Apartment dwellers will
continue to get squeezed financially as rents are expected to increase up to
8 percent over the next two years across Southern California as vacancies
shrink, according to a USC forecast released Tuesday.
Southern California's strong economy,
increasing population and shortage of new product will keep exerting upward
pressure on rents, said the Casden Real Estate Economics Forecast prepared
by the University of Southern California Lusk Center for Real Estate.
It focused on Los Angeles and Orange
counties and the Inland Empire.
Researchers found that last year, monthly
rents averaged $1,300 in Los Angeles County, $1,260 in Orange County and
$900 in the Inland Empire, which consists of Riverside and San Bernardino
counties.
Raphael Bostic, the forecast's director,
said that young singles coming into the region want less expensive
efficiency units while larger immigrant families favor three-bedroom
apartments.
"I think people know what the
solution is. We have to add more units," he said.
Bostic notes that cities need to be more
aggressive about allowing higher density projects in urban areas, but
neighbors often reject this approach.
While apartment construction is on the
upswing, it remains well below the levels of the booming 1980s. For example,
in 1986 builders pulled permits for 52,969 units in Los Angeles County. Last
year they pulled permits for 11,096 units.
Not surprisingly, vacancy rates are at
about 4 percent in both Los Angeles County and the Inland Empire and are not
expected to move up.
"At 4 percent that falls well within
most (building owners) level of saying it's at full occupancy," Bostic
said.
Here's the forecast breakdown:
- In the big Los Angeles County market,
rents are expected to increase slightly less than 6 percent this year
then jump 7 percent in 2005, when average rents will be $1,400 a month.
Submarkets with significant populations of immigrants and lower-income
renters such as East Los Angeles, the San Gabriel Valley, Long Beach and
Central Los Angeles will see higher occupancy and strong rent growth
through 2005.
- As has been the case for the past five
years, the economies of Riverside and San Bernardino counties will
outperform Los Angeles and Orange County. That will help push Inland
Empire rents up by as much as 8.5 percent in the next two years, the
forecast said.
- The Orange County apartment market
will also continue growing, with the occupancy rate hitting 97 percent
by the end of next year. Rents are expected to increase by 6 percent
this year and by 9 percent next year, one of the biggest gains in the
nation.
The lack of affordable housing has become
a hot issue with advocates for the poor, as well as state and local elected
officials.
On Tuesday, advocates for the poor held a
news conference in Pacoima to call on the city of Los Angeles to increase
access to affordable housing for low-income families.
At issue was a family of six who were
evicted Friday from a backyard trailer with a substandard sewage system. The
family, including the father who is a farm laborer, was rendered homeless.
"We want to do something, we want
the City Council to pass a new law, with inclusionary zoning, to construct a
(sufficient) amount of low-income houses," said Guadelupe Gonzalez, a
tenant advocate for ACORN, otherwise known as the Association of Community
Organizations for Reform Now.
This month, an attorney for Neighborhood
Legal Services in Pacoima declared a countywide crisis in creating and
maintaining safe and affordable housing for low-income tenants.
State Sen. Richard Alarcon, D-Van Nuys,
hosted a tenants' rights forum in North Hollywood after introducing a bill
requiring housing inspectors to publicly list slumlords.
This summer, city officials say they will
likely vote on a proposal for inclusionary zoning, which will require
developers to include a minimum number of units for low-income families.
The proposal is supported by City
Council President Alex Padilla and housing committee Chairman Councilman
Eric Garcetti. -2004 March 31
