Downtown LA is the nation’s premier neighborhood for multi-family deliveries
today high house prices and limited single-family residential construction (SFR) led a majority of Millennium and Gen (Gen) Z populations for hire. As a result, much of the nation’s share of new housing is concentrated in multi-family units, particularly in California.
Downtown Los Angeles is the nation’s premier neighborhood for deliveries of collective housing with 10,100 units completed since 2017 according to RentCafe analysis of census data. Also with a high number of completed multifamily units are:
- 3,500 units completed in downtown San Jose;
- 3,400 units completed in Hollywood; and
- 2,700 units completed in East Village, San Diego.
In Los Angeles neighborhoods alone, since 2017, the highest number of multi-family units built was:
- 2,400 units in Koreatown;
- 2,100 units in Westlake;
- 1,300 units at Westchester;
- 981 units in Sawtelle; and
- 803 units in Mid-Wilshire.
For an area known for its city living amenities and entertainment industries, it makes sense that downtown LA has seen the biggest increase in new multi-family units in the past five years. About 39% of the total number of new multi-family units delivered in the past five years to Los Angeles are in downtown LA. has to offer is in great demand.
Renters place the most weight on the cost of living when deciding which area to move to, even above crime and safety. However, even with the high number of additions, Downtown LA isn’t exactly the cheapest neighborhood to live in. low to middle income people. Rental prices in downtown LA can range from an average of $ 1,700 to $ 28,500, according to RentCafe. Knowing that tenants are overburdened with costs in the United States, especially colored tenants, who exactly is filling all these new units?
The answer can be Flatmates.
A denser life for tenants, more opportunities for builders
Yes overloaded tenants want to continue living in neighborhoods like downtown LA, the number of roommates per unit must increase to cover rental costs. Low- to middle-income Millennials and Gen Z renters now have to live with multiple roommates to pay rental costs in downtown LA, and across the state for that matter.
Accordingly, the average household size in LA County is raised out of necessity. Here, the average household size is 3.0 people according to the US Census Bureau. To put it in perspective, compared to the state of California as a whole, the average household size in LA County is much larger. The average household size in California is 2.75 people.
Several Flatmates and even intergenerational housing have become commonplace now to cover rental costs. With today’s one stagnant wages and rents rising rapidly, this trend does not appear to be abating anytime soon.
On the other side of the coin, builders have the opportunity to invest in taller, denser homes and get better. returns on investment (ROI) than with the expensive new constructions of SFR.
Agents can expect to see more multi-family construction in the future thanks to growing government incentives for multi-family construction. AB2345, which passed in September 2020, provides further incentive for developers to build low to mid-level housing. The bill also allows local governments to grant additional exemptions for projects located within half a mile of transit, reducing costs under the new density bonus law requirements.
Transit-oriented development is becoming a popular way to add inventory and tackle the housing shortage. Facilities near public transport reduce the cost per unit, which makes construction easier and faster and reduces the need for onerous parking requirements.
Slowly, but surely, California lawmakers are trying to ease the housing crisis by providing new development opportunities for builders and more lower to mid-level housing.
Legislative measures towards more affordable housing