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Are We Actually Reaching a Housing Equilibrium?

There is a lot of talk about the affordability crisis in Los Angeles, but rent growth and migration are slowing while vacancy rates stabilize. Why?

By Kelsi Maree Borland | Updated on November 06, 2017

Richard Green Richard Green

The extreme multifamily rent growth in Los Angeles is beginning to slow, and while rent growth is still substantial, we couldn’t help but wonder how the deceleration of growth is impacting vacancy rates. It stands to reason—especially considering that L.A. has been pegged as a city with a severe housing shortage—that vacancy rates would decline in response. We asked Richard Green, director of the USC Luck Center, how the slowed rental rate growth is expected to impact vacancy rates, and he pondered the idea that we may be hitting a supply equilibrium.

“It is like we are getting an equilibrium, which is to say that neither vacancy rates nor rents will move that much,” Green tells GlobeSt.com. “It confuses me a little bit because we are still not building all that much, especially relative to where we expect demand to be. It could be that there is not as much demand as we thought there was going to be.”

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