The Mixed Recovery of the Los Angeles Economy: Ongoing Stuggle With Housing Costs!

The recovery of the Los Angeles economy has been mixed, with some sectors performing better than others. Overall, the city's economic gains have outpaced national averages, but much of that was due to the harder downturn experienced by Los Angeles compared to most other U.S. metros.

The entertainment industry, which is a major contributor to the local economy, has seen solid job gains in recent years and has recovered all the jobs lost during the pandemic. However, the tourism-related sectors have yet to regain all their lost jobs. Before the pandemic, over 500,000 people in the county were employed in the leisure and hospitality industry, and the city had more than 50 million visitors in 2019.

The industrial sector has sustained growth through the pandemic due to increased demand for warehouse space from e-commerce operators. A backlog at the ports has led to a record number of ships waiting to unload cargo, and the need for warehousing space and limited land has resulted in developers targeting infill development sites for modern warehouse construction.

One structural issue facing the Los Angeles economy is the prohibitive cost of housing, which is a major impediment to hiring and has often been cited as a factor in companies relocating to other parts of the country. Although the housing market appears to be cooling, home prices have increased significantly since the onset of the pandemic.

Despite these near-term issues related to the pandemic, the Los Angeles metro economy has many positive attributes. It has two major universities - USC and UCLA - and top-tier schools such as Cal Tech, which support a growing tech economy. The city is also consistently among the top five metros in the country for venture capital investment, and education levels, while below the national average, are improving every year. In addition, more people making six-figure salaries are moving to Los Angeles than are leaving.