Nearly all of the new residential towers and low-rises popping up around Downtown Long Beach are almost full—and it happened fast.

Even with the relatively high prices compared to the rest of the city, the new skyscrapers and high-end residential buildings have had no problem finding tenants. In fact, according to the Downtown Long Beach Alliance’s most recent economic profile, the 22 properties built in the area since 2000 were already 93% full. Out of 3,492 new units listed, only 242 were unoccupied.

Even one of the newest buildings, the 432-unit Onni East Village, which just opened this February, is already 50% full, Austin Metoyer, president and CEO of the Downtown Long Beach Alliance, recently told me.

“People are moving into Downtown to fill these residential buildings that are going up,” Austin said.

The Magnolia building, which opened last May, was almost half full in only three months, with 46% of its units rented out by July of that year. That building now sits at a 96.5% occupancy rate with 137 of 142 homes leased.

Even the Shoreline Gateway tower, with some of the highest rents in the city, is almost 90% full.

Part of why there’s so much demand for new housing now is because the city hasn’t seen enough construction to keep pace with demand for the last 30 years. Between 1991 and 2016, the city of Long Beach never permitted the construction of more than 1,000 new homes in a year, which is thousands less than the state said were needed to keep up with housing needs.

That lack of excess housing, of course, had a direct impact on rising rents.

“The biggest driver of rents next quarter is vacancy in the previous quarter, so when vacancy is low, rents go up,” said Richard Green, director of the Lusk Center and co-author of the 2022 Casden Multifamily Forecast Report.

But studies have shown that adding supply, even on the high end of the market, helps prevent rents from growing.

“Most people believe there are separate markets for new ‘luxury’ apartments, single-family homes, and lower rent, older buildings,” said Shane Phillips of the UCLA Lewis Center for Regional Policy Studies. But, “Research shows these are all part of the same market, and when you change one part it affects the whole market.”

“A new apartment building [even] in a lower- or middle-income area, leads to lower rent growth in surrounding buildings because of increased competition,” Phillips said, echoing the report from the Center he authored in 2021.

And, he said, “Not building housing doesn’t stop people from moving to a place.”

“People imagine because market-rate units are expensive that people are coming from somewhere else, but we have lots of rich people here,” he said. “People have kids, people graduate, people want to move out and get their own space. If we don’t create those spaces there’s just more demand for a fixed stock of housing.”

This means all the new units built in the past few years have likely helped insulate existing buildings from rent hikes, even as we’ve attracted hundreds of new high-paying jobs in the aerospace and health care sectors.

In fact, rent prices are down 5.1% in Long Beach citywide after the construction of more than 1,200 new units in 2021 and 2022. As long as buildings are filling up, the best way to stop runaway rent growth could be with more construction. And with a state mandate to plan for more than 26,000 new homes in Long Beach by 2029, there’s sure to be more developments on the way.

“We’re gonna have somewhere between 1,500 to 2,000 units come online in the next few years,” Metoyer, the DLBA CEO, said. “And that could bring down some of these rents that we’re seeing because of the additional supply.”

Already in the pipeline are more than 1,000 new homes in the Southeast corner of the city near 2nd & PCH; a 900-unit development set to replace the former City Place shopping center on Fourth Street downtown; the 189-units that are almost finished along Broadway and the Promenade; a 23-story building on 3rd and Pacific that will have 271 units; and now a potential 21-story building that could replace the former Long Beach Cafe with more than 200 homes is headed for a planning commission vote in November.