Apartment Permits at 9-Year Peak
The number of permits issued for apartment construction climbed to its highest level in at least nine years in Los Angeles County during the first quarter of this year, but the rate of construction still falls far short of the county’s apartment-building heyday of the 1970s and ‘80s.
Permits were issued for 3,829 multifamily units in the county during the first three months of the year, according to the Burbank-based Construction Industry Research Board. The first-quarter total was up from 2,518 in the first quarter of 2000 and just 1,253 in the first quarter of 1999.
Apartment construction has risen steadily in Los Angeles County--with ups and downs in Orange County--since the early 1990s.
The number of multifamily housing permits climbed to 8,542 in Los Angeles County last year, up from 6,525 in 1999, while in Orange County the total rose to 5,615 from 4,662. Most of the multifamily permits are for apartments and only a few represent condominiums, said Ben Bartolotto of the Construction Industry Research Board.
Apartment construction peaked in Los Angeles County in 1986, when 52,969 multifamily housing permits were issued, CIRB figures show, although Bartolotto noted that figures in those years included a substantial number of condominiums. The peak years for Orange County were 1969 with nearly 20,000 multifamily permits and 1986-87, with more than 15,000 multifamily permits each year.
Construction of apartments in Southern California hit bottom in 1993, when only 2,884 multifamily building permits were issued in Los Angeles County and just 1,903 in Orange County.
Despite increased building of apartments in recent years, construction remains “woefully inadequate” to meet the demand for housing, especially affordable housing, according to a recent report by Marcus & Millichap real estate investment brokerage. The report cited an “increasing tenant pool” created by the region’s growing population and continuous job growth.
Most of what is being built in Southern California is designed for the luxury market, and few apartments are aimed at the low- and moderate-income segments of the population. Builders say affordable apartments are not profitable to build, except for subsidized projects, because of high costs for land and construction.
