By SHELLY GARCIA
News stories suggest that the Southern California apartment market is booming, with median rents rising and vacancy rates shrinking. But if that's the case, why are there so many "Now Renting" banners hanging outside apartment buildings in places like Van Nuys and North Hollywood?
The answer might point to a coming crisis in portions of the San Fernando Valley.
Vacancy rates in Van Nuys, North Hollywood and some parts of the Northeast Valley are holding steady at about 9 percent nearly twice the rate of some other Valley communities along the hot Ventura Boulevard corridor.
The buildings in these slow-renting communities, initially intended to accommodate the swarm of newcomers who descended on the Valley in the 1950s and '60s, have now grown old, and they no longer meet the needs of today's apartment dwellers.
"It's not the young, new Valley anymore," said David Diaz, an environmental planner and lecturer in urban studies at Cal State Northridge. "The Valley is definitely reaching middle age structurally."
In Van Nuys and North Hollywood combined, 2,550 buildings of five units and more or 70 percent of the apartment properties were constructed prior to 1970. And unlike areas like Sherman Oaks, which received funds for renovation following the Northridge earthquake in 1994, buildings in Van Nuys and North Hollywood have gone without significant rehabilitation.
Not only do these buildings often lack amenities like laundry rooms and parking garages, the vast majority contain mainly studio and one-bedroom units, which makes them impractical for families with children.
"There's a mismatch" between available apartments and demand for housing, said Don Spivack, deputy administrator for the Community Redevelopment Agency of the city of Los Angeles. "There's very little vacancy in three- and four-bedroom apartments."
The Valley's earlier residents tended to be upwardly mobile singles and couples en route to becoming families and homeowners. Today, those groups have been replaced with low-income families for whom apartments are long-term housing solutions.
The high vacancy rates in Van Nuys and North Hollywood have driven apartment values down, despite rebounds in other communities, according to a report by Marcus & Millichap, a real estate company specializing in investment properties.
The average price per unit in multi-family dwellings in Van Nuys and North Hollywood fell about 8 percent between 1996 and 1997, to $32,404, the survey found. That compares with an overall increase in per-unit apartment prices of about 1 percent, to $42,168, for the entire San Fernando Valley.
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