Even if the incentives to build luxury apartments are gone, the codes still don't make other apartments all of a sudden economical. The parking garage beneath by west LA near UCLA rental is virtually empty because most people come here without cars. But they have to have it so...
But speculation is a problem, especially with Chinese investors who have already tapped out their own property tax-free markets. Just I don't think that is what is going on here.
Rich investors want to hoard the kind of properties they would want to live in. Hence luxury apartments and houses that take up way too much prime inner city land - not just in Los Angeles, but Singapore, Vancouver, London, Hong Kong and many, many more.
Hoarding obviously takes supply off the market and rents are obviously driven by supply, so rents have gone up.
>Even if the incentives to build luxury apartments are gone, the codes still don't make other apartments all of a sudden economical.
If land became a lax liability rather than an asset that gives you the license to tax others, the incentives to build high rises to put ordinary people in would be much stronger.
Of course, without doing something about wealth inequality all of that money would still flee into other asset classes. Bitcoin would probably do well :)
You'll benefit from this scenario at some point as well.
Boomers never paid any taxes on the extreme capital gains on their primary residences and I'm not holding my breath that prices will quintuple again in my lifetime. They got a huge something for nothing and the least they could do now is sell their houses at a huge profit and leave so workers with families can live closer to work.
If it's a local problem with local solutions then why did it happen to more or less every major city in the developed world at the same time? Weird parking regulations are specific to Los Angeles.
It could be that wealth inequality is the primary cause of all of this but what do I know? I'm not the kind of person who would make a ton of cash if Los Angeles building regulations were slashed.
Ironically the architect actually indirectly points this proximate cause by pointing out that land prices have skyrocketed. He just didn't think to question why.
If land prices keep going up investors' incentive to treat apartments like bars of investment gold will keep going up too. If wealth inequality gets worse, more of that money will be stashed in land (luxury apartments), causing prices to rise. All of this will happen whether or not Los Angeles parking regulations are cut.
If California rolled back prop 13, on the other hand, that would help somewhat to de-goldify land and provide enough money to the state budget to build affordable housing the old fashioned way it has always been built: by the government.