Last week, The Wall Street Journal reported on the housing shortage in Venice Beach. As one of Los Angeles' hottest neighborhoods—in large part due to the influx of tech companies that have made it their home and lent it the new nickname, Silicon Beach—it might come as a surprise to learn that the zip code has not added a single new housing unit in 15 years. In fact, Venice Beach had roughly 700 fewer housing units in 2015 than it did in 2000 and despite adding 4,000 new jobs, lost 3,800 residents. 

According to Issi Romem, a chief economist at BuildZoom who conducted the analysis of data for the publication, the lack of new housing accommodations is a result of overly strict building and zoning restrictions as well as stiff community opposition that has caused the precinct to become the "Toughest Zip Code in America to Build In." When we expand from zip code to city limit, Romem's data found that Los Angeles, in general, sits right behind Honolulu to take second place in terms of toughest cities to build in. 

Romem identified tough-to-build places by gauging the interest of developers in those places. Few proposals for new construction is a good indicator that a city and/or area is tough to build in. Romem's logic follows that these neighborhoods see little attempt at new construction because developers have determined the area to be unfeasible and would rather spend the energy on a project with a more likely outcome. Along those lines, Romem also asks "where does an increasing willingness to pay for housing fail to result in more housing being built?" The thinking here is that if the demand is high and no ones clamoring to supply it, then developers must be turned off by high likelihood in obstruction, either environmental or man-made.