By Ramsey Judah
Everyone who comes to visit California always wants to live in California. In Los Angeles, it is starting to cause a housing crisis as rents skyrocket and open land to build becomes scarce and terribly expensive.
Such situations are common in a state as beautiful as ours. Whether you are in the north or the south, you cannot help but to marvel at our gorgeous hills, mountains, 1,000 mile coastline and endless places to eat and visit. But it is starting to take its toll.
Cities as huge and widespread as greater Los Angeles are now at a crossroads as to what they can do with regard to the growing housing crisis that is getting more expensive every year. There are currently two camps that have opinions on the matter.
Camp One: Build More Housing
This camp is calling for Los Angeles to make the ability of obtaining permits and zoning changes easier in order to build more. Not just build more, but build higher.
Los Angeles is a city of mostly single family homes that takes up almost every crevice it can give. If there’s not much more space to build out then the only alternative is to build up by tearing down the single family homes and creating multi-family structures with up to 4 units.
The theory then would be with more supply in the market, it would help meet the demand and freeze rental prices and possibly even bring them down.
But the objection to this plan is affordability. Los Angeles is not cheap to build in. Any buildings that are built are going to be looking to be build up their cap rates in order to make it desirable to sell later on. This means the rent will be expensive to start in order to accomplish such feats.
This means that the new supply would not be affordable for your average renter only adding to the problem of costly living situations.
Camp Two: Stop Building Because We Are Too Overcrowded
This camp is tired of the traffic getting worse every year and how overcrowded the city is. They figure that it would be best to just let the chips fall where they may and then it will balance out in the end. New housing will only add to the overpopulation problem that Los Angeles has.
The theory here would be to let prices skyrocket causing the demand to stop flowing in, which would eventually increase supply and balance out housing rents.
Although it is true that causing demand to crash would cause supply to increase and prices to fall, it would not play out the same here because it is unpredictable as to where rent will balance out since the demand is so high.
Also, every huge city around the world has tons of traffic, albeit maybe not as bad as Los Angeles, but more roads and public transportation can be built in order help alleviate it. It would also bar future prospects of business growth in the city which would benefit the city’s economy as a whole.
Therefore, the debate rages on as to how fox the housing crisis. What we really need a happy medium that will guarantee more supply at affordable prices and a solid city plan to build infrastructure for a badly needed metro railway system. Los Angeles needs to be an example of what a modern 21st century city should look like.
Ramsey Judah is a broker with The Judah Group and can be reached at ramsey@TheJudahGroup.com and @RamseyJudah on Twitter and Instagram.