Los Angeles Renters Are Paying The Highest Rents In California

Los Angeles renters in 2017 spent more of their income on rent than any other metro in California. Financial experts recommend a tenant limit their cost for shelter to no more than 31% of their income. This is fine and well in most parts of the country, but is exceeded for tenants in almost all parts of California, especially Los Angeles.

Compared to the historical average — between 1980 and 2000 — California tenants at the end of 2017 spent:

48% of their income in Los Angeles, up from the historical average of 36%;

42% of their income in San Francisco, up from the historical average of 30%;

To put some perspective on this, consider Los Angeles, which has reached a crisis level for desperate tenants. In eight years, the extra $8,200 spent per year on rent would almost get you to a 0% down payment on the average priced home in many areas. Los Angeles tenants have it the worst in the state, due to the steady population increase from newcomers consistently outpacing new rental construction. In fact, the last time rent in Los Angeles was near the recommended 31% of tenant income was in 1979.

The solution is ultimately more housing. This will be accomplished by:

1) loosening zoning restrictions & allowing higher density

2) Make the permitting process for low- and mid-tier housing easier

3) Incentivize builders of low- & mid-tier rental housing

Some of these actions have already begun, primarily with the package of affordable housing bills passed by California’s legislature in 2017. Rents will level out once new developments begin to hit the market, hopefully by the end of 2018 through 2019.