How Many Homes Can LA Build?
Quote of the Week
“This is a weaker month than we’ve come to expect this year, with a surprising drop in the state’s labor force. This suggests that employers will continue to struggle to find workers this year.”
Taner Osman, Research Manager at Beacon Economics and the UCR Center for Economic Forecasting
Big Picture
A recent paper from the Terner Center & Labs shows some new analysis based on the Terner Housing Policy Dashboard that simulated six policy options that encourage new home building in Los Angeles.
They ran simulations of six policy scenarios - aimed at lowering impact fees, streamlining approval processes, and increasing allowable density, among others—across the city to show how these changes might impact home building on their own or in combination.
Their analysis also allows us to evaluate which policy changes most concentrate or scatter new home building throughout the city, with important implications for racial and economic equity and climate goals.
Rather than prescribe a particular solution, this analysis looks at how much we might expect a particular policy lever to change homebuilding outcomes in the city and is intended to demonstrate the value of data-informed policymaking.
California has lost more groundwater than held in all its reservoirs.
Pumping water from aquifers in California's Central Valley has caused the land to sink, permanently reducing the water storage capacity.
California’s Central Valley has lost roughly 85 cubic kilometres of groundwater storage since 2004 due to intensive pumping during periods of drought.
The Central Valley is one of the most productive agricultural regions in the world, growing 40 per cent of the fruit and nuts produced in the US.
When surface water is inadequate to irrigate all those crops, farmers pump groundwater from the region’s aquifer. For more than a century, farmers have pumped more groundwater than was replaced.
Chronic Labor Shortage Driving State's Sluggish Recovery
CA’s labor market expanded slowly in September, with total nonfarm employment in the state growing by just 6,500 positions over the month, according an analysis released jointly with the UCR School of Business Center for Economic Forecasting and Development. August’s gains were revised up to 36,000 in the latest numbers, a 16,100 increase from the preliminary estimate of 19,900.
While California added jobs at a healthy pace in 2021 and 2022, as of September 2022, the state’s economy had not yet recovered all the jobs that were lost during the onset of the pandemic. There are still 24,700 fewer people employed in California compared to pre-pandemic February 2020.
Overall, total nonfarm employment in the state has contracted 0.1% since that time compared to a 0.3% increase nationally. California’s payrolls increased by 4.2% from September 2021 to September 2022, outpacing the 3.0% increase nationally over the same period.
The driving factor behind California’s slower recovery is the state’s chronic labor market shortage. California’s labor supply fell by 57,700 in September, and since February 2020, the state’s labor force has fallen by 246,000 workers, a 1.3% decline.
US Holiday Air Travel May Be More Turbulent Than Summer’s Frenzy
The US travel industry expects this holiday season to be busy enough to make last summer’s turmoil seem orderly.
Airport officials and industry analysts say passenger traffic for the Nov. 24 Thanksgiving holiday through New Year’s is set to reach or exceed 2019 levels, when 93 million people packed US flights.
This summer, the desire to resume vacationing and visiting family boosted passenger traffic to about 90% of pre-pandemic levels.
The total number of airline customers in North America this year is projected to reach 94% of pre-pandemic levels, according to the International Air Transport Association. In 2019 -- the year before Covid hit -- US airports handled a record 1.1 billion travelers, according to the US Bureau of Transportation Statistics, though that number includes people on both domestic and international flights.
The rising demand means fliers will pay the price at the ticket counter: airfare costs around Thanksgiving time are up 43% from last year and 22% from 2019 levels, according to travel booking app Hopper.
Median rent fell for the first time in 2022 on a month-to-month basis as shelter inflation cools off
SoCal Container Backup Ends
The backup of container ships off Southern California’s coast that was at the heart of U.S. supply chain congestion during the Covid-19 pandemic has effectively disappeared.
The queue of ships waiting to unload at the ports of Los Angeles and Long Beach fell from a peak of 109 ships in January to four vessels this week, according to the Marine Exchange of Southern California.
Shipping specialists say fewer ships than normal are heading to the main U.S. gateway complex for imports from Asia in coming days and that cargo volumes that had long swamped the ports now are receding.
Bottlenecks continue to delay cargo at other major U.S. seaports and at inland freight hubs, but the end of the backup at the big ports in California signals broader supply-chain tangles that have been troubling retailers and manufacturers are unwinding.
Port and Biden administration officials point to a range of factors that have helped ease congestion, including a tighter queuing system that had ships lining up further out in the Pacific, new container yards that freed up space on docks, and government initiatives that fostered better collaboration between retailers, ports, railroads and truckers.
But the biggest gain likely has come from fewer boxes reaching the busiest U.S. seaport complex for container imports. U.S. import volumes are declining, according to trade data analysts, and a growing share of the shipments are heading to ports on the East and Gulf coasts as importers ship away from the Southern California backup.
Leadership in the Community
The California Community Foundation and Digital Equity LA have released a new report that found that an Internet Gap Snubs LA Low-Income Residents & Widens Digital Divide.