There are about 783,000 rental units in the City including 143,000 rented single-family homes and condominiums. About 80,000 buildings containing nearly 589,000 units were built prior to 1978 and are subject to the Rent Stabilization Ordinance.
To understand how much rents are locally, we can look at two very different surveys that are regularly updated: RealFacts and Fair Market Rents. RealFacts is a company that regularly surveys large apartment complexes that average 232 units/complex. Because larger and newer apartments are overrepresented in the RealFacts survey it tends to overstate rents. RealFacts is the source usually quoted in newspaper articles about rising or falling rents. As shown in the chart below, only individuals and families with higher wage jobs can afford to live in these apartments.
| Apartment | Average Monthly Rent | Monthly Income Needed to Afford Rent | Annual Income Needed to Afford Rent |
|---|---|---|---|
| Studio/1Ba | $956/mo |
$3,200/mo |
$38,000/year |
| 1Bd/1Ba | $1,218/mo |
$4,100/mo |
$49,000/year |
| 2Bd/2Ba | $1,607/mo |
$5,400/mo |
$64,000/year |
The second survey is done by the City of Los Angeles Housing Authority to set its "Fair Market Rent," the amount of rent that a private landlord can charge for an apartments being rented to a tenant who has a Section 8 voucher. The Fair Market Rent (FMR) is based on a survey that includes apartment complexes of all sizes and excludes slum housing. The FMR is set at the 40th percentile of the surveyed rents. This means that 40 percent of the apartments surveyed rented for the FMR or lower and 60 percent rented higher than the FMR. As such, the FMR understates rents. The Section 8 Fair Market Rents for 2004 (from the HACLA website @ www.hacla.org) are:
| Apartment | Fair Market Rent (FMR) | Monthly Income Needed to Afford FMR w/o Assistance* | Annual Income Needed to Afford FMR w/o Assistance* |
|---|---|---|---|
| Studio | $674/mo |
$2,250/mo |
$26,960/year |
| 1Bd | $807/mo |
$2,690/mo |
$32,280/year |
| 2Bd | $1,021/mo |
$3,400/mo |
$40,840/year |
| 3Bd | $1,378/mo |
$4,590/mo |
$55,120/year |
| 4Bd | $1,646/mo |
$5,490/mo |
$65,840/year |
| Residential Hotel (SRO) | $505/mo |
$1,680/mo |
$20,200/year |
| Mobile Home Space | $463/mo |
$1,540/mo |
$18,520/year |
* Families who qualify for Section 8 have much lower incomes than those shown here. Click here for more information about the Section 8 program.
According to these two surveys the average rent for a two-bedroom apartment in Los Angeles is between $1,020/month and $1,600/month. Renters need to earn nearly $20 per hour to keep rental costs within 30 percent of income.
