The L.A. City Council voted yesterday to raise the local minimum wage to $15 an hour by 2020.
But as you well know, even $15 an hour won't get you very far in Los Angeles, which has some of the least affordable housing in America.
A new analysis of national housing costs by personal finance site SmartAsset looked at “fair market rents” in 300 markets. Based loosely on the U.S. Department of Housing and Urban Development (HUD) standard for “cost-burdened” rent — that which takes up more than 30 percent of a household's income — the site calculated how much dough it would take to rent a regular old apartment in L.A.
The results are the most dire we've seen.
The analysis found that it takes a whopping $124,371 a year in income to rent a two-bedroom apartment here. On a national income level, that kind of cheddar would put you in the highest one-fifth of income earners in the United States.
There are some caveats here, however.
For one thing, SmartAsset used a different standard for how much you should spend on rent. HUD says paying more than 30 percent of your income would make you “cost-burdened.” But because HUD includes other costs, including utilities, the site decided to make its threshold more than 25 percent of income. The site is only looking at rent here.
That seems reasonable. But as you well know, most of us spend much more of our income on housing. A UCLA study last year found that nearly half of Angelenos spend half their income on rent.
And, SmartAsset found a high figure for average, two-bed apartments in L.A. — $2,902 — the highest we've seen yet. The site says it took the figure from myapartmentmap.com, which surely doesn't list every available unit in town.
Still, it's not that far from reality. And the results here totally jive with what you know — that Los Angeles rent is increasingly out of touch with the reality of local wages.
In fact, the median individual income in L.A. is $27,749, according to the U.S. Census. The household income figure is $55,909.
Los Angeles wasn't the worst rental market in SmartAsset's analysis. We came in third place. San Francisco topped the list. The site says you'd need a household income of $201,171 to rent a two-bedroom apartment there.
New York came in second place with a $158,400 household income required. Boston ($121,114) came in fourth place, and Washington, D.C. ($114,986) came in fifth.
To be fair, the whole country is being squeezed by high rents. HUD says:
A family with one full-time worker earning the minimum wage cannot afford the local fair-market rent for a two-bedroom apartment anywhere in the United States.
Maybe housing is the new healthcare. After all, your sheltered life is in your landlords' hands, and they know it.