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
Codes and Standards | Jul 29, 2022
Few projects and properties are being built beyond code
Clients and architects disagree on how well building to code provides resilience, according to a recent report by the American Institute of Architects (AIA) in partnership with Owens Corning.
Headquarters | Jul 29, 2022
Nike HQ’s newest, largest structure: the Serena Williams Building
In Beaverton, Ore., the new Serena Williams Building, at just over 1 million square feet, is the largest structure at Nike World Headquarters.
| Jul 28, 2022
Fanning Howey hires Dennis Bane, AIA, as Project Executive
Fanning Howey, an architecture, interiors and engineering firm specializing in learning environments, has hired Dennis Bane, AIA, ALEP, to serve as a Project Executive for the firm’s Indianapolis office.
Multifamily Housing | Jul 28, 2022
GM working to make EV charging accessible to multifamily residents
General Motors, envisioning a future where electric vehicles will be commonplace, is working to boost charging infrastructure for those who live in multifamily residences.
Urban Planning | Jul 28, 2022
A former military base becomes a substation with public amenities
On the site of a former military base in the Hunters Point neighborhood of San Francisco, a new three-story substation will house critical electrical infrastructure to replace an existing substation across the street.
Hotel Facilities | Jul 28, 2022
As travel returns, U.S. hotel construction pipeline growth follows
According to the recently released United States Construction Pipeline Trend Report from Lodging Econometrics (LE), the total U.S. construction pipeline stands at 5,220 projects/621,268 rooms at the close of 2022’s second quarter, up 9% Year-Over-Year (YOY) by projects and 4% YOY by rooms.
Codes and Standards | Jul 27, 2022
Biden administration proposes drastic flood insurance reform
The Biden administration’s proposed major overhaul to the National Flood Insurance Program, or NFIP, would drastically alter how Americans protect homes and businesses against flooding.
Concrete | Jul 26, 2022
Consortium to set standards and create markets for low-carbon concrete
A consortium of construction firms, property developers, and building engineers have pledged to drive down the carbon emissions of concrete.
Green | Jul 26, 2022
Climate tech startup BlocPower looks to electrify, decarbonize the nation's buildings
The New York-based climate technology company electrifies and decarbonizes buildings—more than 1,200 of them so far.
Education Facilities | Jul 26, 2022
Malibu High School gets a new building that balances environment with education
In Malibu, Calif., a city known for beaches, surf, and sun, HMC Architects wanted to give Malibu High School a new building that harmonizes environment and education.