A lack of developable land could be holding back the economy in Los Angeles.
That’s according to one Bloomberg columnist, who says that Southern California’s issues with supply could be contributing to its recent slowdown in job growth.
The L.A. Metro, which encompasses L.A. and Orange counties, posted a job growth of 1.1 percent over the 12 months ended in July, according to the Bureau of Labor Statistics. That’s lower than the national average, at 1.6 percent, and other major metropolitan areas, including Chicago, New York and Miami.
Yet jobs in L.A. have actually been growing rapidly in the last decade, and surpassed the national average in 2010 for the first time in three decades. That could mean that housing affordability — a more recent economic issue — could be playing a role in the sluggish job growth.
In July, a National Association of Realtors survey ranked L.A. as the least affordable place in the entire country. A typical household in L.A. can barely afford to buy four percent of the homes listed for sale, according to the study.
L.A.’s increasing unaffordability — more than 17 percent of homes are valued above $1 million — could be keeping workers away from the city, driving them to other more affordable cities in the state, or out of California altogether. A severe housing shortage, driven by a lack of developable land, has been a key reason for the price hikes.
Other metro areas in California picked up most of the slack, bumping up the statewide figure to 2 percent. Both the Riverside – San Bernardino and San Jose metros posted job growth upwards of 3.2 percent, surpassing major job hubs like San Francisco and San Diego.
San Francisco, with 1.6 percent in growth, ranked ninth out of the 12 biggest metropolitan areas. San Diego, meanwhile, trailed with 1.5 percent growth. [Bloomberg] – Natalie Hoberman