Southern California apartment rents will keep climbing, report predicts

Friday, 13 October 2017, 05:28:08 PM. Southern California apartment rents are expected to keep climbing over the next two years, as employers continue to add jobs in the region, a USC forecast released Wednesday shows.

Southern California apartment rents are expected to get even pricier over the next two years, as demand increases along with job growth, a report released Wednesday said.

In Los Angeles County, average rents in 2018 are forecast to hit $2,304, up 3% from the previous year. In 2019, rents are expected to climb another 3%, to $2,373, according to the annual USC Casden Real Estate Economics Forecast.

Similar increases are expected in Orange County, where the average rent is expected to rise to $2,157 in 2019.

In San Diego County, average rents in 2018 are expected to hit $1,984 a month, a 3% increase from this year. In 2019, rent should climb another 3.2% to $2,048, according to the forecast.

So far this year, rent growth has actually slowed in both counties. Averages in the second quarter rose 1% over the previous year, compared with the 6% and 5% increases seen in 2016.

Richard Green, director of the USC Lusk Center for Real Estate, said that slowdown probably reflects a flood of new apartment buildings that have opened. But he doesn't expect the trend to continue.

“We think incomes are going to keep rising and we are not going to build enough,” he said.

The forecast comes amid increased concerns over the cost of housing in California. Economists say sky-high rents and home prices are one reason the state’s economy has slowed this year.

“The high cost of housing is a huge challenge for employers attempting to recruit out-of-state talent,” said Chris Thornberg, founding partner of Beacon Economics, which coauthored the report along with the Lusk Center.

Many residents already are struggling to get by, a fact that’s pushing some tenant groups to lobby cities for new or more robust rent-control ordinances. Economists generally agree that the root cause of California’s affordability crisis is that for decades too few homes have been built relative to population and job growth.

In 2015, 31% of renters in Los Angeles and Orange counties spent more than half of their income on housing costs, according to the latest study from Harvard University’s Joint Center for Housing Studies.

The large millennial generation was singled out in the USC report as one key reason rents will rise over the next two years.

"With more millennials entering their late twenties and early thirties, demand for multifamily property should be particularly strong," the report said.

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Drone footage reveals the devastation wrought by the deadly Tubbs fire in Santa Rosa. An astounding number of women have shared stories of alleged sexual misconduct by producer Harvey Weinstein. A USC administrator has left his post in the wake of allegations that he sexually harassed female colleagues. President Trump has nominated Kirstjen Nielsen, a top aide to Chief of Staff John F. Kelly, to head the Department of Homeland Security.

Credits: Associated Press, Travis Geske, Getty, KTLA

Drone footage reveals the devastation wrought by the deadly Tubbs fire in Santa Rosa. An astounding number of women have shared stories of alleged sexual misconduct by producer Harvey Weinstein. A USC administrator has left his post in the wake of allegations that he sexually harassed female colleagues. President Trump has nominated Kirstjen Nielsen, a top aide to Chief of Staff John F. Kelly, to head the Department of Homeland Security.

Credits: Associated Press, Travis Geske, Getty, KTLA

southern-california-apartment-rents-will-keep-climbing-report-predicts photo 2 CAPTION

Drone footage reveals the devastation wrought by the deadly Tubbs fire in Santa Rosa. An astounding number of women have shared stories of alleged sexual misconduct by producer Harvey Weinstein. A USC administrator has left his post in the wake of allegations that he sexually harassed female colleagues. President Trump has nominated Kirstjen Nielsen, a top aide to Chief of Staff John F. Kelly, to head the Department of Homeland Security.

Credits: Associated Press, Travis Geske, Getty, KTLA

Drone footage reveals the devastation wrought by the deadly Tubbs fire in Santa Rosa. An astounding number of women have shared stories of alleged sexual misconduct by producer Harvey Weinstein. A USC administrator has left his post in the wake of allegations that he sexually harassed female colleagues. President Trump has nominated Kirstjen Nielsen, a top aide to Chief of Staff John F. Kelly, to head the Department of Homeland Security.

Credits: Associated Press, Travis Geske, Getty, KTLA

southern-california-apartment-rents-will-keep-climbing-report-predicts photo 3 CAPTION

Over 160,000 acres have been destroyed in northern California fires.

Over 160,000 acres have been destroyed in northern California fires.

southern-california-apartment-rents-will-keep-climbing-report-predicts photo 4 CAPTION

The death toll from the Northern California fires has reached 17. A wounded Mandalay Bay security guard warned hotel officials about a gunman before the Las Vegas massacre. Harvey Weinstein is facing more sexual assault and harassment allegations. The FBI’s investigation into bribery and corruption in college basketball continues to expand. 

The death toll from the Northern California fires has reached 17. A wounded Mandalay Bay security guard warned hotel officials about a gunman before the Las Vegas massacre. Harvey Weinstein is facing more sexual assault and harassment allegations. The FBI’s investigation into bribery and corruption in college basketball continues to expand. 

southern-california-apartment-rents-will-keep-climbing-report-predicts photo 5 CAPTION

A Northern California firestorm is one of the worst in state history, officials say. The Dodgers are heading to the NLCS after beating the Diamondbacks Monday night. Police have dramatically changed their account of how the Las Vegas massacre began. The Los Angeles Times has named a new editor in chief. 

A Northern California firestorm is one of the worst in state history, officials say. The Dodgers are heading to the NLCS after beating the Diamondbacks Monday night. Police have dramatically changed their account of how the Las Vegas massacre began. The Los Angeles Times has named a new editor in chief. 

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A wind-fed wildfire surged over the Anaheim Hills on Monday, burning several homes and forcing thousands to evacuate as fire crews struggled to battle the rapidly growing blaze.

A wind-fed wildfire surged over the Anaheim Hills on Monday, burning several homes and forcing thousands to evacuate as fire crews struggled to battle the rapidly growing blaze.

andrew.khouri@latimes.com

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