Rent in Los Angeles has risen over 65 percent over the last decade, nearly double the national average, according to a new study.
The study, by RentCare, found that the average rent in Los Angeles has jumped 65 percent to $2,527 since 2010.
The study relied on a number of demographic indicators supplied by the U.S. Census Bureau, Yardi Matrix, PropertyShark, and the U.S. News & World Report, to get an overview of the housing trends over the past decade.
New rent control laws that go into effect on Jan. 1 in California may curb the frenzied pace of rental increases.
The data shows that the average rent in Los Angeles rose nearly twice as much as the national average – 36 percent – over the same period.
Rents in the neighborhood of Westwood, at $4,944 a month, are the highest in California.
Renters in L.A. make up roughly 60 percent of the city’s population. That gives L.A. the 19th highest rate among the country’s 260 biggest cities. Roughly 98,000 apartment units were built in L.A. over the past decade, which puts it at the fifth most in the nation.
The demand for renting is expected to remain bullish in L.A.
Developers are taking advantage of a city program that allows for “density bonuses and other incentives” as part of the city’s Transit Oriented Communities program, which provides incentives that encourage market-rate developers to include affordable units in projects located near transit hubs.
The program aims to streamline the development process and incentivize affordable housing development by implementing a section of Measure JJJ, which was passed by L.A. voters in Nov. 2016.
The skyrocketing rent increases in L.A. and California haven’t gone unnoticed by lawmakers.
On Oct. 8, Gov. Gavin Newsom signed into law Assembly Bill 1482, which sets rent caps and implements “just cause” eviction rules, making California the third state in the nation to pass such legislation.
The law, which goes into effect Jan. 1, will cap annual rental increases for multifamily properties to 5 percent plus the consumer price index (estimated at up to 3.5 percent). It’s aimed at halting rent gouging by landlords who were raising rent prices to an average of $2,320 per month amid growing demand, according to a Marcus & Millichap report over the summer. Another key provision in the law is 15-year exemptions for annual rental increases for new multifamily buildings.
Investors across the country are sounding similar alarms in the wake of major rent reform across the U.S. [Los Angeles Times] — Pat Maio