Is the typical Long Beach, CA Tenant being evicted?
The affects of a transitioning Apartment Market (Long Beach, CA) – By Appraiser Brendan Flynn
Long Beach Apartment Market and Increasing Rents (Pushing Out long term Natives)
A recent article was published commenting on Downtown’s revitalization. The article outlines the concerns of native tenants concerning the affordability of local Multi-Family market rents. The article highlights the rates paid by a long term tenant to the new normal of higher current market rental rates. The author notes a one bedroom unit on Linden for $795, with a one bedroom Apartment unit steps away recently rented for $1650 per month. Although that range is unusually extreme the basis of the argument is that the areas rising rents have the potential of driving out hard working Long Beach natives. The foundation of the article has merit as neighborhoods, which include multi-Family housing are in the process of transitioning thru increased demand as wealthier wage earners are discovering our great City. Demand is increasing and supply is held mostly constant. The result affects individuals with less resources who are forced to choose other alternatives.
The concept presented in the article is interesting as it’s a it highlights the positives and negatives of the current rental climate . Gentrification and displacement has been a natural occurrence in Real Estate for decades. The fact is more higher wage earners are migrating to desiring to live Long Beach, especially in the portions of the City of Long Beach with close proximity to the Pacific Ocean. In addition, Long Beach has a diverse array of attractive support services. Long Beach is amongst the last areas with all its benefits that is reasonably priced (now transitioning) within Los Angeles County.
My first rental was in Belmont Shore, then it was an area affordable to dual income Teachers. Ultimately, Belmont Shore has become so pricey that its now generally unaffordable to the same participants . Teachers are now forced to choose alternative housing solutions. The article highlights potential negative affects to tenants from increases in rents, however, as in my Belmont Shore example affordability has impacted countless Real Estate participants including home buyers and investors. Welcome to the desirable climate and diverse and powerful Southern California Economy. Our experience with the Long Beach Rental Marketplace concurs with the economics highlights of this article.
Its important to point out that the article misses the mark, as it slightly blames the situation on greedy new investors in the marketplace. Market rents are based on supply and demand. The available inventory is not expanding rapidly and thus the supply is held stagnant in relationship to demand. This can result in rising market rents.
The article eventually discusses the supply side. The mentioned number of proposed new units most likely won’t dent market rents nor change the trajectory of the challenges facing existing area renters. Ultimately, this circumstance is the collateral damage of living in Southern California. My hope is eventually true solutions on the supply side (subsidized housing) will evolve providing relief for native renters. In addition, my hope is that investors will be fairly compensated for the risk and work associated with Apartment ownership.