diff --git a/nova/compute/api.py b/nova/compute/api.py
index 031587db99bc..686fe63b8f88 100644
--- a/nova/compute/api.py
+++ b/nova/compute/api.py
@@ -249,6 +249,13 @@ class API(base.Base):
         self.image_api = image_api or image.API()
         self.network_api = network_api or network.API()
         self.volume_api = volume_api or cinder.API()
+        # NOTE(mriedem): This looks a bit weird but we get the reportclient
+        # via SchedulerClient since it lazy-loads SchedulerReportClient on
+        # the first usage which helps to avoid a bunch of lockutils spam in
+        # the nova-api logs every time the service is restarted (remember
+        # that pretty much all of the REST API controllers construct this
+        # API class).
+        self.placementclient = scheduler_client.SchedulerClient().reportclient
         self.security_group_api = (security_group_api or
             openstack_driver.get_openstack_security_group_driver())
         self.consoleauth_rpcapi = consoleauth_rpcapi.ConsoleAuthAPI()
@@ -2117,6 +2124,9 @@ class API(base.Base):
 
         # cleanup volumes
         self._local_cleanup_bdm_volumes(bdms, instance, context)
+        # Cleanup allocations in Placement since we can't do it from the
+        # compute service.
+        self.placementclient.delete_allocation_for_instance(instance.uuid)
         cb(context, instance, bdms, local=True)
         sys_meta = instance.system_metadata
         instance.destroy()
diff --git a/nova/tests/functional/regressions/test_bug_1679750.py b/nova/tests/functional/regressions/test_bug_1679750.py
index b93ce5107c5c..7493c92f6994 100644
--- a/nova/tests/functional/regressions/test_bug_1679750.py
+++ b/nova/tests/functional/regressions/test_bug_1679750.py
@@ -10,6 +10,7 @@
 # License for the specific language governing permissions and limitations
 # under the License.
 
+from nova.scheduler.client import report as reportclient
 from nova import test
 from nova.tests import fixtures as nova_fixtures
 from nova.tests.functional import integrated_helpers
@@ -57,12 +58,87 @@ class TestLocalDeleteAllocations(test.TestCase,
         resp = self.placement_api.get(fmt % {'uuid': rp_uuid})
         return resp.body['usages']
 
-    def test_local_delete_removes_allocations(self):
+    # NOTE(mriedem): It would be preferable to use the PlacementFixture as
+    # a context manager but that causes some issues when trying to delete the
+    # server in test_local_delete_removes_allocations_after_compute_restart.
+    def _stub_compute_api_to_not_configure_placement(self):
+        """Prior to the compute API deleting allocations in the "local delete"
+        case, nova.conf for nova-api might not be configured for talking to
+        the placement service, so we can mock that behavior by stubbing out
+        the placement client in the compute API to no-op as if safe_connect
+        failed and returned None to the caller.
+        """
+        orig_delete_alloc = (
+            reportclient.SchedulerReportClient.delete_allocation_for_instance)
+        self.call_count = 0
+
+        def fake_delete_allocation_for_instance(*args, **kwargs):
+            # The first call will be from the API, so ignore that one and
+            # return None like the @safe_connect decorator would if nova-api
+            # wasn't configured to talk to placement.
+            if self.call_count:
+                orig_delete_alloc(*args, **kwargs)
+            else:
+                self.call_count += 1
+
+        self.stub_out('nova.scheduler.client.report.SchedulerReportClient.'
+                      'delete_allocation_for_instance',
+                      fake_delete_allocation_for_instance)
+
+    def test_local_delete_removes_allocations_after_compute_restart(self):
         """Tests that allocations are removed after a local delete.
 
         This tests the scenario where a server is local deleted (because the
         compute host is down) and we want to make sure that its allocations
-        have been cleaned up.
+        have been cleaned up once the nova-compute service restarts.
+        """
+        self._stub_compute_api_to_not_configure_placement()
+        # Get allocations, make sure they are 0.
+        resp = self.placement_api.get('/resource_providers')
+        rp_uuid = resp.body['resource_providers'][0]['uuid']
+        usages_before = self._get_usages(rp_uuid)
+        for usage in usages_before.values():
+            self.assertEqual(0, usage)
+
+        # Create a server.
+        server = self._build_minimal_create_server_request(self.api,
+            'local-delete-test', self.image_id, self.flavor_id, 'none')
+        server = self.admin_api.post_server({'server': server})
+        server = self._wait_for_state_change(self.api, server, 'ACTIVE')
+
+        # Assert usages are non zero now.
+        usages_during = self._get_usages(rp_uuid)
+        for usage in usages_during.values():
+            self.assertNotEqual(0, usage)
+
+        # Force-down compute to trigger local delete.
+        self.compute.stop()
+        compute_service_id = self.admin_api.get_services(
+            host=self.compute.host, binary='nova-compute')[0]['id']
+        self.admin_api.put_service(compute_service_id, {'forced_down': True})
+
+        # Delete the server (will be a local delete because compute is down).
+        self.api.delete_server(server['id'])
+
+        # Assert usages are still non-zero.
+        usages_during = self._get_usages(rp_uuid)
+        for usage in usages_during.values():
+            self.assertNotEqual(0, usage)
+
+        # Start the compute service again. Before it comes up, it will call the
+        # update_available_resource code in the ResourceTracker which is what
+        # "heals" the allocations for the deleted instance.
+        self.compute.start()
+
+        # Get the allocations again to check against the original.
+        usages_after = self._get_usages(rp_uuid)
+
+        # They should match.
+        self.assertEqual(usages_before, usages_after)
+
+    def test_local_delete_removes_allocations_from_api(self):
+        """Tests that the compute API deletes allocations when the compute
+        service on which the instance was running is down.
         """
         # Get allocations, make sure they are 0.
         resp = self.placement_api.get('/resource_providers')
@@ -91,12 +167,7 @@ class TestLocalDeleteAllocations(test.TestCase,
         # Delete the server (will be a local delete because compute is down).
         self.api.delete_server(server['id'])
 
-        # Start the compute service again. Before it comes up, it will call the
-        # update_available_resource code in the ResourceTracker which is what
-        # "heals" the allocations for the deleted instance.
-        self.compute.start()
-
-        # Get the allocations again to check against the original.
+        # Get the allocations again to make sure they were deleted.
         usages_after = self._get_usages(rp_uuid)
 
         # They should match.
diff --git a/nova/tests/functional/wsgi/test_services.py b/nova/tests/functional/wsgi/test_services.py
index 26860056de28..eb3902fa468c 100644
--- a/nova/tests/functional/wsgi/test_services.py
+++ b/nova/tests/functional/wsgi/test_services.py
@@ -86,12 +86,7 @@ class TestServicesAPI(test_servers.ProviderUsageBaseTestCase):
         self.assertEqual(409, ex.response.status_code)
 
         # Now delete the instance and wait for it to be gone.
-        # Note that we can't use self._delete_and_check_allocations here
-        # because of bug 1679750 where allocations are not deleted when
-        # an instance is deleted and the compute service it's running on
-        # is down.
-        self.api.delete_server(server['id'])
-        self._wait_until_deleted(server)
+        self._delete_and_check_allocations(server)
 
         # Now we can delete the service.
         self.admin_api.api_delete('/os-services/%s' % service['id'])
@@ -120,10 +115,3 @@ class TestServicesAPI(test_servers.ProviderUsageBaseTestCase):
         # in a 404 response.
         resp = self.placement_api.get('/resource_providers/%s' % rp_uuid)
         self.assertEqual(200, resp.status)
-        # Assert the allocations still exist for the server against the
-        # compute node resource provider. Once the bug is fixed, there should
-        # be no allocations for the server.
-        allocations = self._get_allocations_by_server_uuid(server['id'])
-        self.assertEqual(1, len(allocations))
-        allocation = allocations[rp_uuid]['resources']
-        self.assertFlavorMatchesAllocation(flavor, allocation)
diff --git a/releasenotes/notes/bug-1679750-local-delete-allocations-cb7bfbcb6c36b6a2.yaml b/releasenotes/notes/bug-1679750-local-delete-allocations-cb7bfbcb6c36b6a2.yaml
new file mode 100644
index 000000000000..178e810cba3a
--- /dev/null
+++ b/releasenotes/notes/bug-1679750-local-delete-allocations-cb7bfbcb6c36b6a2.yaml
@@ -0,0 +1,12 @@
+---
+upgrade:
+  - |
+    The ``nova-api`` service now requires the ``[placement]`` section to be
+    configured in nova.conf if you are using a separate config file just for
+    that service. This is because the ``nova-api`` service now needs to talk
+    to the placement service in order to delete resource provider allocations
+    when deleting an instance and the ``nova-compute`` service on which that
+    instance is running is down. This change is idempotent if
+    ``[placement]`` is not configured in ``nova-api`` but it will result in
+    new warnings in the logs until configured. See bug
+    https://bugs.launchpad.net/nova/+bug/1679750 for more details.