Inflation and Rising Costs Won’t Slow Multifamily Momentum | Winter 2025

Vacancy rates across the state are showing improvement, particularly in San Francisco, which reflects California’s housing shortage. Demand also remains strong, and supply is growing, suggesting confidence in the sector despite rising labor and construction costs. In light of the recent California wildfires, future development is likely to increase further as displaced homeowners seek temporary apartment housing. Hybrid work models continue influencing multifamily development and design as tenants seek flexibility and social connectivity in their living arrangements. Allen Matkins’ Jennifer Jeffers, senior counsel, and Partner Spencer B. Kallick discuss the demand for new development, the trend toward smaller and larger units, and the impact of recent return to work mandates in the Winter 2025 Allen Matkins/UCLA Anderson Forecast California Commercial Real Estate Survey.