Forget buying a place to live—Los Angeles is one of the few cities where it's more expensive than renting and it's getting even less affordable—and let's look at how untenable even renting has become (in a city where it's the most likely option): a person earning median income in LA would have to spend 47 percent of that income on the median rent. That's higher than any other city in the US. (But it's part of a trend; Zillow helped the New York Times find 90 cities where median rent is more than 30 percent of median income, which is the recommended amount. And when residents spend more on rent, they spend a lot less on other things, like food and clothing.) A city has to be diverse to succeed (both culturally and economically), but in Los Angeles there's already a staggering shortage of housing for low-income workers and families. Now even median income earners are finding LA rents wildly unaffordable.
Meanwhile, developers are only building "luxury" housing, since that's what makes them the most money (see insanely expensive new apartments here, here, here, and here as just a few recent examples); in Los Angeles, landlords are even kicking out rent-controlled tenants so they can build new unaffordable housing. The NYT says that, since "there is little incentive to build anything other than expensive units ... there are in effect two separate rental markets that are so far apart in price that they have little impact on each other." So it's no longer true that increasing supply will lower rents for everyone (it might lower rents for luxury housing, but not to the point where it becomes miraculously affordable to normal renters). Time to pack up and find a job in Palmdale, middle class, 'cause you're losing LA to the trust funders, B-list actors, and tech douches of Silicon Beach.
· In Many Cities, Rent Is Rising Out of Reach of Middle Class [NYT]
· Mapping LA's Staggeringly Unaffordable Renting Culture [Curbed LA]
· LA Renters Have to Make $27 an Hour to Afford a Two-Bedroom [Curbed LA]