Any chance rents will go down in LA? (Orange, Whittier: renters, insurance)

[Electrician4you]

Originally Posted by SandyCo

There are only two things that will drastically lower rents, or at least keep them from rising.

1. Real estate crash. If interest rates rise too fast, this could happen.

2. A medium size earthquake. Not a large earthquake, because that would damage the housing stock, and we'd be no better off. A medium earthquake would do some damage in concentrated areas, but it would scare a lot of people into leaving.

Rents here are awful. I'm fortunate that my rent is well below market rate (and my building isn't under rent control!), but it's going up from $1,590 to $1,660 beginning in December. That's a hike of only 4.22%, but guess what? My salary is only increasing between 1-2% a year. $65 more per month is not fun, but it's doable. No way could I absorb a $400/mo. increase.

None of these things are a huge factor. Unles you have a MASS EXODUS of people creating a glut of vacancies it's not happening. Because there is NO place for them to go to. There is no city that can take thousands of people and accommodate them. There just isn't.
Rents may go down because of a economic crisis, but I guarantee that most rents have to cover the nut n most cases.

As far as Prop 13 going away that's wishful thinking. NOBIDY is going to want to touch the property value subject. NAR will **** kittens because you just threw a hand grenade in the property value room which is one of their big selling points.. And homeowners aren't going to be really happy that you killed their house value and put them upside down or just nuked their retirement sarcophagus from orbit. So wishful thinking if you think Prop 13 is going to go away. And the people who think "you're not paying your fair share " well they need to go understand how Prop 13 works. Most houses in California either have or are about to change hands in California in the next 10 years.

[thelopez2]

If you make homeownership more expensive, more homeowners will become renters. Guess what will happen to rents.

[jm1982]

In an attempt to get more affordable housing built , they new rules might backfire.
More L.A developers might find it too expensive and a pain to build in L.A

In addition to requiring affordable housing units they are also requiring buildings to pay much higher wages to workers.

Lot's of red tape and a hassle
"Developers must pay construction wages on par with those required for public-works projects, hire 30% of the workforce from within city limits, set aside 10% of jobs for certain disadvantaged workers living within 5 miles of the project and ensure 60% of workers have experience on par with graduates of a union apprenticeship program."


Los Angeles Builders Say New Affordable-Housing Rules Will Stifle Construction - WSJ

[jm1982]

Another article about the new rules for developers

"Al Leibovic is one of those developers and builds small apartment buildings in the San Fernando Valley.

He previously told The Times that if the measure passed he wouldn’t build projects with fewer than 25 units that required exemptions — which many do. But after further running the numbers with his development team, he’s now worried about larger projects as well.

“This is pretty devastating,” he said. “It really throws all of our plans to construct an additional 700 units in the city of L.A. into question.”"

L.A. developers grapple with affordable-housing measure passed by a wide margin - LA Times

[NativeOrange]

Yep. Measure JJJ should not have passed. Forcing developers to include a huge amount of affordable housing will just shoot up the market rate units to cover the cost. That's if the developer doesn't pull out of building in LA altogether. Now if the NII passes in March, say goodbye to any sort of relief from the housing crunch.

[jm1982]

Originally Posted by NativeOrange

Yep. Measure JJJ should not have passed. Forcing developers to include a huge amount of affordable housing will just shoot up the market rate units to cover the cost. That's if the developer doesn't pull out of building in LA altogether. Now if the NII passes in March, say goodbye to any sort of relief from the housing crunch.

Has anyone seen so much red tape? It's ridiculous .

It's almost like they just don't want people to build.

What if you can't find any single parents, veterans or people on public assistance that are also construction workers AND live within 5 miles or the project?..what if they can't afford to live within 5 miles?

"JJJ would also require that these project be built by licensed contractors, 30 percent of whom are Los Angeles residents and at least 10 percent of whom are "transitional workers," meaning they’re single parents, veterans, on public assistance, or chronically unemployed. They’d also have to live within a five-mile radius of the project. These workers would have to be paid the "prevailing wage" in the area, an average of area wages based on a formula created by the state government."

[cwarmy]

Demand probably won't go down unless there is a major quake or the drought really starts impact households & businesses.

I heard on the radio the other day that there are many people from the Bay Area moving to So Cal bcs. real estate is cheaper in comparison to the s**t holes commanding millions of $$ up there. Things won't change anytime soon.

[majoun]

Originally Posted by Astral_Weeks

The 1992 Riots and the 1994 Northridge earthquake were bad publicity for LA but were NOT the cause of decreasing home prices or rents in the early 90's.

Demand for housing is driven by jobs, economic activity and household formation. The early 90's recession was traumatic for LA County. The end of the Cold War and the implosion of the local aerospace industry in that era was devastating for the local economy as many high-paying jobs (both blue and white collar) disappeared.

The Northridge Earthquake caused lots of physical and financial loss but the feds also stepped in with a big aid package. Residential vacancies were already elevated due to the recession (a saving grace for some residents who lived in red tagged buildings in impacted areas like Reseda/Northridge and Hollywood).

The riots definitely depressed home prices and rents in certain areas. And certainly depressed and discouraged economic activity.

[anrev]

No matter how expensive LA gets, there will always be somewhere more expensive. And people from there will come here looking for a bargain.

Like I plan to do when I cash out of my home. I can buy an apartment building in another state with the equity I have in my home here.

[Astoriahoney]

Earthquakes are the only thing that affects our housing market. We have been overdue a good shaking here and we need it to get rid of all these Transplants that came from other states and not doing a damn thing to enrich our state.

Once they feel large 6 or 7.0 it will spark a mass exodus from our state. Inventory will shoot straight up, rents will plummet and LA's traffic will become more tolerable. This happened during Whittier and absolutely during Northridge, in fact post Northridge rents stayed low for almost a decade.