Multifamily Development Essential in 2015

LOS ANGELES—The nation and California are positioned for a stable 2015, according to the latest UCLA Anderson forecast. While the report shows that unemployment rates will continue to decline and corporate and consumer spending will grow, helping to fuel economic growth, William Yu, an economist at the UCLA Anderson Forecast, explains that we really need multifamily development in major markets throughout the country, especially in Los Angeles.

“Multifamily development in most metropolitan areas is the main trend, and it is the right trend,” Yu tells GlobeSt.com. Although from a broad perspective he said that there were no major areas of concern in the economy for 2015, he does see an immediate need for multifamily development. “Los Angeles has the highest home price appreciation over the past 14 years compared with other major US metropolitan areas. I think one of the key reasons, which is usually over looked, is because Los Angeles has one of the lowest home supplies compared with similar markets,” Yu adds. “If we want Los Angeles to grow, we really have to change the mentality. Right now, Los Angeles is very flat. I would say that high density for cities is good because you increase home supply; young people will be more likely to come here; and business will be more likely to start here. In the past, we have developed out, but we have reached the limit. Now, the only place we have to develop is up.”