Los Angeles Home Construction Falls by 5.3%

November 17, 2023 — The Real Deal

According to a recent analysis, the City of Los Angeles issued 11,437 homebuilding permits from January through September—marking a 5.3% decline year-over-year, or 640 fewer permits, compared to the same period in 2022 The Real Deal.

To match the 15,621 permits issued in all of 2022, the city would have needed to issue an additional 4,184 permits before the end of the year The Real Deal.

Analysts at Hilgard Economics (then Hilgard Analytics) pointed to multiple contributing factors:

• Rising interest rates slowing development financing;

• A cooling job market reducing demand;

• Ongoing labor disputes creating uncertainty for developers Wikipedia+3The Real Deal+3Wikipedia+3.

Despite the slowdown, there’s cautious optimism:

“While interest rates are likely to remain fairly high for a while, the other factors… are likely to go away or be mitigated, likely leading to a resurgence in residential permitting numbers,” the report states The Real Deal.

District-level highlights include:

• District 1 (Chinatown, Westlake, NE L.A.): 1,049 permits (up from 845);

• District 8 (Baldwin Hills, Crenshaw): 2,622 permits (up from 422);

• District 10 (Koreatown, Mid‑City): 1,712 (up from 1,361);

• District 13 (Hollywood, Echo Park): 1,676 (up from 1,537) The Real Deal.

Historic context:

• LA issued 17,648 permits in 2015 (a peak year), and just 4,471 in 2010 amid the Great Recession The Real Deal.

• In per‑capita terms, Greater L.A. ranked 39th out of the 50 largest U.S. metro areas, issuing 2.5 new units per 1,000 residents The Real Deal.