A Primer on Greater Los Angeles Rental Inventory

High Rentership Rates in Greater Los Angeles

As part of our deep dive on local markets, we turn our attention to the Greater Los Angeles area, the nation’s second-largest regional rental market after New York.

Greater Los Angeles, defined by the U.S. Census Bureau as the Los Angeles-Long Beach Combined Statistical Area (CSA), comprises the counties of Los Angeles, Orange, Riverside, San Bernardino and Ventura. The area is home to 18.8 million people. This is slightly less than the New York-Newark CSA’s 22.7 million as of year-end 2018. The two metroplexes make up an exclusive club in terms of size. The next largest urban region, the Chicago-Napier CSA, is a distant third with a population of 9.9 million.

Comparing the geographies of the New York and LA regions are a bit like comparing apples and oranges. New York City is more centralized while Los Angeles is more dispersed and suburban.

While it might come as a surprise, the rentership rates in LA are slightly higher than in New York. Through 2017, nearly 48% of all residential units were renter-occupied in LA compared to 46% in the New York region, with both surpassing the national average of 36%.

Reflecting some reversion to homeownership as the housing market has recovered, the share of renter-occupied units in LA peaked at 49% in 2016 before declining by more than a percentage point in 2017.

Rental Asset Class Mix and Growth

The composition of rental inventory in the Greater Los Angeles region mirrors the national mix. The noticeable difference between the two is LA’s rental inventory comprised more multifamily, at 53% of the overall rental inventory compared to the national average of 45%.

Small multifamily units formed the dominant share of the overall rental inventory, at 37%, compared to the national average of 32%. Large multifamily made up another 16%, 3 percentage points higher than the U.S. average.

Single-family rentals (SFRs) comprised the second-largest asset class in the LA region, accounting for 34% of rentals. This compared similarly to the nationwide share of 36%.

Between 2015 and 2017, the share of large multifamily in LA shot up by a brisk 129 basis points (bps). The national inventory moved in the same direction, skewing towards large multifamily by 92 bps.

The shares of small multifamily and townhome (2-4 unit) rental inventory have declined slightly over the 2015 to 2017 period, while the SFR share increased slightly.

In upcoming articles, we’ll dig deeper into county-level rental inventory and rent trends to provide more insight into the Greater LA region.

For more multifamily trends and research, visit our Chatter Blog.

Note: All data is sourced from the American Community Survey (ACS), unless otherwise stated. ACS statistics are sample-based estimates of the compositional profile of the total population in the given year of data collection, and include a margin of error.