Renters Are Locked Out of Affordable Housing. The high rents help explain why many Los Angeles residents pay too much of their income for rent and why many lower-income renters live in overcrowded apartments. Rent is considered affordable when it is no more than 30 percent of the renter's monthly income. In Los Angles nearly half of all renters pay more than 30 percent of their incomes for rent. Nearly one in four renters in Los Angeles spends more than half their income on rent.
| Household Income Level | Paying More than 30 percent of Income | Paying More than 50 percent of Income |
|---|---|---|
| Income below 30% of Median | 74.0% | 62.4% |
| Income between 31% and 50% of Median | 77.9% | 32.2% |
| Income between 51% and 80% of Median Income | 44.9% | 9.0% |
| Income over 80% of Median | 11.5% | 1.3% |
| All Renter Households | 43.3% | 22.0% |
Source: CHAS Data Book 2000
The table shows that 43.3 percent of all the City's renter households are paying more than 30 percent of their incomes for rent and that nearly a quarter are paying more than half their incomes for rent. Furthermore, among the very poorest households, 62.4 percent are paying more than half their incomes for rent, leaving very little for all other necessities, such as food, transportation and health care.
Housing cost increase vs. wage growth. According to a study by the California Budget Project, renters' incomes in Los Angeles have not even kept pace with inflation, let alone rising housing costs. Between 1989 and 2002, the median income of renters decreased by 3.6 percent for all renters, by 7.1 percent for renters with children and by 10.3 percent for low-income renters. During the same time period, the income of the median homeowner household increased by 7.4 percent.
Source: Locked Out 2004: California's Affordable Housing Crisis
Housing Wage. The National Low Income Housing Coalition calculates the "housing wage," the hourly wage needed to pay the rent on an apartment at the "fair market rent" set by HUD.
In Los Angeles County the fair market rent for a two-bedroom is $1,021.
- The annual income needed to afford this apartment is $40,840.
- The hourly wage needed to afford the rent is $19.63/hr
for a 40-hour week. - A minimum wage worker earning $6.75/hr would have to work
116 hours a week to afford this rent.
"Afford" means paying no more than 30 percent of income for rent.
