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Sunday, Aug 7, 2022
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Costs Could Hamper Needed Development, Study Says

Rising construction materials and land costs could hamper much needed development in the area, according to a study just released by the Los Angeles County Economic Development Corp. The study found 252 major expansion projects underway in the five-county region during 2005, 27.5 percent fewer than the active projects in 2004. At the same time, the research found declining office and industrial vacancy rates in the region, an indication that the market is ready to absorb additional development. While the study’s authors noted that the slowdown in development as compared with 2004 indicates a more conservative approach by developers, it also suggested that rising costs could derail some of the needed investment. “A growing challenge and concern for the area is that there is not enough land available for new commercial development to accommodate business growth,’ said Jack Kyser, chief economist and a senior vice president of the LAEDC. “Exacerbating the situation has been the run-up in construction material costs.”

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