Multifamily Rentals Pushing Outside of Los Angeles’ Urban Core
- Rental inventory in Greater Los Angeles is highly concentrated in its urban core, Los Angeles County.
- Small multifamily in particular leads this core market concentration.
- Large multifamily has increased its market share as the smaller multifamily inventory has fallen, especially in LA county.
Multifamily Concentrated in Los Angeles County
In this follow-up blog to the rental market primer on Greater Los Angeles, we further explore the distribution of rental assets and inventory growth across the region’s urban core and five counties.
LA County is the region’s center of gravity. Through 2017, the county captured 56% of all housing units and 64% of all renter-occupied units.
Naturally, the share of the region’s rental housing units is lower in the outer counties, which are more suburban and tend to have more owner-occupied housing units.
Orange County accounted for the second-largest share of the region’s rental units, at 16%. Riverside and San Bernardino followed at around 8% each, and Ventura made up just 4%.
Outer Counties Experiencing Multifamily Share Gains
As shown in our recent blog, multifamily properties make up the dominant share of the total occupied rental inventory in Greater LA.
While LA County forms the bulk of this asset class, the less-dense profile of LA’s outer counties has driven them to specialize in single-family rental (SFR) housing.
Multifamily apartments constitute nearly 60% of the overall rental inventory in LA County. This is compared to only 44% in the four outer counties.
Small multifamily is highly concentrated in LA’s urban core, making up 41% of its rentals. In the other four counties, small multifamily accounted for just 29%. The prevalence of large apartment properties, however, is more comparable between LA County and the rest of Greater LA, with these units accounting for 17% and 15% of occupied rental units, respectively.
In contrast, SFR accounts for 42% of occupied rentals in the outer counties, 12 percentage points higher than in LA County.
At the same time, large multifamily is making up an increasing share of the region’s rentals. The property type registered impressive gains in both LA county and the outer counties from 2015 to 2017.
In LA County, these gains were matched by declines in small multifamily (107 basis points) and townhome units (58 bps). Meanwhile, SFR expanded slightly, seeing its share rise by 34 bps.
These trends suggest the rental market in Greater LA is densifying, as the distribution of rentals is skewing toward large multifamily. Further, LA county’s urban footprint continues to spread outward as multifamily properties, small and large, are accounting for higher shares of rentals in the region’s outer counties.
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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.