Mayor Karen Bass continues to misdiagnose Los Angeles’ housing crisis. And that’s bad news for her constituents.
In a recent New Yorker profile, Bass re-iterated her skepticism of the new housing cropping up all over Los Angeles. Mayor Bass off-handedly remarked that she was unsure who lived in all the new apartments going up over the city. This follows comments in January where Mayor Bass told the LA Times that she “never understood who lives in all that luxury housing,” implying that this new luxury housing had a “high vacancy rate” due to “absentee owners.” Yet, despite what Mayor Bass claims, Los Angeles does not have a vacancy crisis, and her rhetoric is at best misleading and at worst destructive to our city. Just like it was the duty of political leaders to relay accurate information about COVID-19 during a global pandemic, our mayor must avoid myth-making about new apartments during a housing crisis. And as long as our political leaders rely on false information to discourage new building projects, our housing crisis will only get worse.
The false belief that LA has too much vacant housing is not new. In 2019, an influential study by the Alliance of Californians for Community Empowerment-Los Angeles purported to show that vacancy rates in new housing projects in downtown LA were astronomically high because new housing was primarily being used as a vehicle for real estate speculation. Even though they retracted the report after the underlying data proved inaccurate, its narrative had already confirmed many progressive policymakers’ skepticism about the merits of new construction. Yet, far from an abundance of vacant units, greater Los Angeles historically has had one of the lowest vacancy rates in the US, with apartment vacancies at a mere 3.9% in LA City at the end of 2022. This is significantly lower than the national rate of 5.8% and a fraction of the 16.5% of office rentals that sat vacant in 2022.
What’s more, a significant portion of these vacancies is a by-product of Angelinos relocating within the city, with nearly half of all vacancies resulting from these temporary vacancy periods. Thankfully, these vacancy periods caused by turnover are usually very short, seldom extending beyond a few months. But given how often people relocate in LA, temporary vacancies add up across the city’s vast housing market. And when new apartments come online, research shows vacancy rates temporarily increase. When new units are opened, they enter a “lease-up” period, where new tenants gradually move in over a period of months. But this doesn’t automatically bring down the vacancy rate since those new tenants vacate older units, setting off a “migration chain” that ripples through the housing market. After one year, vacancies in new buildings stabilize at an average of 4.7%, only slightly above the overall vacancy rate in the city.
The data indicate that Mayor Bass’ vacancy myth is just that, but the mere fact she views these imagined high vacancy rates as a problem demonstrates a fundamental misunderstanding of the housing market. Rather than seeing vacant housing units as a waste, it is better to see them as vital to dealing with the inefficiencies baked into real life. Moreover, more vacant units on the market means tenants have more leverage to negotiate good deals with their landlords. If we want to ensure all people (especially the vulnerable) can access the necessities they need, we need a society with markets that produce more than simply “enough” goods; we need abundance.
Research confirms this principle: low vacancy rates and high median rents are the two main explanatory variables for a surge in homelessness in American cities over the last ten years. Thus Los Angeles’ low vacancy rate helps explain why we have more homeless residents than any other city in America. Compare LA’s vacancy rate of 3.9% to Houston, where a steady flow of new building projects has kept the vacancy rate above 9%. Because of Houston’s abundance of affordable and vacant housing options, they have successfully housed thousands of homeless residents in the last decade, while LA’s homeless count has only gone up.
And while many people perceive new housing in downtown LA as unaffordable and “luxury,” they are seldom the most expensive option on the market. An almost universal rule of the housing market is that condos are more affordable than single-family housing in the same neighborhood. Take Mayor Bass’ community of Baldwin Hills. According to Zillow, at the market peak in August of 2022, the median single-family home in the zip code was valued at $1.13 million, while the median multi-family unit was valued at $586,000, half the price of a single-family home. Estimates are that at least 40% of LA’s housing stock is single-family homes, so while new condos may not be the most affordable option, they are far closer to the middle of the housing market than most realize.
Mayor Bass has made it clear her primary mission as mayor is to help get folks off the streets, and she has publicly lamented that many of her neighbor’s kids cannot afford to return to LA. The reality is that the only way LA will achieve either of these outcomes is if it continues to encourage new market-rate housing. To fulfill the promises of her campaign, Mayor Bass should spend less time worrying about whether the new apartments built across the city are vacant and instead commit herself to ensuring that housing in Los Angeles is plentiful for all.
Thomas Irwin works for a faith-based nonprofit in Los Angeles focused on economic development and helped start a non-profit dedicated to economic empowerment in Los Angeles. He is also involved in various efforts to advocate for housing reform in Los Angeles and California broadly. He lives in East Los Angeles with his wife and two children.
