Quote:
Originally Posted by colemonkee
It comes down to land prices and construction costs, not necessarily availability of jobs. Downtown has one of the largest concentrations of white collar jobs in the city. Land prices in LA are very high, probably somewhere comparable to those in NY or SF (though both of those are likely higher than LA). Then factor in that labor costs are likely higher in LA due to union rules and higher costs of living, and materials costs may be higher due to supply chains, distance from manufacturing centers, and sales tax. Compound that with the very tedious and expensive process of code compliance and plan check in LA, and you have your answer as to why buildings are more expensive to build than in, say, Seattle.
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If land prices and construction costs were the key factors, Cleveland would be booming and Manhattan would be devoid of development. Ultimately, good economics, meaning demand created by job creation and gdp growth, drive construction. Of course, there are other factors at play and certainly DTLA will get new construction just because its a large metro area and DTLA has become Angelenos' new toy but creating more jobs would make DT development more impressive. The good news is that in the last two months job creation in S CA has started to ratchet up........May and June were the best months for job creation in CA since the great recession happened.
As for construction costs, the difference between Seattle and LA are not significant:
http://www.reedconstructiondata.com/cons...ruction-costs-for-four-types-of-accommo/
http://www.reedconstructiondata.com/cons...ruction-costs-four-types-of-office-buil/
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