Los Angeles is Ramping Up New Multifamily Construction

The Los Angeles-Long Beach-Glendale metro division (Los Angeles County) saw a sharp increase in multifamily permitting in the past year as the annual total jumped to 15,735 units in March, compared to 8,138 units permitted for the previous 12 months, an increase of more than 85%.

This tracks with the fact that the city of Los Angeles now leads the nation on the top permitting places list with 11,378 units permitted for the year. According to RealPage’s Market Analytics starts data, new supply is on the rise in the South Bay, Downtown Los Angeles, Palms/Mar Vista and Mid-Wilshire submarkets.

Many of the same markets that typically populate the top metros for multifamily permits list remained among the top 10 in March, led by New York and Dallas. After Los Angeles, Houston and Phoenix rounded out the top five, and all of the top five increased annual permitting totals by close to 20% or more in the past year.

Conversely, three of the remaining top 10 permitting markets decreased unit levels with significant slowing in Orlando and Austin and a moderate decline in Atlanta. Miami increased multifamily permitting by a third in the year-ending March to 10,772 units.

Among the next 10 markets ranked by annual multifamily permitting (top 20), Denver at #11 (8,968 units permitted) and Salt Lake City at #20 (5,926 units permitted) each increased total units permitted by 50% to 60% and bear watching for potential oversupply concerns.

Other markets with significant increases in annual multifamily permitting include San Jose (+3,127 to 4,745 units), Colorado Springs (+2,319 to 2,970 units), Madison, WI (+1,986 to 5,131 units) and Fayetteville-Springdale-Rogers, AR (+1,908 to 3,948 units). In addition to top 10 market Washington, DC, 16 other markets increased annual permitting by 1,000 to 1,500 units.

Supply pressure will be lessening in Charlotte (-2,878 to 5,527 units), San Antonio (-2,782 to 1,060 units), Lakeland-Winter Haven, FL (-2,187 to 348 units), Cape Coral-Fort Myers, FL (-1,643 to 2,892 units) and Fort Worth (-1,555 to 6,187 units). Six other markets decreased annual permitting by about 1,000 to 1,300 units each.

With the annual increases in seven of the top 10 markets, the sum of permitted units for March’s top 10 of 149,729 units was up 17.8% for the year but down 1.4% for the month.

Permitting by Place

Below the metro level, eight of January’s top 10 permit-issuing places returned to this month’s list with only The Bronx and the city of Austin remaining in the same place. The list of top individual permitting places (cities, towns, boroughs and unincorporated counties) generally include the principal city of some of the most active metro areas.

In addition to the city of Los Angles at #1, March’s list of top permitting places corresponds closely with the top 10 metro list for multifamily permits with the exceptions of the cities of Columbus and San Diego (although they were in the top 20 metros).

New York placed both the Brooklyn and Bronx boroughs among the top 10 places, while Queens and Manhattan were among the next 10 places. Houston’s unincorporated Harris County at #8 placed ahead of the city of Houston at #13, but the city of Dallas at #9 placed ahead of the Metroplex’s fast-growing northern suburb of Frisco at #14.

Led by a more than 3,900 unit increase in the city of Los Angeles, half of this month’s top permitting places had more units permitted for the year than last month, with an average increase of about 1,500 units. Conversely, the five other top 10 places averaged a decrease of about 360 units (-1,805 units total).

Texas placed six of the top 20 permitting places on March’s list, followed by four of the five New York boroughs and three cities in California. Although Orlando held onto the #10 spot on the top permitting metro list with 9,106 units, unincorporated Orange County provided 4,040 of them, and most of those permits were issued earlier in the past 12-month period.