Why the Pipeline for New Apartments Is Drying Up — and How Sensible Policy Can Fix It

A recent Los Angeles Times piece lays out a stark reality: even as demand for housing remains extremely strong, apartment construction in Los Angeles has dropped sharply. The article notes that roughly 30% fewer apartments are under construction than three years ago, with under 19,000 units actively being built in the most recent quarter — a more than decade low for the region. Los Angeles Times

Developers and investors tell a consistent story: it has become hard to find projects that work financially. Rising materials costs, higher financing hurdles, labor shortages, and shifting federal trade policy all squeeze project economics — and a core problem is regulatory and policy uncertainty that makes it difficult to project returns over the long time horizons investors require. The LA Times reports that institutional capital is increasingly taking money to other markets with more predictable rules, and that many projects now require rents in the $4,000–$5,000 per month range just to break even — pricing that’s out of reach for most Angelenos. Los Angeles Times

This is a policymaker problem as much as a market problem. Los Angeles — and California more broadly — needs policies that restore predictable economics for housing production while protecting affordability and community priorities. That doesn’t mean gutting oversight or shortchanging environmental and workplace protections. It does mean crafting targeted, predictable, and incentive-based solutions that align public goals with private capital.

We need sensible, evidence-based policy — not ad hoc measures — to restore investor confidence and accelerate production of homes at a range of price points. That will require collaboration across developers, housing providers, community leaders, and local governments to design incentives and guardrails that work on the ground.

At K3 Holdings, we remain committed to building and preserving housing that Angelenos can afford. We welcome constructive engagement with cities, county leaders, and community stakeholders to craft policies that produce both more homes and stronger neighborhoods. The scale of the problem demands practical, shared solutions — and we’re ready to help implement them.

Source: Roger Vincent, “Almost no one is building new apartments in Los Angeles. Here’s why,” Los Angeles Times (Oct. 1, 2025).