Greater Los Angeles was once a collection of Mayberry-like, white-picket-fence neighborhoods that gave us The Beach Boys and Fosters Freeze restaurants. But its postwar population boom and development explosion transformed the metropolis into America's epicenter of apartment life.
A new report from rental listings site Abodo confirms that Greater L.A., including Orange County, is a renter-majority town, one of only 21 cities and metropolitan areas out of 400 analyzed that can claim to have more rental than homeowner households.
"Los Angeles ranks No. 4 in the U.S. for the highest percentage of renters, with 54 percent of its residents renting rather than owning," Abodo's senior communications manager, Sam Radbil, said via email.
The next big city on the list was San Francisco, at No. 16, followed by New York, at No. 17. Both had slightly more than 50 percent renter populations, the analysis found. Five California cities were in the top 21.
Dowell Myers, director of USC's Population Dynamics Research Group, says that Los Angeles has been a renter-heavy city since the 1970s. "It's a land of migrants," he says. "People arrive, they rent, and they don't buy a house right away."
"Transplant cities like Los Angeles often have a higher renter percentage for economic and career-related reasons," Radbil added. "This is clearly shown in San Francisco and New York City as well."
The housing crisis, aided by stagnant wages for the middle and working classes, means that Los Angeles is also home to a lot of settlers Myers calls "diverted homeowners." They dwell in apartments not by choice.
Indeed, the Abodo report says that the high cost of buying a home in L.A. explains our place on the list. Average homeownership costs exceed the price of rent each month in this market by $965. And the analysis notes that high demand correlates to high rents. Los Angeles has seen extremely low vacancy rates, a need for hundreds of thousands of new housing units and continued population growth.
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But L.A. is not alone. Abodo, looking at 2015 data from the U.S. Census Bureau’s 2015 American Community Survey, found that the nation saw 1.4 million new renter households in 2015. The 36.4 percent of Americans leasing their digs is the largest slice of renters since the 1960s, according to Abodo.
"The high price of housing is a barrier that stops homeownership rates from rising," USC's Myers says.