Kitty Wallace says Los Angeles apartment owners face a choice that's starting to define one of the country’s most difficult multifamily markets: flee California or stay and help influence rental policy that can make or break a deal.
The Colliers broker, one of Southern California’s best-known multifamily investment sales specialists, is turning part of her attention from selling apartment buildings to helping landlords understand how public policy is reshaping the value of owning them.
“There are two options,” Wallace said. “Option one is you can pack up and leave and go the way others have and move to Texas, Tennessee, Florida. That’s not what I want to have happen.”
Her shift underscores a broader reckoning across Los Angeles multifamily real estate, where rising costs, limits on raising rents, restrictions on evicting non-paying tenants and taxes affecting rentals have pushed some owners to rethink whether the region’s high barriers to entry are still worth the trouble.
That pressure is showing up in market fundamentals. CoStar data shows Los Angeles apartment sales have begun to recover but remain below their long-term average, with pricing still down significantly from recent peaks. At the same time, vacancy has risen across higher-end units and rent growth has stalled, reflecting a market where landlords have limited pricing power despite persistent housing shortages.
Wallace has spent nearly three decades building a career around Los Angeles apartments, closing more than 500 transactions exceeding $4 billion in value while becoming a familiar voice on land sales, redevelopment sites, rent growth and investor appetite.
Now, she says the next phase of the market may depend less on who can underwrite the next deal and more on whether housing owners can show up at City Hall meetings and ballot campaigns to influence the rules that often determine profit.
Building a career
Wallace entered commercial real estate in 1997 and built her career in a Los Angeles apartment market where the best opportunities were rarely simple.
She specialized in multifamily investment sales, land development, condominium conversions, student housing and affordable housing across California and the West Coast.
Before joining Colliers in 2010, Wallace was a senior vice president at Sperry Van Ness, where she ranked as the company’s top multifamily adviser and top rolling agent across all property types nationwide.
At Colliers, she became one of the brokerage’s most recognizable multifamily voices in Southern California, known for translating neighborhood-level apartment trends into investor strategy.
Her work has included deals for older rent-controlled properties, development sites, coastal apartment buildings, affordable housing assets and land transactions where the value depends as much on entitlement risk as square footage.
In one recent example, she helped reframe a long-stagnant downtown Los Angeles property for investors, leading the $9.5 million sale of the Oviatt Apartments by positioning it as a longer-term redevelopment project in a challenging market.
That mix has made Wallace a kind of market interpreter for landlords trying to understand whether a two-story walk-up should remain a family-owned rental building, become a redevelopment site or be sold before the next policy change alters the math.
Market turning point
For years, Los Angeles apartment owners benefited from the same imbalance that made the market so hard to enter: there was never enough housing, and building more of it was slow, expensive and politically complicated.
The pandemic changed the tone of that relationship, Wallace said, as new rules and other changes made owners feel they were losing control over properties they had held for decades.
“COVID came and all of a sudden we can’t raise rents, we can’t evict our tenants, costs are going up and we can’t pass them through,” Wallace said.
The data reflects that shift. Vacancy in Los Angeles has climbed in recent years, particularly among higher-quality units facing a surge of new supply, while rent growth has barely moved since 2022, according to CoStar data. Sales activity has picked up modestly, but pricing remains well below peak levels, underscoring how both operating conditions and investor expectations have weakened.
That pressure is colliding with a supply problem that remains visible across the city: small, older buildings sit on lots that could hold more apartments, but replacement requirements, deed restrictions and construction costs often make redevelopment uneconomical.
She said opponents of development and landlord-friendly policies have long understood the power of showing up at hearings, funding advocacy and explaining that the people who own housing are also the people expected to maintain, finance and create it.
Apartment owners, by contrast, have often reacted late, especially smaller private landlords who lack the government affairs teams available to large institutions.
Wallace has used her network built over 27 years in the business to send alerts, connect clients with apartment associations and encourage owners to participate when local governments consider policies that could affect their business.
One example came as local officials weighed stricter rent regulations that would have limited how landlords reset rents between tenants. Wallace said she mobilized her network with email alerts and calls, connecting owners with apartment associations and urging them to show up at hearings where housing policy was being debated.
“Education goes a long way,” Wallace said. “The vast majority of the landlords are committed to serving their residents and maintaining quality.”
The goal, she said, is not to turn every apartment owner into a political operative, but to make sure policymakers hear from the people who know what it costs to repair an aging building, finance a new one or decide whether to keep investing in Los Angeles at all.
For Wallace, the stakes are bigger than any single sale: If Los Angeles wants more housing, she argues, the region has to make sure the people willing to build it still believe the city wants them there.