Deficit in new home construction
City News Service | 11/30/2017, midnight
The supply of new housing in Los Angeles County has not kept pace with population and job growth, a problem that is common among most major municipalities, according to a report released this week by the RentHop web platform.
The housing search engine took a look at building permits, population and rent growth between 2010 and 2016 for the top 30 counties in the country, and defined the level of “housing tightness”' in a county as the ratio of population growth to building permits (pop/permit).
According to the report, Los Angeles County has a pop-permit ratio of 3.3, which is 14th highest, with Sacramento having the highest ratio at 7.4. Only three counties had a negative ratio, illustrating that the problem of slow construction is a nationwide trend.
“It is no secret that population growth has a huge impact on housing, and when supply does not meet demand, the housing prices go up,'' the report says. "Across the top 30 counties in the U.S., the number of population has been on the rise (except for Wayne County, Detroit), and yet housing supply is not meeting the growth.''
The site also took a "deep dive'' look at the city of Los Angeles, which it said had one of the "cleanest building permit data'' of any city, and found that most of the residential inventory built since 2013 was in the downtown area.
“While this building of new luxury inventory might not be affordable to most people in the area, it does put level of downwards pressure on nearby older buildings,” the report says.