If California would pass legislation radically limiting regulatory burdens that municipalities and other legislative bodies could pass, this problem would disappear within a year or two.
Also it has now been a few years since DTLA was a "blight" or a "cheap ghetto". Is there a bigger sign of gentrification than Whole Foods[1]?
[1] - https://www.wholefoodsmarket.com/stores/downtownlosangeles
100% occupancy is bad, because it means the city is not flexible to changing demands. Fill up that new development 100%, and then the next person who needs to come in would need to double up, or bid higher and displace somebody.
That is my big problem with the Planning process, trying to manage growth. It’s slow and brittle to unanticipated changes.
[1] - https://la.curbed.com/2017/9/15/16316040/downtown-la-high-va...
There might be a cogent argument for fully centrally planned housing, but instituting price controls on new market supply when a shortage is at its worst is a staggeringly clueless demand.
And let’s be clear, affordable vs luxury housing is about price controls, not the units themselves. There is nothing physically embedded in the average “luxury” 700sqft unit that makes it worth more than a McMansion in Iowa. Only the supply and demand situation where it’s located. Countertops and dishwashers don’t add +$2000/mo.
Low interest rates are the key factor in driving demand for borrowing. Low interest rates signal a healthy supply of savings from which to borrow. So, low interest rates naturally match a large supply to a healthy demand. Such a scenario would create a market for investment-led expansion.
High interest rates signal the opposite. Either the supply of available savings is insufficient, or relative demand is high enough to drive out uncompetitive demands for savings.
But even california official economist reports say the situation is harming the state tremendously. There is no debate about what needs to be done. Its just about politics now.