Los Angeles multifamily construction cools after a decade of record growth

Annual number of units under construction and new construction starts hit 10-year lows

By Catherine Yeh

CoStar Analytics

October 8, 2025 | 8:12 AM

The Los Angeles multifamily supply pipeline is experiencing a deceleration following an extended period of heightened activity. Over the last 10 years, net deliveries averaged approximately 9,900 units annually, which is more than double the previous decade’s average (2006-2015) of 3,900 units per year. Similarly, the average number of units under construction each year reached around 101,000 in the past decade, nearly three times the 36,000-unit annual average reported between 2006 and 2015.

Currently, 82,000 units are under construction, representing the lowest volume since 2016. Construction starts have declined by approximately 20% annually since 2022, with only 6,200 units started in the most recent 12-month period — the lowest figure observed since 2010. The reduced pace of supply will allow demand to catch up; over the last decade, about two units were built for every one renter. This imbalance has resulted in vacancy rates rising to 5.3%, which is the highest level recorded in the past 10 years excluding 2020.

The most active submarkets over the past decade have been Downtown Los Angeles, Koreatown and Hollywood, collectively accounting for 34% of overall market activity. These submarkets are more receptive to greater density and have ample obsolete locations that are ideal for redevelopment. Olympic+Hill, 685 units that were completed in July, is the seventh-largest project to be completed in the past 10 years and the largest in the past two years. Notably, seven of the 10 largest developments in the last 10 years were within the Downtown LA submarket.

Historically, four- and five-star units account for the majority of new developments, comprising 87% of all units under construction between 2015 and 2019, while three-star units represented approximately 12%. Since 2021, a shift occurred in which the number of four- and five-star units constructed dropped to 75%, with three-star units now accounting for 24% of construction activity. The growth in three-star projects commenced in 2022, with areas such as Downtown LA, East Hollywood, Culver City, Koreatown, Van Nuys and Westlake witnessing more than double the previous rates of three-star unit construction.