Los Angeles is joining the ranks of other major U.S. cities with vertical residential development like New York, Chicago and San Francisco. From downtown Los Angeles (DTLA) to Santa Monica and everything in between, new multifamily and mixed-use projects are going up—literally. High demand for housing, historically high rents and condo/loft prices are keeping the Los Angeles region’s housing market hot, with both domestic and foreign vertical developers keenly in the game. But scarcity of land in popular urban neighborhoods is driving residential development vertical so projects are financially viable. A total of 67 residential projects with 22,435 units are under construction or planned in DTLA. The majority of projects are at least seven stories, but 21 projects are 10 stories or more, according to the DTLA Business Improvement District’s QTR-2 2015 Market Report. Beverly Hills, Century City, the Mid-Cities district and Woodland Hills are also seeing vertical development.
With investor capital pouring into the region’s real estate market, market rate and for sale multifamily housing development is expected to continue for the foreseeable future. The Los Angeles region is producing about 20,000 units of market rate units annually, but a recent report on housing affordability from the California Legislative Analyst’s Office estimates that 55,000 units are needed annually to keep housing affordability in check.
