Bad news for California renters: New apartment plans drop to 10-year low
The hopes of California tenants that a wave of apartment construction might provide more rent relief may be fizzling in early 2024. Construction plans for multifamily housing plunged to a 10-year low, my trusty spreadsheet found after peeking at quarterly California building permit patterns from the Census Bureau complied by the St. Louis Fed. Multifamily housing is primarily apartments plus certain ownership condos or townhomes. California permits approved for multifamily housing in the first quarter fell 22% below 2023’s start to 8,972 units in this year’s first three months. That’s the slowest quarter for multifamily plans since the start of 2014. California developers cooled their building plans as interest rates soared, the economy slowed and folks no longer felt the pandemic-fueled need for larger living spaces. And let’s not forget that California rents have flattened as vacancies increased. No amount of legislation or nudging will get developers to build when economic conditions aren’t near-perfect. Sadly, the year’s slow start contrasts sharply with a previously swift pace of multifamily housing construction in California. The first quarter’s permitting ran 32% below the 2021-23 pace. In those three