In an effort to address California’s severe housing shortage, residential construction has been deemed an essential service since the issuance of the first statewide stay-at-home order in March 2020.
Although work was allowed to continue, construction sites in Los Angeles were required to adhere to strict health and safety guidelines or risk being shut down completely. Nevertheless, construction forged ahead in the city’s burgeoning downtown and 1,393 new rental apartments were delivered across four luxury high-rises, according to a year-end report by the Downtown Center Business Improvement District.
These new residential projects included AMP Lofts by Greystar, a 320-unit residence near the Arts District; HWH Luxury Living by Standard Development, a 188-unit residence in the renovated Herman W. Hellman building; THEA by Greenland USA, a 685-unit residence within the $1 billion Metropolis mixed-use development; and 1133 South Hope by Greystar and Z&L Properties, a 200-unit residence in emerging South Park.
Prior to 1999, there were fewer than 12,000 residential units in all of DTLA — a relative ghost town within the nation’s second-largest city. Today, that number has ballooned to 49,385 and an additional 4,829 units are currently under construction. There are over two dozen residential projects in the works throughout downtown with many more in the planning stages.
While the construction sector may have shown resilience, the shuttering of downtown office buildings and urban amenities caused apartment rents to decline sharply in 2020. According to the report, the typical asking rent of a DTLA apartment fell $335 year-over-year in the fourth quarter to $2,402. The average price per square foot of an apartment decreased from $3.25 to $2.92 as the vacancy rate hit 15.7 percent.
The typical price per square foot of a downtown condominium dropped from $650 to $635 during the same period and there were nine fewer transactions than in Q4 2019. The last few months of the year were further hindered by the regional stay-at-home order that was implemented in early December. Although real estate was considered an essential service, many Angelenos were discouraged from moving during this time due to surging COVID-19 cases and the onset of the holiday season.
With the end of the pandemic on the horizon, optimism is returning to DTLA. Among the rental projects anticipated to open in 2021 are The Grand by The Related Companies, a mixed-use development designed by Frank Gehry that will add over 400 units; 945 W. 8th by Brookfield Properties, a 64-story high-rise in the Financial District featuring 784 units; and Eighth & Figueroa by Mitsui Fudosan America, a 438-unit glass and steel tower only steps away from the 7th Street/Metro Center transit hub.
Condominium projects slated to open this year include Perla on Broadway by SCG America, a collection of 450 for-sale residences near Pershing Square; Oceanwide Plaza by Oceanwide Holdings, a 42-story tower with 405 suites in South Park; and 945 W. 8th St. by Brookfield Properties, a 784-unit mixed-use development adjacent to the FIGat7th shopping center.