Future of LA Real Estate is in Building High-Density Projects
In Los Angeles, people are spending more time on the road because they are living farther away from where they work, due to high rents. The reason for this: supply and demand, there are not enough units being built to keep up with the number of people, particularly young professionals who make a decent income and want to live in an area close to where they work. Unfortunately, incomes have not kept up with rents and with dwellers devoting upwards of 30, 40 or even 50% of their monthly income to rental payments, effective solutions need to be in place, such as making more efficient use of existing real estate in the city, building micro-units and expanding our public transportation infrastructure to service dense areas – especially as taller structures are built. The future of Los Angeles real estate is in building high-density projects, particularly multifamily and mixed-use developments.
Los Angeles County is filled with old, one or two story apartment buildings. This is an inefficient use of space especially in highly dense areas such as Westwood, West LA, Brentwood, as well as the city of Santa Monica. Many of these multifamily structures have generous setbacks, carports & ground level parking – taking up valuable space on a plot of land. These buildings met the need for housing in the 1940s, 50s and 60s when the population was a fraction of what it is now. In addition, these areas were considered suburbs of Los Angeles when these neighborhoods were conceived and planned. These buildings have long outlived their use and need to be replaced with taller multifamily buildings, possibly a mixed-use development (with underground parking) if the location is on a busy street. In an era when these areas have blossomed from sleepy bedroom communities to centers of business and commerce, the development for higher density housing is imperative.
Furthermore, there needs to be a greater variety of units in these multifamily buildings of the future. Developers need to focus on building units that are smaller than the average apartment in Los Angeles. These are called micro-units and are extremely common in the major cities of Europe and Asia (such as Paris, London, Seoul and Tokyo) where densities are through the roof. The size of the average studio in the city is 524 square feet (SF), a 1-bedroom dwelling is 729 SF, and a 2-bedroom unit is 1,043 SF. If a building were constructed with micro-units that are a fraction of these sizes, many more units could be offered in a building, while still having a comfortable space for a person or a couple to share.
Every new multifamily building should not be composed of all micro-units, since more spacious units need to built for larger families or those with larger space requirements, but for single people, couples and perhaps small families with infants/kids, mini apartments could be a more convenient and affordable solution. This is especially true if they are located within walking distance to jobs, schools and retail/restaurants, thereby lessening car trips. Micro-units would command less expensive rents, mostly due to their size. For example, Luxe@Broadway is a 5 story micro-unit property in Santa Monica. It offers studios and 1 bedrooms from 362 SF to 440 SF and has convenient access to restaurants on the ground level, Third Street Promenade and the Expo Line. Rents range from $1,519 to $1,736, affordable for many working professionals.
While a micro-unit or multifamily unit is not for everyone, many will agree that by compacting units in multi-story structures, having places to shop and eat within walking distance – and increasing heavy-rail transit in dense areas – would reduce traffic congestion for everybody on the roads. Meanwhile, those who choose to live in micro-apartments will enjoy convenience while paying rent that is in line with their income. With the population of Los Angeles County projected to be at over 16 million people in 2050, the future of real estate (in LA and in every heavily populated city of the world) is in developing multi-story properties.