LA Rental Prices are on an Upward Crawl
Rental prices in Los Angeles creeped up slightly in May, according to a new report from Apartment List.
The median price for a two-bedroom apartment is now $1,750—$10 higher than a month ago. The price of a one-bedroom hasn’t budged; it remains at $1,360.
Those numbers are based on census data and give a good sense of what renters in the city of Los Angeles are now paying. But what about the prices faced by newcomers to the city and those simply looking for a new place?
CoStar provided a separate estimates based on the prices of LA apartments now listed for rent. According to the firm’s calculations, the cost of a two-bedroom is now $2,126 per month (up from $2,109 at the start of May); for a one-bedroom it’s $1,671 (up from $1,651).
Whichever estimate you use, prices appear to be rising—but at a fairly manageable rate. The cost of rent spiked dramatically in the last five years, as the nation’s economy recovered from the Great Recession. In 2018, rents aren’t rising nearly as quickly.
According to Apartment List, prices are up just 1.9 percent since last year. That’s below the average increase of 2.2 percent statewide. It’s also less than the minimum 3 percent rent hike permitted each year under the city’s rent control rules.
Why are prices starting to plateau? Last month, Richard Green, director of the Lusk Center for Real Estate at USC, speculated that new housing construction has increased the supply of apartments enough to better meet renter demand.
Rental prices may also have climbed so high that some LA residents are no longer willing or able to pay them. A recent report from the California Housing Partnership Corporation found that the 800,000 residents of Los Angeles County who earn less than half of the median income typically spend more than 70 percent of their income on housing. That leaves little left over for necessary expenses—let alone future rent hikes.