By Andrew Keatts, Emily Harris and Christine Clarridge / Axios San Diego / Aug. 22, 2023
New apartment construction is plunging in the West Coast’s biggest metro areas after officials spent years trying to combat soaring rents.
Why it matters: West Coast metro areas are already grappling with a housing shortage that’s driving an affordability crisis, and experts say the apartment construction slump will make things worse.
“If you think the housing crisis is bad now, just wait a few more years,” said Muhammad Alameldin, policy associate with the Terner Center for Housing Innovation at UC Berkeley, who studies housing construction costs.
Driving the news: High interest rates and the rising costs of labor and materials are forcing developers to pull back on apartment projects throughout the West Coast, according to new data on construction starts from CoStar Group, a real estate information company.
Developers are on pace to start building fewer than 20,000 apartments combined this year in Los Angeles, San Francisco, San Diego, San Jose, Seattle, and Portland — less than a quarter of what those locations together produced a year earlier.
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Sadly many will have to face and accept their doom head on.
Construction companies build to make a profit. Owners rent to make a profit. Sometimes it’s frugal to sit on land than develop it. Reading this is ad nauseam.
West Coast metro areas are already grappling with a housing shortage that’s driving an affordability crisis.
This is a irresponsible statement. You will never build you way to an affordable rent in a free market. The state is declining in population. How is there a shortage?
STRO (vacation rentals)
https://www.niceneighbors.org/map
That’s what I’ve always asked people who actually refer to themselves as YIMBY and it’s why I question their claim of “Economics 101”. The state IS declining in population as you said and truth is rents don’t go down simply because because of high vacancy.
I read an interesting article a few days ago that appeared in the LA Times. The article looked at the relative levels of poverty in LA and Detroit and, no surprise, Detroit has far higher levels of poverty than LA but, curiously, much lower lower homeless population.
One reason that there was not more homelessness in Detroit was that there was a large number of extremely low cost but largely decrepit housing – housing provided by landlords that would likely be slammed as slumlords if they tried to rent equivalent housing in San Diego or elsewhere in California.
Some of the housing described was incredibly substandard, but affordable.
This is the result of “trickle down” on steroids. Peoples’ level of income reduces them to living in sadly deficient and probably unsafe housing – housing you and I would not live in if we had any choice. These folks get housing that no one else will live in, as they have no other choice.
You may remember the name Greg Colburn. He has written books and articles that have concluded that the homeless problem is a function of there not being enough housing. Commenters on this site and (and YIMBYS!) have cited his books and findings as supporting the Mayor’s goal of building more housing anywhere and everywhere as the solution to the homeless problem.
He was quoted in the article as saying something different was happening in Detroit. It’s the old infrastructure, some of it crumbling, that has given more people access to a roof. “One path to having low rates of homelessness is industrial decline,” he is quoted as saying.
So, we have our solution. We continue to let our urban infrastructure continue on its already terrible decline, and let the housing stock go, as well, letting the housing we have trickle down to the point where the homeless can afford it.
Or, maybe, we can have sensible planning solutions that provide more affordable housing in places where it can be built without ruining existing communities, not three story, ten unit apartment buildings on every single family zoned lot.