The Efficacy of Allocating Housing Growth in the Los Angeles Region (2006–2014)

Abstract

California is known for home values that eclipse U.S. housing prices. To increase housing inventory, California has implemented a regional housing needs allocation (RHNA) to transmit shares of housing growth to cities. However, no study has established RHNA’s efficacy. After examining the 4th RHNA cycle (i.e., 2006–2014) for 185 Los Angeles region cities, this study determined that RHNA directed housing growth to the city of Los Angeles and the region’s outlying cities as opposed to increasing density in the central and coastal cities. Second, RHNA directed 62% of housing growth to the region’s unaffordable cities. Third, the sample suffered a 34% shortfall in housing growth due to the Great Recession but garnered an average achievement of approximately 93% due to RHNA’s transmission of minimal housing growth shares. Lastly, RHNA maintained statistically significant associations with increased housing inventory, housing affordability, and housing growth rates, indicating that RHNA may influence housing development.