Southern California Market Studies

Client

Housing Authority of the City of Los Angeles (HACLA)

Skills

Appraisal, Market Study – Affordable Housing

Project Description

Clarendon has been selected by the Housing Authority of the City of Los Angeles (HACLA) to provide Reviews of HUD Section 8 Rent Comparability Studies (RCS) for a ten-county area of Southern California.

Section 8 laws and administrative procedures require HUD to obtain and review Rent Comparability Studies (RCS) when initially renewing most Section 8 contracts and when processing some rent increase using the Annual Adjustment Factors. The market rents resulting from these studies determine the rents owners can receive and, hence greatly influence whether an owner will renew and continue providing assisted housing or opt-out of the Section 8 contract and convert to unassisted, market rent housing. The market rents set in these studies also drive HUD’s outlays for Section 8 project-based subsidy.

For more information on the market rent threshold test, read our article HUD Introduces New 150% Mandatory Market Rent Threshold Test.

Search the HUD FY 2025 Small Area Fair Market Rents (SAFMR) - these numbers will be effective for any Rent Comparability Study (RCS) signed by the owner’s appraiser on or after October 1, 2024.

Market Overview

Los Angeles remains a global hub for culture, commerce, and innovation, attracting a diverse population and a steady stream of investment. As a city renowned for its creative industries, world-class institutions, and expanding infrastructure, it continues to evolve amid shifting economic and regulatory conditions. The upcoming decade is set to bring major international events, such as the FIFA World Cup and the Olympics, reinforcing LA’s status as a premier destination. However, the real estate market has undergone notable changes, particularly in the multifamily sector, as investors navigate new policies and shifting demand dynamics. While LA has historically been a stronghold for apartment investment and development, recent regulatory adjustments and market conditions have led to a recalibration of strategies, pushing investors to be more selective and adaptive.

Despite these challenges, certain submarkets, such as Downtown Los Angeles, have demonstrated resilience, supported by ongoing residential development and strong demand for urban living. The city’s long-standing adaptive reuse initiatives continue to contribute to housing supply by transforming older commercial buildings into residential spaces, ensuring that LA remains at the forefront of innovative housing solutions. Other areas, including South Los Angeles, present alternative opportunities due to their relative affordability and infrastructure improvements, attracting interest from investors looking for long-term potential. While the regulatory landscape has introduced new complexities, Los Angeles' cultural and economic significance remains firmly intact, offering opportunities for those with the insight and patience to navigate its evolving market.