Business & Economy

More apartments coming in 2016, but rents expected to rise

Rents in LA County are projected to rise 8 percent between 2014 and 2016, according to USC researchers.
Rents in LA County are projected to rise 8 percent between 2014 and 2016, according to USC researchers.
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Thousands of new apartments are expected to come online in the tight Los Angeles rental market next year, but rents are still expected to rise.

Researchers at USC have predicted that rents will climb more than 8 percent in Los Angeles County between 2014 and mid-2016.

In Los Angeles alone, rents jumped 12 percent in 2015, according to the apartment search site Zumper. Vacancy rates hovered around 3 percent.

"Part of that is because we just need more housing in LA,"  said Jim Clarke, who represents landlords for the Apartment Association of Greater Los Angeles.

That Los Angeles will be getting. The city has approved $7 billion in construction in the past year, the most building activity Los Angeles has seen in about three decades.

This year alone, builders brought 5,700 rentals to market, concentrated downtown and in the San Fernando Valley, according to a report by the real estate firm Marcus & Millichap.

The question is how many units will be affordably-priced. Los Angeles has been called the most unaffordable major housing market in the country because of the gap between housing costs and wages. A new Harvard report found that 59 percent of people in metropolitan LA are spending too much of their paycheck on rent — 30 percent or more.

Heather M. O'Brien, an artist and founding member of the Los Angeles Tenants Union, estimates she devotes about half of her income to rent. Still, she has not seen the rent hikes other members have because she lives in a rent-regulated apartment.

"They're seeing increases to the point where they're forced to move or share a room," O'Brien said. "There's a lot of stress right now."

There's one, albeit small, consolation for renters in Los Angeles: Compared to other cities, it doesn’t have the highest rents. That’d be San Francisco, New York, Boston, Oakland. L.A. is down the list at number 8, according to Zumper.

O'Brien said the union is hoping to control rents in Los Angeles by advocating for that the city's rent-stabilization law apply to more units than those built before 1978.  She said that makes more sense than hoping new construction will bring down rents. "Affordable housing" units being built are still out of reach for many members of the tenants union, she said.

"There's a very clear feeling within the tenants union that building our way out of housing crisis is not the way to go," O'Brien said.