Cost of building apartments in LA

Interesting thread on reddit:

the number being tossed around is that it costs over $725,000 a unit for multi-fam in LA. The number from Marcus on another thread is $850,000 in the bay area I believe. The numbers seem to be fairly well sourced from the evidence provided in the thread. If that’s true, and we also accept there is a shortage of housing, you would be well off investing RE in major CA metro areas as long as your buy in price is below that. You will always cost less then new construction which means you will make money on rent and/or appreciation in the long run


Generally agree, but the wild card is prefab. If that could actually take off and get some grounding and acceptance that could take a dent off construction costs. Perhaps still pie in the sky stuff but that is the general direction we are headed towards, ain’t it? Labor costs are high, no one is learning the trades anymore, Google is experimenting with buying modular housing to offer to folks, etc…

It’s a great read. It gels with what I read over the years. Parking requirement is the most evil of code:

EVERYTHING built in LA is defined by parking, whether we like it or not. More specifically, everything is defined by our parking code. Los Angeles, unlike, say, New York, has extremely strict parking code for all residential occupancies. For all buildings in an R4 zone (AKA condos and rental units with more than 3 units) each unit is required to have 1 full size dedicated parking space. Compact spaces are not allowed, nor tandem spaces. In making our assessments as to required space for parking, the typical calculation is that each full parking stall will require 375sf of space (after considering not just the space itself but also the required drive aisle, egress, out of the structure, etc. So that 800sf apartment is actually 1175 sf to build.

But this is the thing that’s most susceptible to tech disruption: ride sharing and eventually self-driving cars. I think the combination of these two will drastically change cities. If I can get an Uber within minutes that costs me a couple bucks anywhere I want to go (because it doesn’t need to pay a human driver) there is no reason to own a car.

We are talking about 15 or 20 years later though. By then I am sure regulators will find other “necessities” to drive up building cost. Maybe all new buildings will need to be carbon negative or something. So hell yes, just buy as much as possible in SF and LA and watch money grow.

Do you think there’s any chance of that with the power of labor unions in a super blue state?

First step is prefab storage shed.

Prefab portable schools are common

Something has to give. Unions are declining in general and the housing issue is increasing. Which should I put my money on???

Prefab may in the distant future knock off 20% of construction costs…But entitlements and land still are the major costs and construction costs are going up at 10% a year…Thus no future savings…Your investments are safe from the risks of over building in your neighborhood anywhere in coastal California. .

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As far as the cost of parking stalls, lifts can cut the cost of a second stall…Parking spaces cost $300/sf.
Lifts cost $2-$20k each…compared to $75k for an extra space…

Yes, I first saw them in use in New York I think. Made sense, can double your parking capacity if you have the headroom or it is a open parking lot. Big Bro and I were kicking the idea of how to add half a dozen parking spaces to our Chinatown building and the idea of an lift that lowers down sounded quite feasible and relatively inexpensive compared to jacking up the entire building. Funny how things have changed, now I am thinking parking spaces may be overrated soon. Yes, a parking space that comes with a penthouse apartment would add value since rich folks want their cake and freedom but for the masses it may make sense to convert the space to another legal flat instead. Possibly way more income potential. One day…

Lifts are merely a construct to get around the zoning parking regulations. .Probably the best solution is to just not require parking…Thats what the loft builders figured out

For sure, but I was simply thinking of the profit motive in adding additional parking. Do you know what they are charging for parking in Manhattan for a day??? OMG!!! Even my office building is charging what, $40 a day, which is not exactly cheap…

Here’s another article on cost of free parking:

Lift is an intersting parking idea. If I have a one car garage with regular ceiling height, is it usually easy to add a lift to make it 2 car garage? I have not seen lifts except in the new apartments

They have lifts in SF and Oakland new condos to meet parking requirements. .saves money and excavation

Where I first saw them was when I was back in Manhattan. You can imagine the value of essentially doubling your parking space revenue in those open air parking lots. Pretty cheap now. Just like adding a pneumatic elevator to a new or existing home now. Not that expensive…

Is it easy to get a permit for a lift parking?

Why bother…It is personal not real property. …Just like a refrigerator

Yeah, I suppose you can check wth your local jurisdiction to see if you need one but hopefully not if it is on your private property for personal use.

Lifts can be bought new super cheap…I bet you could find a used one for $500.

Biggest issue is garage height…But some lifts will work under 8’