Los Angeles Housing Crisis Feeds Homelessness

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June 1, 2017 · Posted in Commentary 

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Leslie Evans

Median rents in Los Angeles increased 32% between 2000 and 2017, according to a May 2017 report by the Public Policy Institute of California. Over the same period, household income decreased by 3% when adjusted for inflation. The real estate website Trulia reports that in Spring 2017 the median rent for a two-bedroom apartment in Los Angeles was $2,600. A UC Berkeley study by the Urban Analytics Lab found a slightly lower figure, at $2,499. In large parts of Los Angeles this is more than the total annual median household income. In the Adams-Normandie section of South Los Angeles, median household income is $29,000 a year, or $2,417 a month; in Watts it is $25,000, or $2,083 a month.

The national recommended expense for rent is 30% of income. Radio station KPCC 89.3 on their website published a map showing the median income, rent, and percentage of income spent on rent in each Los Angeles zip code (http://projects.scpr.org/longreads/high-rent-few-options/ ).  For a few South Los Angeles County locations chosen at random we find:

Percent of families paying more than 50% of their income in rent, sample zip codes:

90007 (West Adams): 40.5%

90037 (South Los Angeles): 43.56%

90002 (Watts): 41.42%

90221 (Compton): 33.9%

In these areas, the rents are below the city median, but so are the incomes. For example, in zip 90037 the median rent is only $898 a month, but the median income is only $22,113.

The 2017 federal poverty level is an annual income of $13,860 for an individual; $28,290 for a family of four. Officially, 18.3% of Angelenos live in poverty. When the high housing costs are factored in the number rises to 25.6%. Many of the poorest families are paying 70% of their income for rent, with hardly anything left for food, clothing, and transportation. The LA Times in a May 27, 2017, editorial said that “one in three renters in California pays more than half of their income to their landlord.”

The Southern California Association of NonProfit Housing (SCANPH), in a May 2017 report, estimated that the city needs 551,807 more rental homes to meet the need and move rents down toward the national averages. The situation is particularly bad in Los Angeles because it has a far higher percentage of renters than other major cities. A March 2017 report by Beacon Economics found that California ranks 49th out of 50 states in home ownership with less than 54% of homes occupied by their owner. That leaves 46% of the population as renters. Los Angeles is even worse, where renters fill 53% of the homes.

Statewide, California for the last ten years has been building about 80,000 homes a year, when what is needed is 180,000. One reason is a sharp decline in government funding. The SCANPH report records a 64% decline in funding between FY 2008-2009 and FY 20015-2016, from $711,899,588 to $255,034,071. A major loss was the abolition in 2012 of the state redevelopment agencies, which cut $274.8 million a year. State housing bonds and housing programs were also cut in half. Federal Housing and Urban Development funds were also cut.

The LA Times editorial puts even greater blame on local government policies. Long delays in approvals and high fees to fund infrastructure have slowed construction. The Times notes:

“The crisis may be most visible in the growth of tents and RVs clustered along city streets as homelessness has risen in California in recent years, even as it has declined elsewhere in the nation.”

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