Thank you for sharing!

Your article was successfully shared with the contacts you provided.

Finding a solution to the affordability crisis plaguing California is a top concern for both residents and the development community. At RealShare Southern California last week, experts sat down to talk about the affordability problem, what is driving it and why the current proposed solutions—namely the potential repeal of Costa Hawkins—are not going to bring down the prices. The panel, Overcoming the Affordability Crisis, included speakers Jim Andersen, SVP at Trammell Crow Company; Mike Rovner, president and founder at Mike Rovner Construction; Kitty Wallace, EVP at Colliers International; Janet Neman, senior managing director at Charles Dunn Co.; Eric Sackler, director of Los Angeles at Coldwell Banker Commercial, with moderator Jeffrey Hudson, managing director of capital markets at Walker & Dunlop.

The cost of construction and land prices are the biggest cause of the affordability crisis. Andersen estimates that his hard cost expenses are $300 per square foot to develop an apartment building in Los Angeles, and all in, the cost is closer to $500 per square foot. To recoup those costs, Andersen said, “You either build tiny units or swanky places.” At $500 per square foot, rents need to be approximately $4 a square foot, putting rents for an 800-square-foot apartment around $3,200 per month.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

More from this author


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.