New multifamily and mixed-use housing projects from downtown Los Angeles to Santa Monica are literally going up, National Real Estate Investor said.
Los Angeles housing market remains hot with the continuous high demand for housing and historically high rents and prices of condos and lofts. However, there is already a scarcity of land in popular urban areas in downtown L.A. which leads to a boom in vertical residential development. Fortunately, both domestic and foreign developers are up in this vertical trend.
According to the DTLA Business Improvement District's market report for the second quarter of 2015, there are 67 residential projects currently under construction or planned in DTLA, 21 of which are 10 stories or more.
The 50-story construction at 820 S. Olive Street by Onni Group, a Canada-based developer, is the tallest ongoing residential project so far. But a 54-story condominium tower is set to be part of a $1 billion mixed-used project in Metropolis, South Park district by Chinese developer Greenland USA, along with 38- and 40-story towers.
Vertical development is also seen in Beverly Hills, Century City, Woodland Hills and the Mid-Cities district, as well as the San Fernando Valley area. Local developer Rick Caruso is building a super-lux, 19-story residential tower in Beverly Hills, while UDR has an 18-story high-rise building in the Koreatown section in the Mid-City.
California is expected to see market rate and for sale multifamily housing development continue in the near future as real estate investors pour more capital into the region. In addition, multifamily rental homes demand is also increasing which means new constructions are needed to increase supply and keep them affordable.
This market boom and the housing affordability, however, is threatened by rising cost of land which is now at $400 to $600 per square foot in popular residential markets, according to real estate valuation and consulting firm Integra Realty Resources. Construction costs are also increasing at a greater rate, driven by high demand for construction providers.
