DTLA’s Multifamily Residential Market is Strong

The COVID epidemic of recent years did not do any favors for the downtown residential market.  With the city being largely cleared out by the necessity of remote work, residential and commercial real estate found itself in an unwelcome slumber.  During this period, it was hard to stay optimistic about occupancy growth in the city’s future.

However, according to a recent study by the DTLA Alliance, DTLA is back - and back big.  Consider this: the pre-COVID first quarter residential occupancy rate in 2019 was a strong 84.7%,  an occupancy rate that would be coveted by any large U.S. city.  However - in a recent study by the Alliance, the first quarter residential occupancy rate for 2025 clocked in at an amazing 90.8%, well above the previous pre-COVID high!  This statistic is even more significant when you realize that well over 2,500 residential living units have been added to DTLA over the past five years.  With the high residency rates, average rents are continuing to rise which will most likely stimulate additional residential development in the future when other economic conditions permit. 

There are currently over 90,000 full-time DTLA residents.  The study shows that of more than 1,200 residents asked, 35% of respondents plan to live in DTLA for the next six years or more and 20% of respondents have already spent between 11 and 19 years living in downtown. 

The study further indicated a growing positive outlook on living in DTLA.  “The average length of time that people have lived there and the average length of time that they expect they will live there have both gotten longer, so not only are people not leaving, they are more committed than ever,” summarized DTLA Alliance Executive Vice President Nick Griffin.  In addition, we are seeing more resident participation in civic and neighborhood activities which can only stimulate neighborhood development and cohesion.

Significant problems including the lack of workday foot traffic, small-business challenges, a still struggling office market, and the continuing perception that DTLA is unsafe will continue to be a question in the minds of potential future residents. 

The key to overcoming these issues may lie in getting more workers back in their vacant downtown offices.  Government workers made up a significant portion of the more than 600,000 pre-COVID daily commuters to DTLA. Governor Newsom recently called for a mandate of four days per week in the office for state workers. If this comes to pass, we could get more local government workers back in their downtown offices, resulting in a big turnaround in activity on the streets.  This would foster the return of support businesses that disappeared during the pandemic.

Source:  Downtown LA’s Multifamily Market has Surpassed 2019 Occupancy, Bianca Barragan, Bisnow.com.

 By John Nilsson