Los Angeles Apartment Rents Remain Flat

In 2019, apartment rents in Los Angeles plateaued after several years of substantial growth. The trend continued through the end of the year with a modest .4% increase in apartment rents overall, according to research from Apartment List. While rents have stalled, average lease rates in Los Angeles for a two-bedroom apartment still exceed the national average at $1,759 per month compared to $1,192 per month.

“Year-over-year rent growth in L.A. is currently 0.4%, trailing the national average of 1.4% and representing a notable cool down in rent growth compared to recent years,” Christopher Salviati, housing economist at Apartment List, tells GlobeSt.com. “This cool down is likely attributable in large part to new construction. The number of new multi-family housing units permitted in the L.A. metro surpassed its pre-recession peak in 2015, and despite slowing down a bit since then, it has maintained a robust pace. As these units hit the market, the new supply helps to ease constraints on a tight housing market.”

In addition to the new supply coming to the market, California and Los Angeles specifically is suffering from an affordability crisis, which has driven many residents out of the state. “High housing costs throughout California have made the state less attractive to folks from other parts of the country,” says Salviati. “The state’s population growth has slowed to its lowest level in decades, and this loosening on the demand side is likely also contributing to lowered rent growth.”

Plateauing apartment rents was a widespread trend in 2019, and Salviati anticipates a similar growth pattern in 2020. “Rents in the city were pretty flat throughout the year, increasing modestly from December 2018 to September 2019, and then dipping slightly over the past few months, in line with seasonality in the market,” he says. “While it’s difficult to project an exact rate of growth, I expect that rents in L.A. will continue to grow at a modest pace [this year].”

Los Angeles wasn’t the only market in Southern California to see slowing rent growth. “Rent growth throughout the region has generally slowed over the past year,” says Salviati. “Most cities in the L.A. metro are experiencing fairly modest rent growth, though there are some hot spots. Anaheim saw rents grow by 2.6% over the past year, while year-over-year growth came in at 3.9% in Irvine and 4.1% in Santa Clarita. Moving beyond the L.A. metro, Riverside and San Diego both saw modest growth between 1% and 2%. San Francisco, meanwhile, had essentially flat rent growth, similar to L.A.”