Southern California tenants will get only modest relief from rent hikes in the next two years while finding an empty rental unit will only get harder, one outlook predicts.
The average dweller in a multifamily complex in the region covered by the Southern California News Group will see rent hikes that average between 2.6% and 3.3% annually over the next two years, says the University of Southern California Casden Economics Forecast. Rents hikes have averaged 4%-plus for much of the decade.
Casden projects fewer than 4% of local rental units will be vacant. That tightness allows landlords to increase rents because new apartment construction trails the region’s hiring pace. And the only relief is coming from an outflow of local residents to locales with cheaper costs of living.
“Rents are continuing to rise, and at a slower pace. And rents in the past year rose a little bit less than renter incomes,” said Richard Green, director of the USC Lusk Center for Real Estate. “Still, an ongoing lack of affordability is causing skilled workers to flee the region and seek employment and housing elsewhere.”
Here’s a look at the forecast for the region …
Los Angeles County: Rent hikes should average 3.1% a year to $2,369 in 2021. Between 2011 and 2019, rent rose at a 4.4% annualized rate. Vacancies? Up 0.1 percentage point in two years to 3.5%.
Casden: “The only market with more renters than homeowners, apartment dwellers pay the highest rent despite having lower income than San Diego, Ventura and Orange counties. Despite the region’s highest pace of multifamily construction, vacancy rates will remain virtually unchanged and average rent will climb.”
The burden: 53% of L.A. households spend 30%-plus of $47,370 median income on rent.
Orange County: Rising 2.6% a year to $2,199. In 2011-19, rents rose at a 4% annualized rate. Vacancy: down 0.5 percentage points to 3.3%.
Casden: “With a significant reduction in new multifamily construction compared to earlier in the decade, the region’s second-most expensive multifamily market will experience a combination of rent increases and fewer vacancies in the next few years.”
The burden: 55% of O.C. households spend 30%-plus of $59,865 median income on rent.
Inland Empire: Rents are projected to rise 3.3% a year to $1,600. In 2011-19, rents rose at a 4% annualized rate. Vacancy: down 0.4 percentage points to 3.1%.
Casden: “The region’s most affordable multifamily market also experienced the fastest increase in housing costs. Rents are expected to grow and while vacancies decrease over the next two years.”
The burden: 50% of I.E. households spend 30%-plus of $42,186 median income on rent.
