Strengthening Recovery Has Downtown LA Booming Again
Ryan Vaillancourt explores the coming wave of development in downtown LA's residential market as ten new buildings and nearly 2,400 units are slated to start construction by next year. With a tight rental market, developers such as "Historic Core apartment king" Barry Shy are itching to move forward with plans that were shelved over the past five years.
"'The rental market, it's amazing,' said Shy, who already owns some 1,200 apartments in five Downtown buildings. 'I have no vacancy and the rent keeps going up.'"
"He is far from alone," says Vaillancourt. "A chorus of experienced Downtown developers are all responding to current market conditions: Central City apartment occupancy is at an all-time high, with some area landlords reporting that their buildings are about 98% full."
With 28,861 housing units reportedly located in downtown at the start of 2012, many don't think the projected growth over the next few years (8%) will do much to alleviate soaring prices.
"[Tom] Gilmore, one of the first modern era developers to build housing in the Downtown core, said the units forecast to come online in the next few years represent a drop in the ocean, chiefly because the area remains home to some 500,000 jobs. The residential population is estimated to be around 50,000," notes Vaillancourt.
"You have to always go back to the fundamental math of how many jobs are there versus how much housing, and the ratio is still way out of whack," Gilmore said. "We could probably use 200,000 more units of housing."