Los Angeles Teaches us that No Affordable Housing Requirement Produces Less Housebuilding

Why does LA build so few homes?  Per capita Seattle builds three times as many homes and only declining Rustbelt cities of the top 25 US metro areas build fewer per capita.

It is easy to get preconceptions about LA, sprawl, low density, auto dominated etc.  Metro LA has a suburban  population density higher than Metro Paris and rather than long commutes has a 30 minute mean commute  the same as Washington and San Francico.

Part of the reason is LA is heravily constrained by mountains and the sea, part of the reason why commutes arnt that long and why high expressway capacity hasnt resulted in excessive induced traffic as it doesn’t suck in far out commuters (there are mountains, the sea and state parks where they would be).

LA also has a higher proportion of renters than any other US city (52%) and a highly segregated housing market by class and race.  Yet there is no inclusionary zoning (affordable housing) requirement.  Excessive planning requirements is not the full answer why LA builds so few homes and here lies a lesson.

LA effectively has two housing markets because of the lack of affordable housing requirements, for the very rich and the very poor.  There is little interaction between them.  Increasing supply for the very rich doesn’t lead to lower prices inducing home ownership amongst the middle classes.  Hence they don’t take out mortgages and there is no credit driven market incentive to build higher density smaller affordable units

 

4 thoughts on “Los Angeles Teaches us that No Affordable Housing Requirement Produces Less Housebuilding

  1. Well yes thinking about it it is on the upper end often scale of overly complex and out of date zoning codes but there are many others in the top 25 metros with similar, even New York can hardly be considered an exemplar of good practice,

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