At the event, Moussa Diop, an associate professor of real estate at the USC Sol Price School of Public Policy, pointed to data in USC Lusk’s latest multifamily forecast projecting that in two years, multifamily rents and vacancies are expected to rise in Los Angeles, Orange and Ventura counties, plus the Inland Empire.
Inland Empire leads Greater L.A. markets in rental growth
L.A., Ventura and Orange Counties each have tight, undersupplied multifamily rental markets. The Inland Empire, by comparison, is thriving, Diop and other experts at the event said.
As Southern California’s most affordable rental market, the Inland Empire posted average rents of $2,112 this year, about 10% below Los Angeles County and 25% below Orange County, with five years of strong 3.6% annual growth.
Vacancy in the IE is the highest in the region at 6.4%, but Diop said supply has dipped, which will cause vacancy to drop in the coming quarters as the extra supply is absorbed by demand.
“The current very high vacancy is not really something that's negative in any way,” Diop said. “That's what you expect with supply in a responsive market. You need to allow time for the additional supply to be absorbed, and then new development will take place.”
Rents in the Inland Empire are projected to climb 4.6% over the next two years to roughly $2,210. Its affordability advantage is narrowing, but Diop said the Inland Empire is expected to remain the most affordable market in the region.
L.A. County faces undersupply, stagnant rent growth
Kitty Wallace, a Colliers vice chair in Greater Los Angeles, also said the Inland Empire has been “on fire” with new rental projects. Orange County has begun to add more multifamily development to the market as well, but L.A. County isn’t keeping up.
Los Angeles County’s rental market is “chronically undersupplied,” Diop said, with years of sluggish construction leaving vacancy stuck near 5% despite a recent increase in new construction.
The county shows one of the slowest rent growths in the region, which the forecast credited to high luxury-segment vacancy offsetting the average while tight conditions persist in more affordable units.
The average rent in L.A. County rose 0.5% this year to $2,336 as the county’s rental inventory grew by 1%. Vacancy was nearly 5.4% in the county in October 2025.
By October 2027, vacancy is forecast at 5.17% in L.A. County with rents averaging $2,350.
Rent growth is expected to remain nearly flat at 0.6% over the next two years, USC’s report found, below gains in every other Southern California market. Without sustained development of both market-rate and affordable housing, Los Angeles will continue to lag the region in renter relief and investor confidence.
“Los Angeles is one of the most expensive cities in the country, but because of policy, our rents have stayed relatively stagnant,” Wallace said on a panel.
Multifamily markets to see continued undersupply and need for affordability
In 2026 and 2027, researchers behind the forecast predict continued slowly rising rents and a low supply of new housing across the region.
For affordable housing, researchers noted that building consistent affordable housing will likely take “sustained effort lasting a decade or more.”
Financing projects, affordable and beyond, is a main challenge in Southern California. Diop said three obstacles to multifamily financing are a stock market bubble fueled by AI investment, rising federal debt and elevated interest rates.
He said these are issues that can be found nationally.
“To cover the shortfall nationally, we will need to increase supply by close to 25% to 30% annually. It's not going to happen,” Diop said. “We don't know how to build housing that fast. We need to understand that this is all about regulations. We have regulated our cities and ourselves into this crisis, and the only way to solve this is by changing those regulations.”