Angelenos are the least likely urban dwellers in the nation to become homeowners -- at least according to data found in a new study published Monday.
The study, by the Joint Center for Housing Studies of Harvard University, reveals that 52 percent of Angelenos live in rental properties - more than any other metropolitan area.
"LA actually does stand out as having the highest share of people renting, which in part is a reflection of the high housing costs in the area and a younger population as well," Chris Herbert, Research Director at the Joint Center for Housing Studies at Harvard, told KPCC.
Approximately 43 million, or about 36 percent of Americans nationwide are renters, up from the 31 percent in 2004.
But just because more people are renting, doesn’t mean that rental properties are necessarily affordable. Since 2000, rent prices have increased 6 percent. In contrast, renter income has dropped 13 percent.
In fact, at least half of renters are spending more than 30 percent of their income toward rent, and more than a quarter spend at least half their income on it -- causing many of them to be burdened by their housing costs.
Richard K. Green, director of the USC Lusk Center for Real Estate, told KPCC that the common idea that people should not spend more than 30 percent of their income for rent is simply not realistic for more people in LA.
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"It’s not available for many, many people who live in Southern California,” Green said. "When we look at Los Angeles, Orange County, and San Diego, the way I do the measurements, they are three of worst cities in the country for affordability."
The study suggests the increase in renting can be due in part by the economic changes of the late 2000s, when foreclosures displaced millions of people, and the recession led to vast unemployment and changes in household budgets for those who would normally consider buying property.
Others, now exposed to the risks of the housing markets, may have chosen to rent rather than buy to avoid the dealing with issues such as falling home values or the costs of relocation, according to the study.
