How much have West Hollywood market-rate rents gone up?
How much have West Hollywood market-rate rents gone up? We have answers from two sources. One is the Zillow Rent Index. According to that index, market-rate rents increased 12% in 2015, after increasing 8% in 2014 and 4% in 2013. The index only goes back to 2010 and, since then, the average annual increase was 5%.
The chart below shows the year-to-year percentage increases in blue. You can see the values by hovering over or touching the columns.
Our second source for West Hollywood market-rate rents is an index we created, the RSNT rent index. (Please see the Footnote: RSNT rent index for more information.) We suspect the Zillow Rent Index may be more attuned to newer housing, which isn’t rent-stabilized and isn’t the biggest part of West Hollywood’s housing supply. The RSNT index focuses on older, rent-stabilized housing, using City data.
According to the RSNT index, market-rate rents for older housing went up 6% or 7% per year in 2012, 2013, and 2014. The numbers are shown in green in the chart above. We don’t have the number for 2015 yet.
If we look back in time, there was another three-year period of similar increases from 2005 to 2007. We also see two years after economic downturns when move-in rents actually declined. Since 2001, the average annual increase was 4%.
Increases in West Hollywood market-rate rents through 2014
The chart below compares the cumulative rent increases over 1, 3, 5, and 10-year historical periods, ending in 2014. That’s the last year for which we have the RSNT rent index. The chart may change significantly when we get the 2015 data. The Zillow Rent Index isn’t shown for 5 and 10-year periods because it hasn’t been around long enough.
2015 increase compared to nearby areas
The estimated 12% increase in market-rate rents in 2015 stands out. 12% is the biggest increase in the years for which we have data, half-again the size of the second-highest (8%). So we may wonder, was this big 2015 increase unique to West Hollywood?
The answer is no, West Hollywood’s 12% increase was similar to nearby cities and neighborhoods. The Zillow Rent Index suggests that rents rose 14% in Beverly Hills and 16% in Santa Monica from December, 2014, to December, 2015. Rents in Los Angeles as a whole grew only 7%, but rents in nearby Los Angeles neighborhoods grew faster. For example, Hollywood’s rents were estimated to grow at the same 12% rate as West Hollywood.
Note: This article was revised on February 3, 2016, to add the 2015 comparison to other areas.
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