In its latest Supply and Demand Outlook for the Los Angeles Apartment Market, the real estate brokerage and research firm Marcus & Millichap stated that L.A. “is in the midst of the largest housing boom in decades, as developers rush to complete projects in the county.”
Last year, 10,200 rental apartments came online in Los Angeles, and another 8,500 could be added in 2015.
That construction activity should be good news for Los Angeles’ overall economy, if history repeats itself. Research commissioned by the National Multifamily Housing Council and the National Apartment Association finds that apartment construction, operations, and resident spending contributed $63.1 billion and supported more than 534,900 jobs in the Greater Los Angeles area in 2013.
Those findings were released earlier this week by the Apartment Association of Greater Los Angeles, which represents 20,000 building owners and managers in Southern California.
In 2013, Los Angeles had 3,039,590 million people—23% of its population—living in 1,272,968 occupied rental homes and apartments. Thirty eight percent of those apartments are one-person households.
In 2013, Los Angeles had 3,039,590 million people—23% of its population—living in 1,272,968 occupied rental homes and apartments. Thirty eight percent of those apartments are one-person households. Apartment residents wielded $23.4 billion in spending power.
The study reports that two-thirds of the building permits issued in Los Angeles County were for multifamily. And it breaks down the economic contribution of apartment construction ($5 billion, or more than any other metro area in the country), operations ($11 billion), and rents ($47.1 billion).
Marcus & Millichap, though, raises some red flags about whether this economic bounty will continue. It notes that anticipated upward pressure on interest rates could temper investors’ enthusiasm for the apartment sector, further dissipating the buyer pool.
The research firm also notes that recent weakness in absorptions and rent growth—the latter of which increased by 4.4% in 2014 and is expected to rise by 5.2% this year to an average of $1,842 per month—might also make investors think twice about projects still on the drawing board.
Related Stories
| Oct 22, 2019
Ben Seager, AIA, Named KTGY’s New 75+ Service-Enriched National Practice Area Leader
Ben Seager, AIA, Named KTGY’s New 75+ Service-Enriched National Practice Area Leader
Multifamily Housing | Oct 17, 2019
Development enlivens a city on Texas’ Gulf Coast
Three mixed-use communities in Port Aransas are expanding.
Multifamily Housing | Oct 16, 2019
Covenant House New York will support the city’s homeless youth
FXCollaborative designed the building.
Multifamily Housing | Oct 16, 2019
A new study wonders how many retiring adults will be able to afford housing
Harvard’s Joint Center for Housing Studies focuses on growing income disparities among people 50 or older.
Multifamily Housing | Oct 14, 2019
Eleven, Minneapolis’ tallest condo tower, breaks ground
RAMSA designed the project.
| Oct 11, 2019
Tips on planning for video surveillance cameras for apartment and condominium projects
“Cameras can be part of a security program, but they’re not the security solution itself.” That’s the first thing to understand about video surveillance systems for apartment and condominium projects, according to veteran security consultant Michael Silva, CPP.
Multifamily Housing | Oct 9, 2019
Multifamily developers vs. Peloton: Round 2... Fight!
Readers and experts offer alternatives to Peloton bicycles for their apartment and condo projects.
Multifamily Housing | Oct 7, 2019
Plant Prefab and Brooks + Scarpa design scalable, multifamily kit-of-parts
It is Plant Prefab’s first multifamily system.
Multifamily Housing | Oct 3, 2019
50 Penn breaks ground in New York, will provide 218 units of affordable housing
Dattner Architects is designed the project.