More than 10,000 new apartments have been constructed in Los Angeles County in the past year, according to a new report from real estate firm Marcus & Millichap.
That number, which includes units built between July of 2016 and June of 2017, represents a sizable 61 percent increase over the year before and is the highest number of apartments constructed over the five-year period studied in the report.
Across the region, the large amount of rental construction over the last year probably isn’t a fluke; construction is now underway on projects set to bring an additional 27,358 apartments to the LA area.
Will the influx of supply do anything to bring down soaring rents? Sadly, it probably won’t.
The report notes that the LA area vacancy rate is low enough—around 3.3 percent—that the newly constructed units, along with those under construction, are unlikely to have a region-wide effect. According to Marcus & Millichap, the low vacancy rate, “combined with steady demand,” will cause rents to continue increasing “at twice the rate of inflation.”
Of the 10,649 units built over the past year, more than half are in what the authors of the report classify as the greater Downtown LA area, which includes rapidly developing neighborhoods such as Koreatown and Westlake, in addition to the Downtown core.
In the San Fernando Valley, where a number of major developments are poised to impact the region, 1,510 units were constructed. In the South Bay, the number was 1,755.
Of course, development isn’t booming everywhere. On the Westside, only 701 apartments were constructed last year—of which more than one-third were in a single building: Century City’s new luxury tower Ten Thousand, where rents start at $9,600 per month.