Inland Empire Rents Growing More Than Other LA-Area Counties

As municipalities across Greater Los Angeles work to meet their housing goals, the Inland Empire is in a notably healthier position for growth.

While Los Angeles, Ventura and Orange counties deal with undersupplied multifamily rental markets, the I.E. is thriving by comparison, L.A. Business First reported, citing real estate experts at this month’s Casden Multifamily Forecast and Conference held by the University of Southern California Lusk Center for Real Estate.

Over the next two years, multifamily rents and vacancies are expected to rise across the region. Average rents in the I.E. are expected to climb 4.6 percent in that same period. Still, they will remain the most affordable market in the region, according to Moussa Diop, an associate professor of real estate at the USC Sol Price School of Public Policy.

This year, monthly rents in the Inland Empire averaged $2,112, approximately 10 percent lower than Los Angeles County’s average and 25 percent below Orange County’s. The I.E., consisting of Riverside and San Bernardino counties, has seen about 3.6 percent annual growth in rent over the past five years. Vacancy in the I.E. is the highest in the region at 6.4 percent, though it’s predicted to fall in the coming quarters as demand gobbles up the housing supply.

“The current very high vacancy is not really something that’s negative in any way,” Diop said. “That’s what you expect with supply in a responsive market. You need to allow time for the additional supply to be absorbed, and then new development will take place.”

Los Angeles County’s rental market is “chronically undersupplied,” according to Diop, as years of floundering construction leaves vacancy hovering around 5 percent despite a recent increase in new construction. Average rent in L.A. County rose 0.5 percent to $2,336 per month as rental inventory across the county grew by 1 percent. As of October, the vacancy rate was approximately 5.4 percent. By October 2027, vacancy is expected to fall slightly to 5.2 percent with rents averaging $2,350 a month. Rents will only grow by 0.6 percent over the next two years.

Financing for new projects remains the largest hurdle for many developers in Southern California to overcome. Diop credited increasing federal debt, elevated interest rates and a stock market bubble fueled by artificial intelligence investment as key obstacles to getting shovels in dirt. These issues plague cities across the country.

“To cover the shortfall nationally, we will need to increase supply by close to 25 percent to 30 percent annually. It’s not going to happen,” Diop said. “We don’t know how to build housing that fast. We need to understand that this is all about regulations. We have regulated our cities and ourselves into this crisis, and the only way to solve this is by changing those regulations.”

— Chris Malone Méndez