Scroll Down
Epicenters of Supply Additions Shift as
Builders Respond to Emerging Trends
Deliveries focused in some of the least vacant submarkets. After falling to 2.1 percent in early 2022, vacancy in Los Angeles rose 300 basis points over the subsequent eight quarters, driven by a more pronounced rise in Class A availability. This spike prompted a pullback in multifamily permitting, dropping deliveries 1,800 units below the local average of the past 10 years. The most notable reduction will occur in the CBD, which is comprised of Downtown Los Angeles, Mid-Wilshire and Hollywood. Here, the decline is warranted, as more than 8,000 rentals were added over the prior two years — a supply wave that pushed local vacancy near 6 percent. Westside Cities will also register a noteworthy pullback in completions, with South Bay and the Burbank-Glendale-Pasadena area also adding a minimal number of units. In contrast, the San Gabriel and San Fernando valleys — home to some of the metro’s lowest vacancy rates — receive a collective 3,100 units in 2025 after combining for 1,000 new rentals last year. This supply-side pressure may translate into some local upward vacancy momentum in the short term. Still, the moderation in deliveries elsewhere and expectations for white-collar job creation should help foster a level of demand for Class A and B rentals that supports a second-straight year of positive net absorption overall.