Freddie Mac Forecasts Rising Multifamily Financing in 2025, But Rent Growth Remains Sluggish

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As 2025 begins, the multifamily housing market is expected to see an increase in financing activity, but property owners should prepare for continued challenges related to rent growth and rising vacancies. According to Freddie Mac’s latest 2025 Multifamily Outlook, total multifamily originations are projected to reach between $370 billion and $380 billion, marking a rebound from the estimated $320 billion in 2024.

While this increase reflects factors such as postponed transactions, loan maturities requiring refinancing, and stabilization in property values, origination volume will remain below the record highs of 2021 and 2022. For rental housing providers, understanding these trends will be crucial in shaping investment strategies, pricing decisions, and tenant retention efforts throughout the year.

Multifamily Rent Growth and Vacancy Trends

Despite improved financing conditions, rental income is expected to grow at a modest 2.2% in 2025, which remains below the long-term historical average of 2.8%. At the same time, vacancy rates are projected to rise to 6.2%, exceeding the long-run average of 5.5%.

In California, market performance varies significantly by region:

  • San Francisco is expected to see 3.2% rental income growth, indicating stronger demand compared to other metros.
  • Oakland and Orange County are projected to experience slower growth, with 1.4% and 1.5% rent increases, respectively.
  • Riverside is forecasted to perform well, with 3.1% rental income growth, making it one of the strongest markets in the state.

Financing Conditions and Market Adjustments

While more financing opportunities are expected, multifamily interest rates remain high and volatile, influencing refinancing and investment decisions.

  • Cap rates have remained relatively stable, fluctuating between 5.6% and 5.7% throughout 2024.
  • However, they are still below the long-term average, limiting price adjustments for property owners looking to sell or refinance.

One of the most significant factors affecting rental housing providers is regional supply differences.

  • California markets tend to have lower supply ratios compared to the Sun Belt and Mountain West, where new apartment developments have reached record highs.
  • Los Angeles and San Francisco are among the cities with some of the lowest supply ratios, helping maintain stronger occupancy rates.
  • By contrast, oversupplied metros like Austin and Phoenix are seeing higher vacancy rates and slower rent growth.

What This Means for Rental Housing Providers in 2025

With financing conditions improving but rent growth lagging, property owners need to adapt their strategies to stay competitive. Key takeaways include:

  • Rent growth will remain positive but below historical averages, requiring landlords to adjust rental pricing expectations.
  • Vacancy rates are expected to rise, making tenant retention strategies essential to maintaining steady cash flow.
  • Interest rate stability may encourage more transactions, though financing costs remain a challenge.
  • California’s rental markets may see relatively stronger occupancy rates, given limited new supply compared to high-growth metros.

Maximize Your Rental Investment in 2025

Understanding market shifts is essential for protecting and growing your rental investment. At Real Property Management Select, we help property owners navigate changing market conditions with expert property management solutions, proactive tenant retention strategies, and data-driven pricing recommendations.

Stay ahead of the market. Contact us today to learn how we can help you maximize your rental income and reduce vacancy risks in 2025.

California Proposes Cooling Standards for Rental Housing: What Property Owners Need to Know

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As extreme heat events become more frequent and intense, California lawmakers are revisiting the idea of mandatory cooling standards in rental housing. The California Department of Housing and Community Development (HCD) has released a 60-page report urging state legislators to establish a maximum safe indoor air temperature of 82°F for residential units. If implemented, this measure could reshape landlord responsibilities and tenant rights across the state.

While this proposal aims to protect public health, it also raises concerns about the financial burden on property owners, particularly those managing older rental units that may require costly upgrades.

Why Cooling Standards Are Being Proposed

Extreme heat is now one of the deadliest climate-related threats. The Centers for Disease Control and Prevention (CDC) reports that approximately 1,220 people die from heat-related illnesses every year in the U.S. In California, where heat waves are becoming longer and more severe, projections suggest that heat-related deaths could rise to 11,300 per year by 2050 if no action is taken.

Unlike heating, which is legally required in rental units, California does not currently mandate air conditioning or any other cooling system. This regulatory gap has left many tenants—especially those in older buildings—vulnerable to dangerous indoor temperatures during heat waves.

Key Provisions of the Proposed Cooling Standards

The HCD’s recommendations focus on both existing rental properties and new construction.

For Existing Rental Units

  • Landlords would need to implement cooling solutions such as:
    • Central air conditioning
    • Window AC units
    • Evaporative coolers
    • Fans and improved ventilation
    • Window shading and other heat-mitigation measures

For New Construction

  • Future residential developments would need to incorporate:
    • Cool roofs and cool walls to reflect sunlight
    • Landscaping elements designed to provide natural shade
    • Energy-efficient building materials to regulate indoor temperatures

These measures would make California’s cooling standards among the most comprehensive in the nation, aligning with efforts already in place in cities like Phoenix, Dallas, and New Orleans.

Concerns from Property Owners and Housing Providers

While the public response has been largely supportive, property owners and real estate groups have raised concerns about the financial impact of these regulations.

Cost of Compliance

Many California rental units—especially in cities like Los Angeles, San Francisco, and Sacramento—are housed in older buildings that lack central AC and require major electrical upgrades to support new cooling systems. Retrofitting these properties could be prohibitively expensive, with costs ranging from several thousand to tens of thousands of dollars per unit.

Risk to Small-Scale Landlords

Daniel Yukelson, CEO of the Apartment Association of Greater Los Angeles, has warned that without financial incentives, many small rental property owners could struggle to afford these upgrades, potentially leading to:

  • Higher rents as landlords pass costs onto tenants
  • Reduced rental inventory as struggling owners sell off properties
  • Increased consolidation of rental housing by large corporate investors

To address these concerns, the HCD’s report recommends lawmakers create financial assistance programs—such as tax incentives or grants—to help landlords upgrade their properties without forcing rent increases on tenants.

Will the Proposal Become Law?

The future of these cooling standards remains uncertain. Previous efforts to pass similar legislation have stalled, largely due to cost concerns and pushback from property owners. However, the issue is gaining momentum:

  • A 2023 poll by UC Berkeley’s Institute of Governmental Studies found that 67% of California voters support statewide cooling regulations.
  • The Los Angeles County Department of Public Health recently highlighted that heat-related deaths rise by 10% on hot nights, underscoring the urgency of action.
  • Cities like Los Angeles and Sacramento are already exploring their own local cooling mandates for rental properties.

If passed, these regulations would represent a major shift in California’s rental housing market, forcing landlords to adapt to new building and maintenance requirements.

What’s Next for Property Owners?

As legislators debate the cooling proposal, property owners should:

  • Stay informed on the latest updates from the California Department of Housing and Community Development.
  • Assess their properties to determine potential compliance costs.
  • Engage with lawmakers and local rental housing associations to voice their concerns and seek solutions.

At Real Property Management Select, we help landlords navigate evolving rental regulations while ensuring compliance and profitability. For ongoing updates on California’s housing policies and expert property management services, contact us now.

Do you think cooling standards should be required in California rentals? Let us know your thoughts.

Concord’s Rent Control: What’s Changing?

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The Concord City Council is gearing up for another round of discussions regarding potential changes to the city’s rent control ordinance.  Mark your calendars for Tuesday, February 25, 2025, as this meeting could significantly impact both renters and landlords in Concord.  The council has already dedicated nearly four hours to public input earlier this month, demonstrating the importance of this issue to the community.

 

So, what’s on the agenda?  Two key topics are taking center stage:

 

  1. Rethinking the Rent Cap: Concord currently has one of the strictest rent control formulas in California.  The council is exploring adjustments to this formula, aiming to strike a balance between protecting tenants from excessive rent increases and ensuring landlords receive a fair return on their investments.  This delicate balancing act is crucial for maintaining a healthy rental market in Concord.
  2. Exemptions for Homes and Condos?  Another hot topic is the potential exemption of single-family homes and condominiums from the city’s “just cause” eviction regulations.  The council is considering arguments that these types of properties might require different rules compared to larger apartment complexes.

 

A Quick Recap: Back in March 2024, Concord introduced the Residential Tenant Protection Program, bringing in rent stabilization and expanded “just cause” eviction protections.  The goal was to create more stability in the community and prevent displacement while still allowing property owners to make a reasonable profit.  However, the program faced some bumps in the road, including a temporary suspension due to a proposed referendum.  Now, with the ordinance active, the council is revisiting specific parts to address concerns from both sides.

What Does This Mean for You?  The decisions made on February 25th could bring significant changes to Concord’s rental landscape.  Whether you’re a tenant worried about rising rents or a landlord trying to navigate complex regulations, it’s essential to stay informed.  These discussions could affect everything from how much rent can be increased to the eviction process itself.

Want to Get Involved?  The City Council meeting on February 25, 2025, is open to the public.  Your voice matters!  Attending the meeting and sharing your perspective can help shape the future of housing in Concord.  For more detailed information on the Residential Tenant Protection Program and upcoming meetings, be sure to visit the City of Concord’s official website.

Need Help with Property Management?  Dealing with rent control and the ever-changing regulations can be a headache.  If you’re a landlord looking for stress-free property management in Concord, we can help!  Contact us today to learn how we can help you stay compliant, manage your properties effectively, and maximize your investment.  We’ll handle the complexities so you don’t have to.

The Most Common Rental Maintenance Issues & How to Prevent Them

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Owning a rental property is a great investment, but it comes with the responsibility of maintaining the home for both long-term value and tenant satisfaction. Proactive maintenance can prevent costly emergency repairs, reduce tenant turnover, and protect your rental income.

In this guide, we’ll cover the most common rental maintenance issues landlords face and provide practical tips to prevent them.

1. Plumbing Issues in Rental Properties 

Common Problems:

  • Leaky faucets and running toilets
  • Clogged or slow drains
  • Burst pipes (especially in winter)

How to Prevent Plumbing Repairs:

✅ Schedule routine plumbing inspections.
✅ Educate tenants on what not to flush (e.g., grease, wipes, and coffee grounds).
✅ Install drain covers and regularly clean them.
✅ Insulate exposed pipes in colder months to prevent freezing.

2. HVAC System Failures

Common Problems:

  • AC or heater not working efficiently
  • Clogged air filters reducing airflow
  • Thermostat malfunctions

How to Prevent Costly HVAC Repairs:

✅ Replace air filters every 1-3 months.
✅ Schedule professional HVAC servicing twice a year (spring and fall).
✅ Keep outdoor AC units free from leaves and debris.
✅ Educate tenants on how to adjust thermostat settings properly.

3. Electrical Issues in Rental Homes

Common Problems:

  • Flickering lights
  • Circuit breakers constantly tripping
  • Non-functional outlets

How to Prevent Electrical Hazards:

✅ Have a licensed electrician inspect wiring every few years.
✅ Ensure tenants aren’t overloading outlets.
✅ Upgrade outdated electrical panels when needed.
✅ Install GFCI outlets in kitchens and bathrooms for safety.

4. Appliance Malfunctions 

Common Problems:

  • Refrigerators, dishwashers, or washers breaking down
  • Stoves and ovens failing to heat properly

How to Extend the Life of Appliances:

✅ Provide tenants with an appliance care guide.
✅ Schedule periodic maintenance and deep cleanings.
✅ Replace aging appliances before they become unreliable.
✅ Encourage tenants to report small issues before they get worse.

5. Roof Leaks & Gutter Problems 

Common Problems:

  • Roof leaks leading to water damage
  • Clogged gutters causing foundation issues

How to Maintain Roofs & Gutters:

✅ Inspect the roof annually for damage.
✅ Clean gutters twice a year (fall and spring).
✅ Trim overhanging tree branches to prevent damage.
✅ Repair small leaks before they cause major problems.

6. Pest Infestations in Rentals 

Common Problems:

  • Rodents, ants, cockroaches, and termites
  • Bed bugs from tenant belongings

How to Prevent Pest Issues:

✅ Seal cracks and gaps around doors/windows.
✅ Schedule routine pest control inspections.
✅ Educate tenants on food storage and cleanliness.
✅ Fix water leaks promptly (moisture attracts pests).

7. Mold & Mildew Growth 

Common Problems:

  • Mold in bathrooms, basements, and ceilings
  • Musty odors from excess moisture

How to Keep Your Rental Mold-Free:

✅ Install proper ventilation in bathrooms and kitchens.
✅ Address plumbing leaks immediately.
✅ Use mold-resistant paint in high-moisture areas.
✅ Provide dehumidifiers if needed.

8. Exterior & Landscaping Issues 

Common Problems:

  • Overgrown landscaping
  • Cracked sidewalks creating trip hazards
  • Poor drainage leading to foundation issues

How to Maintain the Exterior of Your Rental:

✅ Keep pathways clear of debris for tenant safety.
✅ Schedule seasonal landscaping maintenance.
✅ Ensure proper drainage to prevent water damage.
✅ Check fences and outdoor structures for stability.

Why Preventative Maintenance Matters for Landlords

Proactively addressing maintenance issues in rental properties helps:
 ✔️ Reduce emergency repair costs.
 ✔️ Keep tenants happy and increase lease renewals.
 ✔️ Protect the long-term value of your investment.

If you’re a landlord looking to minimize maintenance headaches and keep your rental in top condition, consider working with a professional property management company.

At Real Property Management Select, we handle rental maintenance, inspections, and emergency repairs so you can enjoy stress-free property ownership.

Need Reliable Property Management in Roseville, Fairfield, or Sacramento?

📞 Call us today to learn how we can help you maintain your investment with ease!