LA Development Permitting Drops 45 Percent Since April

The decrease could be crushing to the construction industry


New second quarter statistics show the pandemic’s devastating effects on real estate development in Los Angeles.

Urbanize LA reported that the L.A. Department of Building and Safety issued 45 percent fewer building permits during the second quarter this year compared with the same period last year.

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The decrease could be crushing to the construction industry, and coincides with the grim results from the recent Allen Matkins/UCLA Anderson survey, which is an indicator of future projects and commercial construction in California. The survey showed a drop in sentiment for developers across all commercial real estate spaces through 2023, and indicated construction for retail and office will significantly decline over the next few years.

Although L.A. has seen notoriously high construction costs for years, some active developers expect that land, building materials, and labor costs will come down amid the pandemic, according to the survey.

In a sign of how healthy development was prior to the pandemic, L.A. issued $7.8 billion worth of building permits from July 1, 2019 to June 30, 2020. That’s a slight increase from the prior 12 months, despite the sharp drop from April to June this year.