Priced out of Los Angeles’ red-hot housing market, some prospective homebuyers are opting instead to rent larger apartments that can accommodate their changing lifestyle needs. The desire for additional space — whether intended to serve as a home office or baby’s nursery — is driving up the price of two-bedroom apartments in the city, according to apartment rental platform Zumper.
From June to July, median two-bedroom rent rose 1.8 percent to $2,800 per month. While rents for two-bedroom apartments were still down 5.7 percent compared to the same period last year, prices for larger units have begun to stage a rapid recovery. Since bottoming out in March and April, median two-bedroom rent in Los Angeles has jumped $150.
Median one-bedroom rent was unchanged from June at $2,000 per month, representing a 6.5 percent yearly decline. Up until July, one-bedroom rent had been climbing steadily since March, posting a $90 price increase.
“The hyper-competitive sales market is also keeping a lot of prospective buyers in the rental market, particularly first-time buyers with growing families; this would also explain why two-bedroom rent growth is outpacing that of one-bedroom growth,” wrote Zumper report author Jeff Andrews.
The Delta variant of COVID-19 and the potential end of LA County’s temporary eviction moratorium make it difficult to predict where the rental market will head in the months to come. A UCLA-USC survey published last week suggests that renters throughout the county owe more than $3 billion in back rent.
The typical renter household owes their landlord $2,800 in unpaid rent, and 49 percent of respondents indicated that they were unable to pay all of their rent during the course of the pandemic. The survey of 1,000 renters was conducted in March 2021 as a follow-up to a July 2020 survey, which focused on renters’ short-term ability to cover their monthly payments.
The most recent findings revealed that the situation has grown worse for many Los Angeles area renters. The preliminary survey results showed that about 7 percent of renters had missed a full rent payment, while the follow-up demonstrated that 31 percent of renters had paid less than the full amount to a landlord at least once during the pandemic.
Although LA County’s eviction ban will remain in place until September 30th (there’s been no word yet on a possible extension), the 2021 survey found that 25 percent of renters had been threatened with eviction — a 10 percent increase compared to the previous year’s results. It’s not illegal for a landlord to threaten their tenant with eviction, but the courts can’t begin to process these cases until the moratorium is lifted.
One issue that is preventing many renters from getting out of debt is how financial aid is being distributed. Current programs typically involve the government paying the landlord, but the survey found that many distressed tenants owe money to a credit card company or a family member rather than their landlord.
To alleviate these financial troubles, the report’s authors suggest giving cash payments to distressed renters and requiring them submit proof of debt, lost income or work to discourage fraud.