A new report on the nation’s rental markets from real estate firm Marcus & Millichap puts Los Angeles at the very top of its 2017 National Multifamily Index, predicting that rents will rise more than five percent this year, while the city’s already low vacancy rate continues to decline.

That’s great news for landlords, who should see real estate investments pay dividends this year, but renters may be understandably perturbed by the firm’s forecast. According to the report, rental prices will likely rise to an average of $2,095 per month by year’s end, an increase of 5.4 percent.

The sizable price bump is mainly attributable to a predicted dip in the vacancy rate to just 2.6 percent. Moreover, new housing isn’t being constructed quickly enough to replace existing units that are filling up.

The report also notes that around 10,900 multifamily units are expected to be added to the market in 2017, down from 12,900 that opened to residents the year before. Both numbers are high given LA’s sluggish pace of construction in recent years, but still lag far behind the number of units brought to market during the 1980s.

The report makes no mention of the controversial Measure S ballot measure, which would prevent some housing developments from being constructed if approved by voters on March 7. The initiative would put a two-year moratorium on most larger-scale projects while preventing city officials from deviating from sets of local zoning guidelines that are often years out of date.

It’s not clear how much of an effect the measure’s passage would have on LA’s rental market, but experts have said that any further reduction in the supply of available units is probably more bad news for renters.