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The winners and losers of LA's 2015 housing market




Since it was founded in 2000, the city's Affordable Housing Trust Fund has provided loans to developers to incentivize them to build apartments for low-income residents.
Since it was founded in 2000, the city's Affordable Housing Trust Fund has provided loans to developers to incentivize them to build apartments for low-income residents.
File photo by GABRIEL BOUYS/AFP/Getty Images

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"The rent is too DAMN high!"

New York City mayoral candidate Jimmy McMillan uttered that phrase in 2010 about his own city – and became a meme in the process.

But as is the trend Lately, L.A. outdoes NYC in a lot of things. Unfortunately, housing unaffordability is one of them.

2015 could be a mixed-bag for people living in Southern California, says KPCC reporter Josie Huang.

"If you're a low- to middle-income renter, it's been really tough out there for you and things are only looking to get tougher," she says. "If you're someone looking to sell your home, then things were looking pretty good for you because the real estate market is still looking pretty hardy."

Here are some of the most important milestones that affected the cost of housing over the past year:

•      L.A. was the worst. This year began with L.A. being the worst major city for housing affordability. While people in cities like New York and San Francisco pay higher rents and mortgages on average, they also take home higher wages. But in Los Angeles, the average renter spends 47 percent of their paycheck because wages are relatively low. That's the highest burden in the country.

•      Listeners shared their housing troubles. Listeners told KPCC how much high housing costs are affecting other parts of their lives.

"I don't go out. The light bill gets overdue," said Watts resident Danetta Brooks to our Public Insight Network. "Sometimes I think that I would have to sell some food stamps just to get the rent together, but so far that hasn't happened."

•     There aren't enough homes. Many experts said the housing problem is caused by many issues, including supply and demand.

"There are more people who want to live in L.A. than there are houses for people in L.A.," said USC's Richard Greene to Take Two.  

•     L.A. is trying to encourage more building. L.A. Mayor Eric Garcetti made a pledge in 2014: the city would build 100,000 homes by 2021. Last September, he said Los Angeles is on track. Meanwhile the city approved $7 billion in new construction in the Last year alone, which is apparently the highest amount since the 1980s. But we reported that most construction is concentrated in downtown as luxury high-rises, leading some to wonder whether those will truly ease housing costs in the city.

•     Rent increased. Fast. Rent was projected to climb more than 8 percent from 2014 to mid-2016. We've already blown past that: apartment rental site Zumper found rents jumped by 11.6 percent in the Last year alone.

•     Renters want to band together. Renters are trying to create a citywide tenants union.

“There’s a kind of culture in our society that says renters are somehow less than," said organizer Dont Rhine. "Actually, we make up the majority of the people in this city. We pay for this city.  Right? We are this city.”

•     Home sellers are sitting pretty. If you're selling a house, things are great for you. Home prices are rising fast, with Echo Park being the neighborhood with the strongest market. It had some experts worried about a housing bubble. They were in the minority, however.

 "L.A.’s housing market, despite becoming more expensive and unaffordable, is not in a bubble," said a recent UCLA report.

•     Lawmakers focused on wages. City and county lawmakers haven't addressed this increased housing costs directly. Instead, most of the energy went into a minimum wage hike to $15 for L.A. city and county.

"This could allow more people to live their American dream here in L.A.," said Mayor Garcetti. "That means they’ll have money left over after paying their rent." Garcetti signed the city's measure into law last June, while the L.A. County leaders voted in July to raise the wage for unincorporated areas.

•     Airbnb became a target. Some people put Airbnb and other home-sharing in their crosshairs, saying they've led to an increase in home prices and evictions. L.A. City Councilman Mike Bonin told KPCC about scenarios he is worried might play out if they weren't regulated.

"Someone buying an entire building, evicting everybody, then turning it into a defacto hotel, which is significantly impacting our inventory of affordable housing," he said. "We can’t allow it to get any worse."

Airbnb says it does not advocate or support people who do that. However, that hasn't stopped communities like Santa Monica from enacting one of the toughest laws in the country on home-sharing sites. Los Angeles, however, has yet to agree on its own measure.

•     Homelessness is now at the top of the agenda. Local leaders are now tackling the issue of homelessness. The number of people living on the streets jumped 12 percent from 2013 to 2015. To that end, L.A. city lawmakers pledged to spend $100 million in the next year and vowed to declare a homeless state of emergency. However, they have yet to detail how to spend that money and have not declared that state of emergency.