need and the government and private sector must work together to address it. Very smart, in theory….
The bottom line, if the Los Angeles Planning Dept adhered to the state’s requirements through the decades, they wouldn’t be hundreds of thousands of units in arrears, and playing catchup. The consequence has been a housing supply imbalance and unaffordable housing for a high percentage of the local population.
During a recent meeting with the Planning Department, the combination of using Bonus Density construction for Affordable Housing, Accessory Dwelling Units, and Transit-Oriented Communities will help make up some of the gap in the needed housing stock. But even then the housing permits will be tens of thousands short each year.
The majority of Los Angeles used to be owner occupied. Now over 63% of the population are renters. That changes how the population votes, and how the representatives govern. Some of those actions have a negative effect on development and investment in the region.
The attached charts visually show the housing deficet in relation to the targets.
Unfortunately, development costs in the city are astronomical. $125,000-$150,000 per unit in just permit and tax fees, before land or construction costs, make private sector development very difficult to economically make sense. Instead of lowering the fees, the city is using higher density and low-income housing bonuses to help construction costs pencil out for developers.
If you are in the Los Angeles area, have any questions or real estate sales or financing needs, feel free in contacting me
Ron Henderson GRI, RECS, CIAS
President/Broker
Multi Real Estate Services, Inc.
Gov’t Affairs Chair – California Association of Mortgage Professionals (2017-2018)
Chairman – OutWest Marketing Meeting (Real Estate Education)
BRE #00905793 NMLS #310358
www.mres.com
ronh@mres.com
Specialist in the Art of Real Estate Sales and Finance
Real Estate market, mortgage rates, Los Angeles, San Fernando Valley, Conejo Valley, Simi Valley, Woodland Hills, West Hills, Calabasas, Chatsworth
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