by Jodi Summers
Expect the average rent on an apartment in much of Southern California will rise by at least $100 over the next two years, concludes the USC Casden Multifamily Forecast, released by USC’s Lusk Center for Real Estate.
Beacon Economics prepared the report for USC, analyzing rents, housing supply and population growth in Los Angeles, Orange, San Bernardino, Riverside and San Diego counties.
L.A. County rents rose nearly 5% to $1,307 last year from 2014, a pace that will slow to 3.1% this year, 2.4% in 2017 and 2.5% in 2018, when the average rent in Los Angeles County is expected to hit $1,416 a month. This is a total rise of 8.3% from 2015. Orange County, average rents are predicted to climb 9.4% to an average of $1,736. In San Diego County, average monthly rents should increase to $1,577 in 2018, up 10.9% from last year, and in Riverside and San Bernardino counties they’ll grow 7.3% to $1,239 a month.
Last year, a report released by the California Housing Partnership Corp. said Los Angeles County needed more than 500,000 additional below-market rental homes if low-income residents were not to live beyond their means or in overcrowded apartments.
“Population and employment growth are driving up demand faster than new inventory can hit the market,” said Raphael Bostic, interim director of the USC Lusk Center for Real Estate.
Here’s where rents are at now:
Permits for more than 38,000 multifamily units were pulled last year across Los Angeles, Orange, San Bernardino, Riverside and San Diego counties, but much of the new supply is on the pricey end, and economists say much more construction is needed because California has consistently built too few units relative to population growth.