There's good reasons real estate in LA is expensive. Lots of people with money want to live there, driving demand.
At least some of it stems from attempts by local governments to force property owners to keep rents etc low. That might keep costs down in the short term, but in the long term it's a surefire way to ensure that developers run screaming from the market, leading to shortages down the road.
That's not entirely true, Santa Monica has pretty draconian rent control laws and one of the biggest condo projects in years is going to come online this summer there. Rent control laws only affect a developer if they are intending to eventually convert their rental units into for sale condo units. The real issue is the cost of land in SF which then affects the density you need to build at and then finally the pricing which for most pro formas would look unrealistic until recently. Its why West Hollywood passed a small lot ordnance so you can sell SFR's instead of condos even though the common walls are only seperated by 6 inches between units but you can at least claim its a single family and justify the cost along with no HOA fee.
I was just today having lunch with a friend and he talked about a friend who had bought a 2 BR ~1400 sqft. condo in PA. Bought it for 700k a year or two ago. 700k- wow, that's pretty fucking pricey for a 2 BR condo right, and it's not even in a city?! They just sold it for 1.1M.
I thought I read somewhere that SF has some of the most onerous rent controls and tenancy rights of any city in the US?
It does mention it only applies to buildings from before 1979 though, so I guess that wouldn't necessarily deter developers from building new projects. I dunno what else is limiting construction of new housing there, but there must be some reason.
