Southern California renters should brace for higher bills no matter where they live, but nowhere will the climb be steeper than the Inland Empire, according to a forecast the University of Southern California released Tuesday. Riverside and San Bernardino counties, treated together as a single Inland Empire market in the forecast, are projected to see average annual rent growth of 2.4% over the next three years — the fastest pace among five Southern California markets studied.
The Inland Empire's average rent stood at $2,150 in June, the lowest of the markets USC examined, and is projected to climb to $2,309 by June 2029, according to MyNewsLA.com. The region's vacancy rate was 6.47% in June and is forecast to fall to 5.83%, a tightening that typically puts upward pressure on rents. USC's Casden Real Estate Economics forecast does not break out separate figures for Riverside and San Bernardino counties individually, the outlet notes.
Construction has played a real role in keeping that growth in check so far. The Inland Empire added 12,300 rental units over the past three years, expanding its apartment stock by about 7% — the fastest supply growth among the five markets — with Class A apartments making up 32% of that new supply and most of the rest landing in the midrange Class B category. That building helped moderate rent growth to nearly 1%, per the same report. But the pipeline is drying up: construction starts in the Inland Empire have fallen 60% from their 2024 peak, a trend that could remove the brake on future rent increases.
San Diego County's Building Boom Buys Some Breathing Room
San Diego County offers a parallel case study in how new supply can blunt rent pressure, at least temporarily. The county's average rent was $2,592 in June and is forecast to reach $2,707 by June 2029, a projected annual growth rate of 1.5%, according to KPBS Public Media. San Diego has added roughly 16,000 apartments since late 2023 — about twice the new supply Orange County added over the same stretch — and the forecast credits increased density and the county's Complete Communities initiative with helping it keep pace with housing demand.
Midrange Class B units made up about 34% of San Diego County's recent apartment deliveries, the station's report notes. The county's vacancy rate, 6.31% in June, is expected to fall to 4.9% as those recently built units get absorbed. Even so, the forecast warns that slower deliveries ahead could threaten the affordability gains the county has made, citing persistent inflation, elevated interest rates and high construction costs as obstacles to further building.
Separate reporting underscores just how unusual San Diego's recent building pace has been. The county built 6,927 apartments in 2025, the highest annual total in 25 years of data cited by The San Diego Union-Tribune. CoStar figures cited in that report put San Diego's rent at $2,587 a month as of late October, up 1.2% year over year, though CoStar's Joshua Ohl said heavy competition from new supply made large rent increases unlikely in the coming year. CoStar figures cited in that report put 3,670 apartments on track to open in the county in 2026.
Los Angeles, Orange and Ventura Counties Lag on Supply
Los Angeles and Orange counties, by contrast, face what USC's forecast describes as an ongoing apartment shortage. Los Angeles County's average rent was $2,362 in June and is projected to reach $2,469 by June 2029, with annual growth forecast at 1.4% — the slowest pace of the five markets. The county's vacancy rate was 5.6% in June and is forecast to tighten to 4.87% as available units get absorbed, per the MyNewsLA.com report.
Orange County's average rent was already the highest among the five markets studied, at $2,792 in June, and the forecast projects it will reach $2,946 by June 2029 on 1.9% annual growth. Annual new housing deliveries in Orange County are forecast to decline 40% over the next three years. Ventura County is projected to see 2.2% annual rent growth, the second-fastest pace behind the Inland Empire. USC's forecast describes Los Angeles, Orange and Ventura counties as remaining chronically undersupplied.
There is a modest bright spot in Los Angeles County: apartment permits ran 60% above the prior year's monthly average during the first half of 2026. But the forecast cautions that how many of those permitted projects actually get built remains unclear given labor, material and financing costs.
A Shortage Decades in the Making
USC associate professor of real estate Moussa Diop, who teaches at the USC Sol Price School of Public Policy, frames the region's rent trajectory as a solvable problem rather than an inevitability. “Southern California’s housing shortage is a problem we created, but it is also a problem we can solve,” Diop said. He pointed to San Diego and the Inland Empire as evidence that building more housing works, though he cautioned that meaningful affordability gains take time and sustained development.
Diop's broader point is blunt: “Housing cannot be affordable unless we have plenty of it.” The forecast places California's housing struggles in a national context, noting that the state's housing stock grew at less than half the rate of Texas, Florida and Arizona between 2015 and 2025 — a gap that helps explain why rent growth, even when moderating, keeps outpacing what many renters can absorb.
A Consumer Price Index analysis cited by the Orange County Register describes Southern California rent hikes as moderating, offering a measure different from USC's three-year growth projections.
