The Breakdown

Explaining Southern California's economy

LA rent: New UCLA study confirms LA is least affordable city in US

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A new UCLA study confirms that Los Angeles is now the least affordable rental market in the country, based on the portion of a renters’ income that goes to pay rent.

The study from UCLA's Ziman Center for Real Estate shows that the average renter in Los Angeles, which has the highest percentage of renters in the country, devotes 47 percent of his or her paycheck to rent. (You can read the full study at the end of this post.)

It's the latest depressing news about L.A.'s rental market, and it comes with a twist: affordability is not a new post-recession problem, but one that has been getting worse for decades.

RELATED: How affordable is rent in your neighborhood?

“Our studies show a severe housing burden among poor renters has existed since 1970,” said Paul Ong, professor of urban planning, social welfare and Asian-American studies, who co-wrote the study, in a statement.

“During periods of increasing inequality, the burden has grown even more severe. Vacancy rates have risen only slightly — even dipping at times when the housing burden has increased," Ong said. "And renters are paying more for the same quality housing, suggesting that neither market forces nor changing housing quality fully explain the increasing rents.”

The problem isn't vacancy. There was a lower vacancy rate in 1970 (3.9 percent) than there has been recently (5.1 percent). So what explains L.A.'s increasing rents? The study identifies two main cuprits:

Los Angeles has a lower median household income than comparable cities such as New York or San Francisco but only a small difference in median rents. At the same time, Los Angeles has relatively fewer publicly subsidized units and weaker rent control. This is particularly true in comparison to New York. The Los Angeles section 8 voucher program waiting list has been closed for almost a decade. Affordable housing production and preservation also slowed with the decline in state and federal funding. 

According to the Los Angeles Department of City Planning Housing Needs Assessment, the city needs to produce roughly 5,300 units per year that are affordable to moderate-income households or below (Los Angeles Department of City Planning, 2013). Los Angeles has instead averaged roughly 1,100 units per year since 2006. Since 2000, 143,000 rental units that had been affordable to those making less than $44,000 a year became unaffordable.

The study notes that high-end apartment construction is "booming," something KPCC wrote about recently.

It also finds that affordability has gone from bad to worse for L.A.'s poorest renters, with more than three-quarters of them severely burdened by rent in 2009-2011. Middle income renters hardly fared much better, with half considered cost-burdened in L.A., compared to a third of U.S. middle-class renters overall.

For high-income renters, though, there was a different pattern, according to the study. Fewer of them are cost burdened in L.A. than are in the U.S. as a whole.

Read the full UCLA study here

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