How SpaceX and Aerospace Are Reshaping South Bay Housing

Published February 6, 2026

SpaceX employs over 10,000 in Hawthorne. Combined with Northrop Grumman, Raytheon, and smaller firms, aerospace is reshaping South Bay rental demand.

How SpaceX and the Aerospace Corridor Are Reshaping South Bay Housing

When I started managing properties in El Segundo 15 years ago, the aerospace industry was already a major presence. Northrop Grumman and Raytheon had been here for decades. But what has happened since SpaceX set up shop in Hawthorne has fundamentally transformed the rental market across the entire South Bay corridor. I am not exaggerating when I say that aerospace is the single most important factor in South Bay rental demand right now, and understanding this dynamic is essential for any property owner in the area.

SpaceX: The Numbers Behind the Impact

SpaceX currently employs over 10,000 people at their Hawthorne headquarters on Crenshaw Boulevard. That number has grown steadily since they moved into the old Northrop facility, and with the Starship program ramping up and Starlink continuing to expand, they are still actively hiring. Their job postings on any given week number in the hundreds.

People miss something about SpaceX, though. The hiring goes well beyond engineers. Yes, there are thousands of engineers, but there are also welders, technicians, machinists, supply chain managers, administrative staff, HR professionals, and cafeteria workers. And all of those people need housing within a reasonable commute distance.

The Broader Aerospace Corridor

SpaceX gets the headlines, but the aerospace corridor stretching from El Segundo down through Redondo Beach and into Hawthorne employs somewhere between 25,000 and 30,000 workers total.

Northrop Grumman has their Space Park campus in Redondo Beach with thousands of employees working on classified defense programs. These are workers with security clearances who tend to be extremely stable tenants because they cannot easily relocate, and they have been thoroughly vetted by the federal government.

Raytheon has a significant presence in El Segundo, focused on missile defense and radar systems. ABL Space Systems, a smaller launch vehicle company, set up in El Segundo as well. Then you have dozens of subcontractors and suppliers that orbit around these major employers, from machine shops in Torrance to software firms in Manhattan Beach.

The Tenant Profile

Here is what makes aerospace tenants so attractive from a property management perspective. Their average credit score runs 720 or higher. They have stable W2 income from employers that are not going anywhere. Defense contracts run for years, and SpaceX has a launch manifest booked out well into the 2030s. These tenants typically stay 2 to 3 years in a unit, which is ideal because it minimizes turnover costs while still allowing you to adjust rents to market at a reasonable frequency.

I have leased to SpaceX employees dozens of times over the past few years, and they follow a pretty consistent pattern. They arrive from out of state, often from Texas, Florida, or the Pacific Northwest. They need housing fast because they have a start date in two to three weeks. They are willing to pay market rate without negotiation because they are making strong salaries and their priority is proximity to the facility, not saving $100 a month on rent.

The Multiplier Effect

Economists talk about the multiplier effect, and in the South Bay it is very real. For every aerospace job, there are an estimated 1.5 to 2.5 indirect jobs created in the surrounding community. Restaurants, dry cleaners, gyms, childcare centers, auto repair shops. All of those businesses employ people who also need housing. So when SpaceX adds 500 positions, the actual housing demand impact is closer to 1,250 to 1,750 people looking for places to live in the area.

El Segundo specifically has seen vacancy rates drop to 2.8 percent, which is remarkably tight. We have properties in El Segundo where we receive 15 to 20 inquiries within the first 48 hours of listing a unit. Five years ago that number was closer to 8 to 10.

The Hawthorne Transformation

Hawthorne is where the transformation is most visible. The city has gone from an afterthought in the South Bay market to one of the most dynamic rental markets in the region. Rent growth is running over 4 percent annually, driven directly by aerospace employment demand.

The Magnitude LAX redevelopment project on the old Hawthorne Mall site is the biggest single development in the city's recent history. It is a 20 acre mixed use project that will bring roughly 600 new residential units, along with retail and commercial space. The initial phases have an August 2026 deadline, and the project is designed to serve exactly the demographic that aerospace employment has created: young professionals with good incomes who want to live close to work.

The Metro K Line, which runs through Hawthorne and connects to LAX and the broader Metro system, adds another layer of connectivity that makes the area attractive to tenants who may work at different locations along the corridor.

Marketing to Aerospace Tenants

One of the things I have learned from leasing to SpaceX and defense industry employees is that their priorities are different from your typical renter. Amenities like pools and gyms rank lower than you would think. What matters most is commute time and walkability.

A SpaceX engineer who can walk or bike to the Crenshaw facility will pay a premium for that convenience. We have seen tenants choose a slightly smaller unit that is a 10 minute walk to SpaceX over a larger, nicer unit that requires a 25 minute drive. When you are working 50 to 60 hour weeks on the Starship program, every minute of commute time matters.

Walkability to restaurants, coffee shops, and grocery stores also ranks higher than I would have expected. These are people who work long hours and do not want to get in a car to grab dinner or pick up groceries. Properties near downtown Hawthorne or the El Segundo strip have a measurable advantage in lease up speed.

When we market properties to this demographic, we lead with commute time to the major employers, not square footage or granite countertops. We include a map showing the distance to SpaceX, Northrop, and Raytheon. We mention walkability scores and nearby dining options. This approach consistently outperforms generic listings.

Personal Observations

I will share one thing that has really struck me about leasing to SpaceX employees specifically. There is an intensity and focus to them that I do not see with other tenant populations. They care about having a clean, functional, quiet space to come home to. They are not throwing parties or causing neighbor complaints. They are working on rockets and they just want a good place to sleep and decompress.

The flipside is that they notice maintenance issues immediately and they expect fast resolution. A leaking faucet that might go unreported by another tenant for a week will generate a maintenance request from a SpaceX engineer within hours, complete with a detailed description of the problem and sometimes a suggested fix. It keeps us on our toes, but honestly it makes our properties better maintained overall.

The aerospace corridor has made the South Bay one of the most resilient rental markets in Southern California. While other areas have seen demand fluctuations tied to remote work trends and tech layoffs, the South Bay has been insulated by an industry that requires physical presence. You cannot build rockets from your couch. And as long as SpaceX, Northrop, Raytheon, and the rest of the corridor continue to operate and expand, the demand floor for South Bay rentals remains high.

Topics: spacex, aerospace, south bay, hawthorne, el segundo, tenant demand, rental market

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Schofield Properties is a family run property management company at 323 Richmond St, El Segundo, CA 90245. We have managed the South Bay since 1972 and personally oversee about 186 doors today. Book a call to talk about your property.