Los Angeles Apartment Occupancy Falls Below 94 Percent

Apartment occupancy in Los Angeles County has fallen to a level not seen in several years.

In the first quarter, multifamily occupancy dropped to 93.9 percent, L.A. Business First reported, citing a quarterly market report from Colliers. The rate has not fallen below 95 percent in years, Colliers Vice Chair Kitty Wallace told the publication.

“The rental market has been slightly soft,” Wallace told L.A. Business First. “We have a slight uptick in our deliverables, but when we get midway through 2027, there’s not much else that’s being built.”

The uptick in vacancy could be attributed to low construction, workforce impacts and global uncertainty, Wallace told Business First. In Los Angeles County in the first quarter, developers delivered about 3,000 new apartments — a slight year-over-year decrease from 3,200 new units delivered in the first quarter of last year, per Colliers.

As it stands, there are roughly 24,000 units under construction, but development delays are drawing out completion timelines, according to Wallace. Nearly one-third of projects in the pipeline, or 6,740 units, are slated to be affordable housing that would rise under Executive Directive 1, which streamlines approvals and expedites the bureaucratic process for 100 percent affordable developments.

Developers are increasingly opting to build affordable housing instead of market-rate as it presents a more valuable return on investment as construction costs rise and rents remain relatively flat. Rents in Los Angeles County fell to a four-year low in the first quarter, with the median monthly rent in the metro dropping to $2,167, according to Apartment List. In the same four-year period, rents in Orange, Ventura and San Bernardino Counties either rose or remained flat.

Simultaneously, developers are abandoning plans for some multifamily projects in favor of condominiums and other for-sale developments.

“[We’re] seeing a good chunk of things that were entitled for a high-rise or apartments that are now becoming for-sale housing. It’s less expensive to build,” Wallace said. “We still have a shortage of housing, even though our occupancy rate is just under 94 percent overall. We’re still missing housing units, so you need to get them built.”

As part of its state-mandated housing goals, the City of Los Angeles must entitle 456,643 new housing units, including 184,721 affordable residences, by the end of the decade.

— Chris Malone Méndez