> The marginal cost of a housing unit is vastly higher than the cost of building that unit.
The cost of building a housing unit is rather out of control in LA right now, due to a number of factors. Some of those factors involve permitting, but some involve complexities of complying with building regulation, and there is also insufficient availability of contractors and insufficient availability of labor.
The demand is there: https://la.urbanize.city/post/plan-skyline-altering-tower-ab...
The point is that the vast majority of budgetary issues in LA could be solved by just legalizing, and streamlining the production of something as simple as three-story row housing like the kind that's normal in San Francisco (which has a surprisingly good long-term outlook despite their current budget woes).
It's not rocket science here. If you make it easy to build housing, the industry grow to meet demand. If you make it difficult, it will be dominated by a handful of major players who can navigate the process.
I recently reviewed a bid from a not-particularly-fancy contractor for nearly $1M to build ~1200 sq ft in an empty lot in Los Angeles. This isn’t just a planning permit probem.
Even in cheaper areas without earthquake or hurricane construction codes, minimum $/ft is like $250 (for lowest quality components) and realistically more like $400.
Inflation for materials and labor makes any build incredibly expensive.
Plenty of labor and contractors other places in the US that could be brought in if someone was willing to offer stable work and pay. Even with the out-of-town bonus, many midwestern contractors and laborers would come out to near the same cost as locals because they were already making a fraction the wage out in the midwest.
But non-union construction is known to be unstable even outside construction's general boom-bust cycles and nobody is going to travel 1500 miles away without a contract guaranteeing they will have work/pay past the first 2 weeks. Too many workers have gotten burned being given great offers to travel for work only to get screwed over before they can recuperate their costs. Hell our own President is famous for screwing over construction companies and people just accept it as normal for the industry.