According to a fresh study by real estate company Marcus & Millichap, over 10,000 new flats have been built in the last year in Los Angeles County.
This amount, which contains units built between July 2016 and June 2017, reflects a substantial rise of 61 percent over the previous year and is the largest amount of flats built over the five-year period studied in the study.
The big quantity of rental building over the past year is likely not a fluke across the region; building is now ongoing on projects aimed at bringing an extra 27,358 flats to the LA area.
Will the supply inflow do anything to make rising rents fall? Unfortunately, this is likely not going to happen.
The study states that the LA region vacancy rate is sufficiently low—around 3.3 percent—that the freshly built units, together with those under development, are unlikely to have a regional impact. According to Marcus & Millichap, the small vacancy rate, “coupled with continuous demand,” will cause rents to continue to rise “by twice the pace of inflation.” More than half of the 10,649 units constructed over the previous year are in what the writers of the study describe as the larger Downtown LA region, which encompasses quickly growing neighbourhoods such as Koreatown and Westlake, in relation to the neighbourhoods.
In the San Fernando Valley, where the region is being affected by a number of significant innovations, 1,510 units have been built. The amount was 1,755 in the South Bay.
Development does not boom everywhere, of course. On the Westside, last year, only 701 apartments were built— more than one-third of which were in one building: the new luxury tower Ten Thousand in Century City, where rents start at $9,600 a month.
