Be Prepared to Pay $100 More for Rent in L.A.
Sorry to break it to you, but rents are continuing to rise in Los Angeles.
A new report by apartment listings site Zumper says median rent for a one-bedroom place in L.A. — $1,970 — is up nearly 14 percent compared with the same time last year.
And it's not going to get better. Not if you believe the 2016 USC Casden Multifamily Forecast, released this morning. We do.
It says Los Angeles renters can expect to pay an average of $109 more each month by 2018 than they do today.
"Despite construction permits being issued for more than 38,000 new units across the four regional markets [Los Angeles, San Diego, Orange County and the Inland Empire] in 2015 — the highest since before the recession — vacancy rates are projected to continue their gradual decline through 2018," a summary of the research says.
The USC academics put some blame on California law, arguing that environmental loopholes (California Environmental Quality Act) and tax giveaways to landowners (Proposition 13) have made housing precious.
The result, they say, is that the state's home prices are twice the national average.
"California is home to 13 percent of the nation’s population but only 8 percent of residential building permits," USC says. "Over the last two years, California has added more than four new people for each new residential building."
The researchers also argue that the development we do see in L.A. targets high-income renters, which does little to provide immediate relief.
The forecast says demand will continue to be high, and the vacancy rate (USC pegs it at 4.2 percent) will continue to be low.
"The county saw significant population growth and was home to one-fifth of the state’s new jobs, which pushed more millennials into the rental market," the university says. "While new inventory will combine with increased demand to keep vacancy rates near their current levels, rents will continue to soar."
"Though multifamily construction permits are back to pre-recession levels and have provided some relief, population and employment growth are driving up demand faster than new inventory can hit the market. For renters, new construction has simply kept a bad situation from getting drastically worse,” said Raphael Bostic, interim director of the USC Lusk Center for Real Estate.
In conclusion, come to Los Angeles and follow those Hollywood dreams. Just don't say we didn't warn you.
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