The Need For Affordable Housing In LA
Affordable housing is at a premium in LA. Mack Urban founding principal and CEO Paul Keller talked at this year's BMAC West about where LA stands with regard to affordable housing and what the future may hold.
California is home to 12% of the US population, but home to 21% of the nation’s homeless, according to Paul.
LA is "the only major city in the US with no affordable housing strategy," he said.
However, Paul said he thinks both LA Mayor Eric Garcetti and Council president Herb Wesson understand how serious a problem it is.
It is something everyone should take seriously, according to Paul.
Developers need to provide "thoughtful solutions and dialogue" to address the issues concerning affordable housing as well as the anti-density and anti-development proposals looming, Build Better LA and the Neighborhood Integrity Initiative, he said.
Those in the industry should consider becoming engaged financially and intellectually to work with city staff to craft solutions to help "avoid what could happen" if either initiative were to pass if they appear on the ballots in November and March, he said.
On a separate panel about the secrets of mixed-use, Champion Realty CEO Bob Champion, who moderated, said this year marks his 40th in the industry, and he's never seen cap rates as low as they are now.
While discussing rent growth, California Landmark CEO Ken Kahan said, "We cannot project increased rents at this point."
The panelists talked about the high rents people in LA are paying these days—in some cases as high as $6k to $7k—and why some are choosing not to buy houses.
The panelists also mentioned residents care about what type of retail they're living above in mixed-use developments.
Lendlease SVP Mike Concannon, W.E. O'Neil Construction president John Finn, Suffolk Construction National COO Mark DiNapoli and the Rush Cos VP Devin Page discussed construction trends on a panel moderated by TOTO USA president of operations and e-commerce Bill Strang.
There was concern about the number of people who left the construction labor market after the last recession and haven't returned.
John said construction costs have continued to climb as the labor market has shrunk.
The panelists also said there is a need to reach out to local communities and get more younger people involved in trades.
They agreed there needs to be a focus on getting the labor force back.