USC Casden Multifamily Forecast: Rent Continues to Increase as Demand for Southern California Rental Housing Outpaces Supply

LOS ANGELES--()--The 2014 USC Casden Multifamily Forecast reports that rents continue to rise throughout the region as the demand for rental housing outpaces the completion of new units.

During the one-year period that ended in June, apartment vacancies declined in all four Southern California markets analyzed. San Diego County had the lowest vacancy rate at 3.2 percent (a 2.8 percent decrease), followed by Los Angeles at 3.3 percent (a 10.8 percent decrease), Orange County at 3.6 percent (a 14 percent decrease), and the Inland Empire, where vacancies plummeted 30 percent to 3.8 percent.

While the forecast projects relatively flat vacancy rates over the next two years – a slight decrease in Los Angeles and Orange counties countered by a modest increase in San Diego County and the Inland Empire – renters will pay more for housing.

USC Lusk Center Director Richard Green, who co-authored the study with USC researcher Vincent Reina and California Association of Realtors Senior Economist Selma Hepp, says the affordability issue is a cause for concern.

“Though the economy and employment have improved, renters’ incomes are stagnant,” Green said. “So while net absorption and occupancy rates are moving in the right direction, affordability continues to worsen. As more renters double up or move elsewhere, vacancies could increase and drive down rents.”

As of June 2014, renters in Los Angeles County paid a monthly average of $1,716, which was highest in the region and 3.9 percent above the previous year. The average rent in Orange County increased 3.2 percent to $1,663, while San Diego County renters paid $1,498, a 2.8 percent increase. While the Inland Empire continues to have the most affordable rental housing at $1,134 per month, it also saw the sharpest increase at 4.1 percent.

The average rent in all four regions is projected to increase every quarter for the next two years:


Average rent in Los Angeles County is projected to increase 8.2 percent by June 2016. Vacancy rates are expected to decrease 6 percent by June 2015 and another 6.8 percent by June 2016. The Santa Monica/Marina del Rey submarket currently pays the county’s highest rent at $2,618. At $829, Antelope Valley has the lowest average rent.


Orange County rents are expected to increase 8.6 percent by June 2016. Unless there is a significant increase in new units, the vacancy rate will decrease by 56 basis points, or 15.5 percent during the same period. Currently, Newport Beach’s average rent of $2,223 is the highest in Orange County, while Anaheim’s $1,300 average rent is the lowest.


Average rent in the Inland Empire is forecasted to increase 9.9 percent by June 2016. The vacancy rate, which will be up and down through June 2016, is expected to be relatively unchanged by the end of the same period of time. This year, renters in the Rancho Cucamonga/Upland submarket paid the highest rent at $1.384, while Victorville/Outer San Bernardino renters paid the lowest at $797.


Rents in San Diego County are projected to increase 6.9 percent by June 2016. The countywide vacancy rate will be up and down during that period, but end up 2.9 percent above the current vacancy rates. In 2014, the Carlsbad/Encinitas/Del Mar submarket pays the highest rent at $1,843 while the Escondido submarket pays the lowest at $1,119.

The nearly 60-page report also contains additional analysis and projections for all 52 submarkets that comprise the four larger markets in Southern California. The complete 2014 USC Casden Multifamily Forecast will be made available online on Wednesday, October 8 at

About the USC Lusk Center: The University of Southern California Lusk Center for Real Estate seeks to advance real estate knowledge, inform business practice, and address timely issues that affect the real estate industry, the urban economy, and public policy. The Lusk Center produces relevant and timely real estate research, supports educational programs for students and executives, and convenes professional forums that bring together academics, students, business executives, and community leaders. For more information please visit


The Hoyt Organization
Kent Barrett, 310-373-0103


The Hoyt Organization
Kent Barrett, 310-373-0103