Out of 381 metro areas in the US, Los Angeles has the largest proportion of people paying an insanely high percentage of their incomes for housing. Just about half (49.8 percent) of all households in metro LA spend more than the recommended 30 percent of income on rent or mortgage payments and more than a quarter (25.9 percent) are spending at least half their income, according to a report released yesterday by Harvard's Joint Center for Housing Studies. This is very bad news for Los Angeles: when that kind of money goes toward housing, it doesn't just severely limit personal quality of life, studies show it also cuts deeply into the local economy, as households are forced to spend less on other necessities like food and healthcare.
Things are bad whether you rent or own in Los Angeles, but worse for renters: 58.3 percent are paying more than 30 percent of their income toward rent and 32.8 percent are paying more than 50 percent. (A separate study a few months back found that a person earning the median income in Los Angeles would have no choice but to spend 47 percent of that on rent for a median-price apartment.) Still, LA is only the thirty-fifth most burdened rental market in the US; it's sixth most burdened for owning. 40.7 percent of owners are paying more than a third of their incomes toward mortgages; 18.6 are paying more than 50 percent.
As we know, housing and rental prices are doing just fine and dandy these days, shooting up past pre-recession levels, but "Median household income, adjusted for inflation, has fallen 11% here since 2005," according to the LA Times. Wages are still higher than the national average, but lower than other similarly high-priced housing markets. A rep for the Joint Center for Housing Studies says "The basic cause of these high cost burdens is weak income growth."
· Millions of Americans Spend Over 30 Percent of Income for Housing [Harvard]
· Mapping LA's Staggeringly Unaffordable Renting Culture [Curbed LA]
· Los Angeles is in a Rental Crisis [Curbed LA]