Los Angeles Market Outlook

The Los Angeles multifamily market is experiencing a downturn, likely due to the broader economic situation. This means landlords may face challenges with rent increases and tenant occupancy. However, the ongoing development of new units suggests future market fluctuations are possible.

Key Takeaways for Property Owners and Investors

• Rents are Dipping: Average rents in Los Angeles have fallen slightly year-over-year, reaching $2,560 by December 2023, a decrease of 1.1%.
• Occupancy Rates are Down: Vacancy rates are rising, with occupancy dipping to 96.1% in November 2023, a decrease in 40 basis points.
• Economic Downturn Impacts Job Market: Certain sectors, particularly information technology, have experienced job losses due to the recent entertainment industry strikes. Employment growth stood at 2.1% for the 12-month period ending in October, with Los Angeles adding 74,900 jobs. Meanwhile, the unemployment rate reached 5.0% as of November.
• Development Pipeline Remains Strong: Construction of new units continues despite the economic climate. The development pipeline remained sturdy, with 31,401 units underway as of December. Developers completed 11,121 apartments in 2023, representing a 2.4% expansion of stock.

Santa Monica Tightens Housing Regulations: Key Updates for Property Owners

Important changes are coming to Santa Monica housing codes! The Santa Monica City Council recently passed significant amendments to various housing codes, impacting landlords and property owners in the city.

Here's a quick rundown of the key changes:

• Increased Relocation Assistance: Landlords must provide financial assistance to tenants who are displaced due to certain reasons, including uninhabitable conditions or rent increases exceeding specific limits.
• Protections Against Rent Gouging: Landlords are prohibited from imposing excessive rent hikes exceeding market rates, a tactic sometimes used to pressure tenants into moving.
• Expanded Protections for Tenants: Buyout agreement protections are now extended to tenants in non-rent controlled multi-family buildings. Landlords must also comply with stricter regulations when offering buyout agreements.
• Stronger Anti-Discrimination Rules: Landlords cannot discriminate based on housing voucher status and must make necessary repairs to participate in the Section 8 program.

The Bottom Line:

These changes aim to strengthen tenant protections in Santa Monica. However, concerns exist regarding the impact on property owners and the overall housing market. The long-term implications of these measures remain to be seen. We recommend you closely review the complete details of the new ordinances to ensure compliance. Stay tuned for further updates as the situation develops.

New Properties Under Management

We are thrilled to announce that Power Property Management is expanding its portfolio yet again! We've recently acquired 24 units across Santa Monica and Beverly Hills, adding even more convenience to our roster. With a total of 5 new contracts secured, we're bringing our signature expertise and excellence in property management to these prestigious neighborhoods.

If you are an owner of a property and are looking to make a switch in your property management services, give us a call.