Answering the question requires looking at what’s driving the demand. According to a study by Harvard’s Joint Center for Housing Studies, renter households in the United State increased from 34 million in 2005 to nearly 43 million in 2015. L.A. has a housing shortage of 82,000 units, which helped prompt Mayor Eric Garcetti’s goal to create 100,000 residential units by 2021, with approximately 46,000 of them priced at levels deemed “affordable” for low- or moderate-income individuals and families.
The projected number of units to be completed by 2021, however, is only about 60,000, according to a 2013 report from the City Planning department.
The current vacancy rate in the city is very low, near 3%. According to Richard Green of the USC Lusk Center for Real Estate, rents will continue to rise until we reach a 5% vacancy rate. This means people will pay more while a supply problem endures. The issue is particularly pronounced in Downtown, where apartment buildings fill up nearly as fast as they open.
So back to the question: Where are we in the cycle?
The demand is there, but I’m starting to see six factors that are converging at once.