UPDATE: The apartment market in Los Angeles is experiencing a severe downturn as new reports confirm that construction is falling to a 10-year low. With fewer than 19,000 apartments currently under construction, the city faces an urgent housing crisis that is hitting renters hard.
In stark contrast, Riverside County is witnessing a construction boom, boasting a staggering 154.1% year-to-year increase in apartment completions, according to data from Rentcafe. The demand for new housing in Los Angeles, however, is far from being met, creating a challenging environment for anyone searching for an apartment.
As rental rates soar—averaging between $4,000 and $5,000 per month—many potential renters are being pushed out of the market. Experts indicate that to afford a $4,000 monthly rent, a household would need a gross monthly income of around $13,400.
According to CoStar, the vacancy rate in L.A. is among the lowest in the nation, yet the construction of new units has been declining each quarter since early last year. Developers are now facing insurmountable challenges, with rising prices for construction materials due to tariffs significantly impacting project feasibility.
“L.A. has been redlined by the majority of the investment community,”
said Ari Kahan of California Landmark Group, emphasizing the difficulty in securing funding for new developments. The uncertainty surrounding profit margins has deterred major investors like pension funds and insurance companies from backing projects in the city.
Additionally, the construction industry is grappling with labor shortages, particularly among immigrant workers, who make up about 61% of California’s construction workforce. A June report indicated that 26% of those workers are undocumented, further complicating the labor landscape in the state.
The decline in housing production is not new; it has been ongoing for decades, dropping from over 70,000 new units annually in the 1950s to fewer than 15,000 in the 2010s. This long-term trend has resulted in an aging housing stock and a critical shortage of affordable options for residents.
As developers predict longer commutes and more people forced to move farther from urban centers, the urgency for solutions to the housing crisis in Los Angeles becomes increasingly apparent. The city’s residents are left wondering when they might see any relief in the rental market.
Stay tuned for further updates on this developing story as officials and industry experts respond to the ongoing housing challenges in Los Angeles.
