Econowatch

By WADE DANIELS Staff Reporter The vacancy rate for San Fernando Valley apartments dropped to 5.4 percent in July from 6 percent the previous month, providing reassurance to apartment owners that their fortunes are on the rebound. Many landlords lost buildings through foreclosures earlier this decade when tenants were scarce, said Jim Rodriguez, vice president of the Van Nuys-based Apartment Owners Association. “It was a bloodbath for a few years, there were a lot of buildings lost,” he said. In 1995 and 1996, lenders each day were initiating foreclosure proceedings against an average of five L.A.-area apartment buildings with five or more units, a substantial portion of which were in the Valley, he said. “We’re finally pulling out of it as vacancies are heading down,” said Rodriguez, saying the apartment-building foreclosure rate now is a relative trickle compared to a few years ago. There were 11,196 vacant apartments in the San Fernando Valley in July, compared with 11,902 in June, according to the city of Los Angeles Housing Department. A year earlier, there were 17,635 vacant apartments (representing an 8.5 percent vacancy rate), meaning the number of empty apartments fell by 36.6 percent. Rodriguez said the heightened demand for apartments in the Valley comes in concert with declining unemployment in the area. “During the recession, thousands of people without jobs left the area. Now many are coming back and need a place to live,” he said. As apartment vacancies decline, average rental rates are rising, he said. In fact, the San Fernando Valley’s average apartment rental rate as of June 30 was $936, up from $892 a year earlier, said Alex Rietmann, research analyst for the Sherman Oaks office of Grubb & Ellis Co.