Welcome to the crisis: Your frequently asked California housing questions answered
Los Angeles Daily News (in a CALmatters story) quoted Richard Green of the USC Lusk Center about the California housing crisis and what a healthy vacancy rate would be for rental units.
Vacancy rates are kind of like unemployment rates or even inflation, says Richard Green, director of the University of Southern California’s Lusk Center for Real Estate. There’s an ideal equilibrium above zero that kind of keeps things in economic order and indicates appropriate levels of supply and demand. Renters on average leave their apartments every two years, often for new jobs or to enter the single-family market as homeowners. This is healthy and normal.
“Here’s where your eyes can be deceiving,” says Green. “Think of the hundreds of units that there are in Westwood for example, around UCLA. There’s hundreds and hundreds and maybe thousands of rental units, so even if you have a 3 percent vacancy rate, you’re going to see a ‘for rent’ sign.”
More to the point, landlords rarely have a rational financial interest in keeping a rental on the market for too long. “You have to remember, if you lose a month of rent, that’s 8 percent of your annual revenue gone,” says Green.