At the end of the year, the Los Angeles-Long Beach-Anaheim area saw a decrease in housing rents. The measure to restrict rent increases in Los Angeles for the first time in 40 years will also come into effect in February of the new year.
The wildfires in early Los Angeles caused tens of thousands of people to lose their homes, leading them to rent houses, which rapidly drove up local rents. However, by the end of the year, rents began to show a downward trend. According to a rental report released by Realtor.com in mid-November, the median monthly rent for 0-2 bedroom units in the Los Angeles-Long Beach-Anaheim area was $2,776, a 2% decrease from the same period last year. (0-bedroom refers to studio apartments.) The median rent for the entire United States dropped to $1,693, a 1% decrease compared to the previous year.
Nevertheless, Los Angeles’ monthly rent levels still rank high among the top 50 metropolitan areas in the US, only lower than San Jose-Sunnyvale-Santa Clara ($3,363), New York-Newark-Jersey City ($2,898), Boston-Cambridge-Newton ($2,870), and San Francisco-Oakland-Fremont ($2,819).
Compared to the national median rent, the monthly housing costs in Los Angeles are still over a thousand dollars higher. Based on California’s minimum wage of $16.7, housing affordability remains a major challenge for Angelenos: two workers would need to each work 80 hours to afford the median rent.
Meanwhile, Los Angeles’ rent control measures are also set to take effect. The “Rent Stabilization Ordinance” signed by the city in December limits annual rent increases for buildings constructed before 1978 to between 1% and 4%, replacing the 3% to 8% increases implemented over the past 40 years.
Realtor.com’s Senior Economist Joel Berner analyzed that for various reasons, rents in many major US metropolitan areas continue to decline, as part of the adjustment following the significant rent increases in 2021 and 2022. Regarding Los Angeles’ rent control measures, he believes they may not have a significant impact because rents are decreasing, and even without this measure, renters may find cheaper housing options through comparison.
In Los Angeles, over 30% of residents live in rental housing, with half of them spending over 30% of their income on rent. Some advocates for limiting rent increases believe that affordable rents can help reduce homelessness.
However, many landlords oppose setting limits on rent increases. Daniel Yukelson, CEO of the Apartment Association of Greater Los Angeles (AAGLA), told Realtor.com that rising financing costs and soaring insurance premiums in recent years have almost made landlords lose their profitability and seek alternatives. He mentioned a friend who sold half of his hundred properties in Los Angeles and moved to South Carolina, where policies are more lenient.