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
Multifamily Housing | Jul 31, 2019
100% affordable housing development features 62-units for low-income households
Magnusson Architecture + Planning is designing the project.
Multifamily Housing | Jul 24, 2019
Multifamily transformation: Historic mansion converted to short-term housing for homeless families
The 1885 Victorian home in Cambridge, Mass., gets a new, energy-efficient life as Renae's Place, short-term housing for homeless women and their children.
Multifamily Housing | Jul 23, 2019
Is prefab in your future?
The most important benefit of offsite construction, when done right, is reliability.
Multifamily Housing | Jul 17, 2019
What multifamily developers are saying about Ori Living's robotic interior system
This robotically controlled, space-saving furniture system can add more than 100 square feet of usable space to apartment units.
Multifamily Housing | Jul 17, 2019
Robotic interiors: How to make a studio apartment feel as big as a one-bedroom unit
Meet Ori Living's robotically controlled, space-saving furniture system.
Multifamily Housing | Jul 17, 2019
Cost of living: Apartment construction costs for 2019
Using RSMeans data from Gordian, here are the most recent construction costs for low-rise and mid-rise apartment buildings across 10 U.S. cities.
Multifamily Housing | Jul 15, 2019
Call for entries: Student housing roundup
We're looking for the best new "student housing" communities for our Fall Issue of Multifamily Design+Construction.
Multifamily Housing | Jul 15, 2019
7 new multifamily developments to track this summer
Ballpark living in Anaheim, Calif., and a water-friendly apartment complex in Seattle highlight the noteworthy multifamily developments to open in 2019.
Multifamily Housing | Jun 27, 2019
David Baker Architects wins 2019 HUD 'best in affordable housing' honor
The firm's Williams Terrace project is the first dedicated housing for Charleston, S.C.’s low-income seniors. It's one of four developments to win 2019 AIA/HUD housing awards.
Building Tech | Jun 26, 2019
Modular construction can deliver projects 50% faster
Modular construction can deliver projects 20% to 50% faster than traditional methods and drastically reshape how buildings are delivered, according to a new report from McKinsey & Co.