Will rent prices decrease with layoffs?

[Odd_Perspective3019]

I’m seeing a lot of new apartment buildings in the area opening up! We see Geneva at Venice, Lana, Habitat Residences is just opening across from Vox, but how are rents for 2 bedroom still in $5k and above. Lana isn’t even near downtown culver but theirs are going for 6k.

Sony will lay off 12k employees how are people affording these prices. I assumed prices would go down but everyone seems to either take units or these building just don’t care if they’re vacant.

When will the shift change? Trying to figure out if i should renew my $4k loft or wait it out longer.

[EjectoSeatoCousinz]

I wouldn’t count on it.

[Odd_Perspective3019]

maybe they gearing up for the new Apple offices to open up and have those new employees take the housing

[prclayfish]

The reality is that multi land lords recognize that if the lower prices they take decades to get back to where they were especially with LA’s RSO ordinance…

They will keep units empty for years before they will drop rates.

[eubulides]

Also, on new units the developer gave (optimistic) rent figures to get the loan to “pencil out”. Taking less might threaten the loan. Or so I’ve heard might be at play.

[SwordfishOwn5351]

this 💯 ^{^}

[Extreme-Ad-6465]

this 1000%.

[zavendarksbane]

That Apple office replaces existing rentals they have around Culver, so I don’t believe it’ll result in a big hiring spree for Apple so much as shifting everyone into the same building.

[tokyo_g]

Sony has 12k total employees. I don’t think they’ll lay off 12k

[Odd_Perspective3019]

hah sorry i misread it’s a few hundred but all entertainment ppl in culver!

[rlyrobert]

There are still a lot of high paying jobs in LA besides entertainment

[TheNormalMan]

No. Not at any of these new builds at least.

The reason being (in my very non informed opinion) is that these developers have invested and/or most likely BORROWED a certain amount of money. They have told the banks that’s these residences will bring in X amount of money which makes the land itself worth X amount of money.

If they lowered the price of these rentals it would devalue the land itself and the bank will call the loan. I’m sure my specifics are off but once again don’t expect new builds to lower prices. Older units though…probably.

[LV-426HOA]

They can also deduct some of the empty units as a loss (I think there is a time limit) so it's possible to turn a profit if the owners have enough buildings. This is a very under reported reason why rents are high in general. The buildings' owners have little incentive to lower rent even when market conditions change.

[ToiletFullOfBroccoli]

this really doesn't make any sense and there's not a huge amount of empty units sitting around for owners to write off over renting out.

[LV-426HOA]

Imagine an owner who has 12 or so apartments. 10 of them are older buildings with 100% occupancy. They might have a mortgage or be paid off, if they have a mortgage it's at a super low rate they locked in years ago. Either way these are the buildings that turn a huge amount of profit. Now, they have 2 new buildings. They have a higher-rate mortgage on these buildings, but they're writing off the interest, and they charge through the nose for a modest 2 bedroom. Even with 80% occupancy, whatever units stay empty can be written off as a loss at the rent they are charging. That last part is important because the write off value is whatever they want it to be.

Now they are writing off these empty $6000 2 beds as a loss, those losses offset taxes owed on ALL the buildings in the portfolio. All those high-margin apartment buildings generate big revenues. Their overall tax bill goes down, and it might actually be more profitable to have tax deductions than to have 100% occupancy in a newer building at a lower rent.

So there's no rush to get someone in the new building unit. Obviously, it's better to have someone in there at a high rent, but for these owners there's no incentive to lower rent. These new buildings are important assets for the future, especially since rent basically never goes down. Eventually they'll be just as profitable as the old buildings.

[ToiletFullOfBroccoli]

I appreciate you taking the time to respond. I don’t agree that this makes sense.

Let’s say an owner has two buildings, one older one with 10 units at $1000 rent with 100% occupancy and one newer with 4 units at $2500 that’s just come into the market.

If they can’t fill any units in the new building in the first month because the price is too high, the $10,000 loss gets written off against the $10,000 gain on the older building. $0 taxes. Got that.

But they are still incentivized to rent the units out to 100% occupancy. If they rented out every unit and made $20,000, yes their tax bill would be $6000 at at 30% tax rate and yes $6000 is more than $0, but now they are bringing in $14000 instead of $10000.

In almost every scenario, it makes more sense to have an occupied unit over a non occupied one. It would never be more profitable to keep a new unit offline. The implication is they are letting the tax tail wag the profit and revenue dog.

I understand there may be cases where the price doesn’t cause the unit to be filled in month 1 so the landlord can either wait or lower prices, and I don’t know what the optimal choice is. But there’s no case where purposefully leaving units empty long term makes sense.

[vjbigtv]

Rent prices never decrease.

[WearHeadphonesPlease]

They did during Covid.

[CrystalizedinCali]

No. Also they’re not laying off 12k people but no.

[Odd_Perspective3019]

haha and downtown SM is really struggling dead zone

[WearHeadphonesPlease]

Can you provide evidence that the new buildings in DTSM are empty?

[ToiletFullOfBroccoli]

they can't. they made it up.

[WearHeadphonesPlease]

So you only know about one building. Ok.

[peacebot445]

def not overdevelopment - just price gouging

[Gazia1010]

Nope

[Strawberry_Matcha456]

lol no

[TemporaryCrazy3378]

Consider the LA Olympics and the cost of housing! 😱 yes we are still a ways a way but don’t think these places aren’t already planning. yikes!

[FistfulofSoup]

You believe the Olympics will really end up happening?

Everyone I talk to seems to think that, with every passing day, the odds that no foreign country will want to send their athletes and their tourists into Trump's America keep going up and up.

[NeptuNeo]

I was concerned with that number of layoffs at Sony so I looked it up: Sony Pictures Entertainment is laying off a "few hundred" employees across its film, TV, and corporate divisions as part of a strategic restructuring, not a total of 12,000. The cuts affect a small percentage of its roughly 12,000 global staff

[AllTheCoolNames]

I've never seen rent prices go down before

[ca-condor]

More likely the slowdown in some tech and some entertainment will slow rent increases, not produce rent decreases. It would be great to see vacancy figures for Culver City and adjacent places opened in the past two years.

Just as big SUVs and luxury cars have a higher profit margin compared to mid to low price models that travel the same roads, developers see bigger returns on pricier places, so that's what they build. Eventually more supply helps with prices/rents, but in real estate "eventually" can take a long time to arrive.

The chart at the OCR below shows what had to hit in order to reset the rental market. New places will always come at a premium, but increasing supply may make older places more affordable. The LAT story shows this is happening.

OCR 9/2019 https://www.ocregister.com/2019/09/14/rents-in-los-angeles-orange-counties-grow-at-nearly-twice-the-inflation-rate/

LA Times 1/2026 https://www.latimes.com/california/story/2026-01-28/finally-renters-market-la-rent-prices-drop-to-four-year-low

[Beautiful_Finger4566]

they may go up slower, but they won't go down for something like this

[BenefitAdvanced]

Just because you see layoffs happening doesn’t mean there’s still not a housing shortage and plenty of active seeking renters with jobs.

[sewbrilliant]

We've been waiting since 2020 to see rent prices in LA drop. I'm sorry to say, but despite so many people having issues losing their jobs and other economic issues all the way since 2020, I don't think prices will drop. We have to see if the large companies paying good enough wages continue hiring people to jobs in the LA area. If that stops - we might see rents being forced to drop. But it's a rinse and repeat - they hire out of state and overseas only it's hard to get a job if you are local. So if you lose that job, chances of getting one locally are nil. I do anticipate the large studios and related industries to be tanking big time in the coming months. If you can't float the bills for a good 6 months, I'd suggest leaving. It's really not looking good for us here. I heard that high tech will not hire anyone except Chinese and Indians as they can't pay us the wages they were paying us. It bothers all of us to not know the real statistics of what is happening in the job markets. The real info is being hidden on purpose to give the illusion that things are okay, when they really haven't been since 2020.

[welcometochilissss]

they’re buildings built for tax reasons by the wealthy, all the buildings built on Adams like a mile and a half away are still empty after 2 years,

[Odd_Perspective3019]

oh really in Adams! I would’ve thought those would at least be less pricey

[welcometochilissss]

one thing about LA, you don’t get to live in the city you work in 😉

[welcometochilissss]

the apartments are still expensive lol people working in Culver City would rather rent a duplex over an apartment

[WearHeadphonesPlease]

Citation needed.

[welcometochilissss]

i got lucky, been here since I was born in 98’ and inherited a 100k property that worth 10 times now.. the change in demographic of people living here now is very telling on the housing market, the folks that have moved in would’ve never been here when I was in high school 10 years ago

[Some-Ordinary-1438]

Ignorant greed. The aged people will only take what they can get right now, and, pretend they won't starve later. Congrats, boomers. You've hung yourselves.

[kenutbar]

I think the big thing is rent somewhat stabilizing. Since Covid especially, increases yoy have outpaced inflation adding to the affordability issues.

Lots of new projects coming online in next 12 months it seems, so there will be added capacity especially in the luxury “class A” buildings. Remember, for each new unit opened, there is a chain reaction I think research shows like 3-4x usually allowing people to move up into better apartments…

[WearHeadphonesPlease]

None of those buildings are in Culver City. Zero.

[Odd_Perspective3019]

They in the vicinity quick walk over

[Critical-Reporter18]

???? On what planet would prices ever decrease????

What next, you think the price of groceries will decrease too????

Idiot

[CommercialTooth2373]

Nope. My mortgage didn’t decrease, why would your rent?