Average monthly cost for apartment dwellers expected to rise 12 percent, says Casden forecast LOS ANGELES - The Los Angeles region's apartment dwellers could face more rent hikes in coming months, with little relief in sight. Average monthly apartment rents in Los Angeles County, Orange County and the Inland Empire are expected to increase from 8 percent to 15 percent through the third quarter of 2004, according to the Casden Real Estate Economics Forecast released Feb. 6 by the USC Lusk Center for Real Estate. "Tenant incomes won't increase as fast as rents, so some may have to budget more for their rent payments," said Raphael Bostic, Ph.D., director of the Casden Forecast. "Apartment market conditions will remain extremely tight across the Los Angeles region well into 2004," Bostic said. Average monthly rents in Los Angeles County - the region's largest apartment market with 900,000 apartment units or nearly 71 percent of the total - will increase about 12 percent through mid-2004, according to the forecast. Rents in Orange County are expected to increase about 8 percent over the same period. The county accounts for about 225,000 units or 18 percent of the regional total. Rents in the Inland Empire - western Riverside and San Bernardino counties - are forecast to increase about 15 percent. It is the smallest of the three markets, with less than 150,000 units or about 11 percent of the total. The forecast analyzed data from M/PF Research. The Los Angeles region's strong population growth and relatively healthy economy are driving up demand for rental units, but apartment construction remains at low levels despite vacancy rates of less than 5 percent across most of the region. In Orange County, multifamily completions have fallen to about 2,500 units a quarter, or about half the rate of three years ago. In Los Angeles County, completions are running at 1,100 to 1,500 units a quarter, well below the number needed to meet demand. Completions in the Inland Empire for the past year have averaged around 1,500 units a quarter, a marked increase from previous years. High land prices, a lack of land for apartment construction, community resistance to multifamily development and a shortage of subsidies for affordable rental housing have limited the supply of new units coming on the market throughout the Los Angeles region.
February 18, 2003