Econowatch

Econowatch/Netherby/mike1st/mark2nd By JENNIFER NETHERBY Staff Reporter With a 2 percent apartment vacancy rate in most of the San Fernando Valley and little construction expected soon, the apartment market is expected to get even tighter in the months ahead. And that is spurring apartment owners to hike rents. “For the first time in a while, our owners are in the black,” said Shari Rosen, executive director of the Apartment Association of the San Fernando Valley. “Rents in non-rent control apartments are moving up for the first time in a good number of years.” A report by RealFacts, a Novato, Calif.-based real estate research firm, reported in July that the average rent in Los Angeles County rose to a high of $982 a month in June 1999, nearly 20 percent above the national average. The average occupancy rate countywide was 97.4 percent. In the San Fernando Valley, the apartment occupancy rate in most communities hovered in the high-90 percent range. Pacoima and Panorama City had the lowest occupancy rate, at 80 percent and 81 percent, respectively. Rents in those communities were also comparatively low, averaging between $550 and $600 a month. Market conditions are posing certain challenges for some apartment complex owners, Rosen said. While many are raising rents as soon as apartment units hit the market, tenants are now tending to stay put longer. And that is preventing apartment owners of units built before 1978 from raising rents to market levels, Rosen said. Apartments built before 1978 are under rent control, and rents on them can only be increased by a maximum of 3 percent a year. Another sign that tenants are staying put is that the association has seen a decline in the number of rental application screenings being submitted, Rosen said. Rosen said she is not aware of a new apartment construction project currently underway in the Valley.