L.A. Is a Top 5 U.S. City for Financially Strained Renters
At the height of the Great Depression, in 1937, the federal government decided that paying 30 percent or more of your income on housing is a serious cost burden. It was the limit "for the amount of income that a family could spend and still have enough left over for other nondiscretionary spending," according to the U.S. Census Bureau.
Paying too much for rent is bad for all of us because it takes money away from other purchases — cars, clothing, even food — thus chilling the local economy. Yet, as you're well aware, paying 30 percent of your monthly haul often won't get you far around these parts. Last year Harvard's Joint Center for Housing Studies found that one out of three L.A. renters actually spends 50 percent or more of income on housing.
This latest report should come as no surprise, then. Apartment List looked at U.S. Census Bureau data to reach its findings in a study titled Which Metros Have the Most Cost-Burdened Renters? Yes, Los Angeles is duking it out with the worst of them, landing in fifth place among the largest 100 U.S. cities.
The site found that 59 percent of Los Angeles–area renters were cost-burdened in 2015. Nationwide, on average 51 percent of renters were cost-burdened, according to the report. "Rents in Los Angeles increased by 14.3 percent from 2005 to 2015, while renter incomes increased by only 3.1 percent," Apartment List's director of data science, Andrew Woo, said via email.
Riverside (59 percent), San Diego (58 percent) and Oxnard (58 percent) also had unusually high shares of cost-burdened renters, the site found. "Skyrocketing rents and stagnant wages" were to blame for the problem in Southern California, the site stated. "Southern California is one of the most unaffordable regions in the U.S. Most worryingly, affordability has not improved much in recent years, as wage growth fails to outpace rent increases."
L.A.'s share of cost-burdened apartment dwellers beat out those in New York (54 percent), Chicago (51 percent) and Boston (51 percent), the analysis found. Miami (64 percent) topped the nation for its percentage of cost-burdened renters.
"If the situation does not improve in Florida and Southern California, renters may continue to migrate to cities on the interior in the coming years," according to Apartment List.
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