clock menu more-arrow no yes mobile

Filed under:

10 Charts That Show How and Why LA Has the Most Unaffordable Rental Market in the US

New, 61 comments

Los Angeles has the most unaffordable rental market in the US, it's been bad and getting worse for decades, and all the terrible nationwide trends in rental unaffordability are magnified in LA, according to a cheerful new study from the UCLA Luskin School of Public Affairs. The report is perhaps most appalled that the average Los Angeles renter had to pay 47 percent of their income toward rent last year (30 percent is the recommended amount), but that's really only the start of the appallingness:

Los Angeles has been majority renter since 1970 and now has the highest rental rate in the country at 52 percent. The national rental rate is about 35 percent.

Los Angeles homeowners earn 2.16 times as much as renters. That's only slightly higher than the most recent national figures, but in LA, "owners have made twice as much as renters off-and-on since 1980."

Owner incomes rose 25 percent in Los Angeles and 23 percent nationwide between 1970 and 2011. Renter incomes in LA rose just 5 percent over that time and fell 15 percent nationwide. (Most of the gains were made before 1990.)

Since 1970, median rent has risen 175 percent in Los Angeles while median income has stayed just about flat (1 on this graph represents the rate in 1970). As you can see, rent has increased more in LA since 1970 than it has nationwide, but incomes have barely outpaced the national average.

That's helped to give Los Angeles "the highest median rent burden in the nation" (that 47 percent); "Not only were a greater share of renters burdened [by paying more than 30 percent toward rent, or severely burdened by paying more than 50 percent], but the size of their burden was also greater."

[Left: US renter rates by income; right: LA renter rates by income]

Between 1970 and 2011, rents went up across the board in both Los Angeles and the US, but rose the most at the top and bottom; incomes rose in the same pattern across the US, but not in LA, where they had the smallest increase at the bottom and the largest at the top.

[Left: rent burden rates in 1970; right: rent burden rates in 2009-2011]

The rent burden on the lowest 20 percent of income earners was insane in 1970 and has only gotten insaner. Back then, 85 percent of the lowest earners were paying more than 30 percent of their income in rent and 54 percent were paying more than half of their income. Between 2009 and 2011, 77.8 percent of the lowest earners were paying more than half of their incomes toward rent. Sit with that one for a second.

The burden is a lot heavier on the middle 60 percent of earners than it used to be too: in 1970, only 9.8 percent in this group were paying more than 30 percent of their income toward rent; between 2009 and 2011, more than a third were paying more than 30 percent and nearly 15 percent were paying more than half of their incomes toward rent.

And this isn't a stock issue. Crazily enough, the housing market was tighter in LA in 1970 (with a 3.9 percent vacancy rate) than it was in 2009-2011 (5.1 percent vacancy).

And it's not because apartments are so much better than they used to be—controlling for improvements in number of bedrooms, building age, type of building, etc. etc., LA renters were actually getting less for their money in 2009-2011 than they were in 1970.

LA needs to be creating about 5,300 new units a year for low- or moderate-income earners; it's averaged about 1,100 since 2006. Meanwhile, 143,000 units that had been affordable to people making less than $44,000 a year have become unaffordable since 2000.

While median rents in New York and San Francisco are relatively close to LA's, the median income here is much lower. LA also has "relatively fewer publicly subsidized units and weaker rent control" than those cities. Get this: "The Los Angeles section 8 voucher program waiting list has been closed for almost a decade."
· UCLA study identifies L.A. as most unaffordable rental market in the nation [UCLA Newsroom]
· Los Angeles is in a Rental Crisis [Curbed LA]
· Los Angeles Has the Most People Paying an Insane Amount of Their Income Toward Housing [Curbed LA]
· LA's Scary Shortage of Affordable Housing, By the Numbers [Curbed LA]