Business & Economy

LA's vacancy rate will drop to 2 percent, squeezing out subsidized tenants, officials say

Los Angeles is seeing historically low vacancy rates--which means for some, finding an apartment is impossible.
Los Angeles is seeing historically low vacancy rates--which means for some, finding an apartment is impossible.
File photo by GABRIEL BOUYS/AFP/Getty Images

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Los Angeles's historically low vacancy rates - currently about 3 percent - will drop to 2 percent by the end of the year and take a big toll on people who use government-backed housing vouchers to pay the rent, officials said.

"These are as low as we've ever seen them," Carlos VanNatter, director of the Housing Authority of the City of L.A.'s Section 8 program, said of the local vacancy rates. "So it's difficult for our clients to locate units now."

The housing vouchers cap rents and some landlords don't want the perceived hassle of dealing with the program so choose to lease to tenants who can pay the rent on their own, he said. Already about 25 percent of those who get a voucher can't find a place within 6 months and have to give up their voucher.

The vacancy rate is the percent of the city's rental properties that are vacant at any given time.

The dropping vacancy rate is the latest manifestation of L.A.'s affordable housing shortage said Jacqueline Leavitt, a professor of urban planning at UCLA's Luskin School of Public Affairs.

"It's a very serious crisis and it has been for the past twenty years, if not more," she said.

Unlike New York Mayor Bill DeBlasio, who has made affordable housing a top priority of his administration, L.A. Mayor Eric Garcetti has instead been tackling poverty principally though an increase to the minimum wage.

In the fall, he outlined four goals to improve housing: build 100,000 housing units by 2021; replenish the city's Affordable Housing Trust Fund; develop housing on sites owned by Metro; and reform the state's environmental review process. But he didn't spell out how he would do it.

In his State of the City address in April, Garcetti pledged to replenish the trust fund, with $5 million from its general fund, and another $5 million generated from a future hotel tax on Airbnb rentals. The fund has provided loans to developers to help them build apartments for low-income residents.

Less than a decade ago, the fund had more than $100 million, but it dropped to $19 million last year, according to an estimate from the city Housing Department, after federal grants slowed to a trickle, and dollars from community redevelopment agencies were disbanded by the governor in 2011.

Leavitt, of UCLA, said the continuing tight rental market is going to have the biggest effect on those who can least afford it.

"Part of the impact is going to be more homelessness," she said.

The latest homeless census counted 44,359 people living on the streets or in their cars in Los Angeles County.