Why L.A. developers aren’t building more apartments, despite epic housing shortage – Los Angeles Times

Why L.A. developers aren’t building more apartments, despite epic housing shortage  Los Angeles Times

In 2021, developer Paul Schon was paid $6.5 million for a 14-unit Hollywood apartment building he constructed. Over the next five years, much of Los Angeles' multifamily market imploded. Schon just bought the building back for $4.75 million. "This is a live example of what happened to L.A. apartment building values in the last few years," he said. A 30% drop in half a decade seems shocking, but it's now the norm. In 2022, the average sale price per unit in new and existing multifamily buildings in L.A. County was $397,289, according to commercial real estate firm Kidder Mathews. In 2026, it's down to $280,591. The city of L.A. is suffering from a housing shortage.

The state is practically begging it to build more homes, and Mayor Karen Bass implemented a faster permitting process earlier this year. But Schon and a growing number of developers across L.A. say that building new apartments simply isn't an option at the moment. Projects don't pencil. Taxes eat through profits. And the few developers still building are often opting for smaller, safer projects such as ADUs and townhouses as opposed to the taller, denser developments that experts say the city desperately needs to help solve the housing crisis. It's leading to a market where no one is thriving. Developers aren't making money, and tenants