Affordable housing rent growth has seen two strong quarters back-to-back, says Moody’s Analytics REIS.

The growth for the third quarter finished at 0.7%. This increase, along with the momentum of the second quarter that posted the strongest rent growth in two years, has increased the Moody’s growth projection for 2021 from 2.2% to 2.5%

Year-end average rent is now expected to be $999.

During the third quarter, vacancies in the affordable housing sector fell 0.1% to 2.4%.

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The Moody’s analysts said inventory growth during the period was 0.5% (6,598) units.

“This falls short of the third quarter completion average going back to 2016, which has been just over 8,000 units. Since 2021 has so far had a slightly slower construction pace than usual, the projected finish has been lowered from 40,000 to 38,000 completions,” the report noted.

The authors pointed out Los Angeles is having discussions that would dramatically change the landscape of its affordable housing sector.

“Recently the Los Angeles City Council voted to search for ways to increase affordable housing options in neighborhoods with greater access to parks, public transit, schools, grocery stores, and health facilities, as currently only 14% of affordable housing units built in the last decade were in high resource areas as opposed to 86% that were built in low resource areas,” Moody’s said.

Additionally, LA’s Department of City Planning and the Housing Department will be working on development incentives to increase the supply of quality affordable housing in those neighborhoods by over 250,000 new units over the next three years.

In the second quarter, the affordable housing sector posted the largest quarterly rent growth since the third quarter of 2019, in a sign Moody’s Analytics analyst David Caputo says suggests the sector “might have fully recovered” from the pandemic’s effects.

In that quarter, Pittsburgh led the sector for rent growth. Caputo noted that Mayor Bill Peduto secured $115 million in contributions from Pittsburgh’s four largest nonprofits to fund measures, one of which includes affordable housing.