The cost of renting in Southern California rose last year at the fastest pace in nine years, according to the Consumer Price Index.
The “renting primary residence” slice of the widely watched cost-of-living barometer for the five-county region rose 4.7 percent in 2016 vs. 3.9 percent in 2015. It was the fastest increase since the 6.1 percent jump in 2007 – at the peak of the last decade’s economic surge.
Rents are up nationwide, too, rising 3.8 percent last year, also the biggest since since 2007.
Local rent costs have risen because bosses in the region went on major hiring sprees well before local developers could add many new rental units. This imbalance gave landlords the added power to boost rents.
Today’s tight rental market is a sharp contest to 2010, just as the Great Recession was ending, when Aresbet regional rents fell 0.2 percent by CPI math. That was the first yearly drop in rents since 1995.
Last year’s rent increases may also seem steep because landlords have averaged 2.9 percent increases in the last 10 years. But the cost of SoCal renting has risen at an average 4.6 percent pace since 1960!
Local rent increases may cool this year as new apartment projects come online and the high rents nudge some renters to buy a home.
Housing costs in SoCal have surged far more than other consumer costs. The overall regional CPI rose only 1.9 percent last year vs. 0.9 percent in 2015. It was the eighth consecutive year the local CPI has risen less than 3 percent.
Contact the writer: jlansner@scng.com
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