Liza Asner jumped into action the moment a five-bedroom house in Winnetka came up for rent.
It’s large, has plenty of communal space for her family and a good-sized yard for her dogs, Rooney and Baby Huey.
“Whatever you have to do, Sam, get us this place,” she told her real estate agent. “Tell (the landlord) I’ll give him the whole year up front.”
If she hadn’t offered $60,000 in rent up front, she said, “I don’t know if I would have gotten it.”
The search for a Southern California rental has been about as frenzied this year as the home buying market, with renters sometimes offering to pay their rent in advance and, in some cases, offering more than the asking rent to beat out stiff competition.
Southern California asking rents have increased at or near record rates in 2022, hammering residents from the San Fernando Valley to Orange County and the Inland Empire.
Los Angeles County’s average rent for a vacant apartment jumped nearly 13% in the first quarter from the year before, hitting a record-high average of $2,332 per month, a Southern California News Group composite of three leading apartment indexes shows.
That’s up $265 a month from the first three months of 2021 – and it’s $856 a month higher than in 2010.
San Fernando Valley rents may be rising even faster, with apartment rents jumping 21.6% this month from a year ago in Burbank and 17.8% in Glendale, according to a separate index by ApartmentList.com. In Pasadena, a contentious measure recently made it onto the November ballot to bring rent control to the city.
The tightest rental market in two decades is not just fueling homelessness, but impacting families, college students, retirees and everyone else who rents, said Ryan Bell, Southern California regional coordinator of Tenants Together.
Being forced to move “impacts their kids’ school, their jobs, their commutes and the environment,” Bell said. “Anecdotally, it’s really tough for people to find anything. … You hear (people say) on Nextdoor and on neighborhood apps, ‘If you can’t afford where you live, move.’ Move where? There’s no where for people to go.”
Some say rent hikes are forcing them to move.
Perla Illiana Lagunas Abundez and her husband lived with their six children in North Hills until a few years ago, when a nearly $300 rent hike forced them to move to neighboring Panorama City. They temporarily stayed in a one-bedroom apartment until they found their current residence, she said.
Lagunas Abundez said they’ve been looking for a larger place, but most landlords refuse to rent to such a large family.
“I keep looking for affordable housing, but it’s so expensive,” she said. “The new buildings, they don’t even call back when you apply. It’s a big struggle.”
Rebecca Swint, 43, who graduated with a bachelor’s degree from CSUN on Saturday, recently signed a lease to rent a house in West Hollywood for $4,000 a month — $1,800 more than her apartment in Santa Clarita — to be closer to UCLA where she’ll be attending graduate school. She’s getting a 1,055-square-foot, two-bedroom house to share with her two daughters and, potentially, a roommate to offset costs.
“It’s a tough decision because nobody wants to spend that kind of money on rent,” Swint said. But staying in more affordable but distant Santa Clarita would mean sacrificing the hours she spends with her daughters and her study time — in exchange for nightmarish commutes.
“(It’s) definitely a terrible time to be a renter in L.A.,” Swint said.
In the meantime, she said her landlord listed the apartment she’s about to move out of in Santa Clarita for $2,600 a month — an 18% markup from what she’s paying.
The average rent for a vacant Orange County apartment jumped 18.2% from the year before, hitting a record-high average of $2,476 per month, according to the SCNG composite. Inland Empire rents increased 17.4% year over year from early 2021 to a record-high average of $1,941.
What’s behind these big jumps? Vacancies have dropped to their lowest level in at least two decades, caused by an increase in the number of tenants and a decrease in tenant move-outs.
L.A. County’s apartment vacancies fell to 3.4% in the first quarter, according to real estate data firm CoStar, the lowest vacancy rate since at least the start of the 21st century. Vacancies fell to two-decade lows last summer in Orange County and the Inland Empire, rising slightly since to 2.4% in O.C. and 2.6% in the inland region.
“Our vacancy rate is at the lowest rate since I got in the business in 1995,” said Dan Tenenbaum, founding principal for Pacific Crest Real Estate, which manages 520 L.A. County apartments, 200 of them in the San Fernando Valley. “We are full. We are effectively full.”
“We’ve never seen occupancy this high,” added Chris Porter, chief demographer for Irvine-based John Burns Real Estate Consulting. “It’s young adults moving out of their parent’s home or moving out of a roommate situation. They’re living less densely than they have in the past. That’s how I’m explaining these extremely low vacancy rates.”
Porter noted that rising employment, increased wages and government stimulus checks put money in people’s pockets, giving them an incentive to move out. While household incomes have been rising, “I do think we’re reaching the point where affordability is certainly getting stretched,” he said.
Meanwhile, many would-be homebuyers are being forced to continue renting because they’re priced out of the for-sale market by rising mortgage rates. More high-income households and older residents also are choosing the rental lifestyle over homeownership, further swelling the ranks of renters.
House rents are up significantly as well. A CoreLogic survey released Tuesday, May 17, showed lease rates for a rental house up 10.6% in L.A. County, 14.4% in Orange County and 13.4%. February’s median rent for a three-bedroom house was $3,308 a month in L.A., $3,636 in O.C. and $2,388 in the Inland Empire.
Rebounding rents
Apartment rents are rebounding in Los Angeles County following a year of steady drops in lease rates for vacant units.
Liberated from the office during the pandemic, some tenants left denser, urban parts of L.A. County and moved to the Inland Empire in search of larger rentals with lower lease rates while they were working remotely. As a result, L.A. County rents fell year over year from the spring of 2020 through the winter of 2021.
But as the pandemic eased, rents started rising again: the average L.A. County asking rent increased 6.7% last summer, 10.2% last fall and 12.8% this past winter.
Eviction moratoriums contributed to falling vacancy rates and rising rents since more tenants were able to stay put through the health crisis, said Fred Sutton, the Los Angeles spokesperson for the California Apartment Association. Since the city and county of Los Angeles have some of the strongest tenant protections in the state, some renters haven’t paid rent for two years.
“Those units would have turned over,” Sutton said. “It’s all contributing to these costs being put on all the new units, the vacant units in L.A.”
Tenenbaum said the typical increase for a vacant apartment in his company’s 13 complexes was 5%, with rent hikes averaging 3% for renewing tenants.
Rising rents have helped his company recoup some of the losses caused by non-payers in his buildings, but not enough to cover all of his losses. Expenses, he said, “have skyrocketed” over the past two years, including the costs of maintenance, garbage collection and insurance.
“Even though it seems landlords are making money hand over fist in Los Angeles, for us it’s just the opposite,” Tenenbaum said. “We’re nowhere near where we were profitability-wise in 2019.”
‘Increase like no other’”
A Huntington Beach tenant recently complained his rent in a four-year-old building will jump $1,100, to over $3,500 a month, should he decide to renew. A new state law capping rent hikes at 5% plus inflation won’t help that tenant because it only applies to buildings that are 15 years old or more.
“We are now forced to relocate out of the area to find affordable housing, causing us to leave our jobs,” he said in an email.
Increases for a new lease in Southern California were two or three times greater than rent hikes for existing tenants renewing their leases, Porter said.
But some renewing tenants say they’re also getting hit with big hikes.
A resident of the luxury high-rise Astoria Central Park West Apartments in Irvine complained he’s been hit with a 9.2% increase, boosting his rent to $4,425 a month should he renew.
“This is a rent increase like no other,” the tenant said. “Normally, I’d see a 2.5% to 3% increase, which is acceptable.”
Just like buying
A Sherman Oaks attorney said he forked over $72,000 in advance — enough for a down payment on a 900-square-foot condo — to beat out five competitors seeking to rent a 96-year-old, two-story house on Chandler Boulevard. He even offered to pay $200 over the landlord’s asking rent of $5,000 a month.
“I paid (the rent) all in advance, plus the two months security deposit. All cash in advance, (because) that’s what it took to get it,” he said. “I luckily saw it within two hours of it coming on Zillow. Within 24 hours, I put in an offer. Within 36 hours, there were six offers. Everyone had to write a letter or an email to the owner. It was just like buying a home. Very competitive.”
Restaurant worker Miguel Cuin of Santa Ana is paying $700 more in rent than at the start of the pandemic after he and his wife lost their food-service jobs and were forced to move to avoid getting evicted.
For three months, the father of six searched for a place to move to, applying at 20-25 apartments, condos, townhomes and houses. Stiff competition for rentals, his poor credit and the size of his family made it impossible to find a place.
When a landlord finally invited him to come look at a three-bedroom duplex renting for $3,000 a month, Cuin replied: “To be honest, I don’t need to look at it.”
“I was desperate,” said Cuin, 36.
To pay the rent and keep food on the table, Cuin and his wife are now working two jobs each, including weekends. Although his rent is 30% higher than before the pandemic, he considers himself lucky.
“Everywhere you go, (when) there’s an open house for rent, you get so many people coming in, it’s insane,” Cuin said. “They easily get at least 10 applications for every home or apartment or condo because there’s so many people looking for a place to rent and not enough places.”
Money talks
The long-term outlook is for rent hikes to ease over the next few years, but rent drops aren’t expected, Porter said.
A recent report by apartment tracker Yardi Matrix forecasts L.A. County rent hikes will moderate to 7% by next April, with hikes of 6.2% in Orange County and 9.1% in the Inland Empire.
For now, however, tenants like Asner, 58, have to hustle to find a rental like the house she rented in the West Valley.
Asner had been looking for a house to buy after her landlord put her current rental up for sale. But after getting outbid on two offers, she decided like many other would-be homebuyers to keep renting. She spent two weeks hunting for another house to rent before the Winnetka house became available for $5,000 a month. She immediately called her agent to put in an offer.
“Money is going to talk. You need the extra leverage,” said Asner, daughter of the late actor, Ed Asner. “It’s like the (for-sale) housing market. I made this offer (to pay a full year in advance) just to be in the running.”
By the numbers
The average rent in Los Angeles County increased about 8.9% from the first quarter of 2020 to the same period this year. The vacancy rate shrank by 13 percentage points during the same period.
But things are even more stark when you consider rent increases and evictions were largely paused during the coronavirus pandemic’s first year: The average rent actually decreased and the vacancy rate increased from 2020 to 2021 — before spiking about 13% and crashing by 19 percentage-points, respectively, over the last year.
Below is a look at the average rents and vacancy rates countywide during the first quarters of the 2020, 2021 and 2022 calendar years.
2020
Average Rent: $2,142
Vacancy rate: 4.4%
2021
Average Rent: $2,067
Vacancy rate: 5%
2022
Average Rent: $2,332
Vacancy rate: 3.1%
Sources: Averages for numbers from CoStar, Moody’s-Reis and RealPage
