In the most recent data released through Apartment List’s annual report this month, Long Beach’s rent continued to rise—though not quite at the same level as last year.
2016 saw an exorbitant 10.8% increase in rents year-over-year, making the median one-bedroom rent hit $1430/month. This year, however, rents saw a much more moderate 3.5% increase and maintained below the state’s overall rent growth:
Surely, the dip in the is a welcome.
However, when we look at the overall median cost—$1,340 for a one-bedroom and $1,720 for a two-bedroom—Long Beach rents now match Los Angeles dollar-for-dollar for the first time in history:
Los Angeles has significantly curbed its rent and even prompted slight dips in certain areas but the larger national report makes it quite clear: the housing crisis, having already crossed the rural-urban divide, is a national crisis as 92 out of 100 major US cities continued to see their rent grow.
Even worse, only 10 of the nation’s 50 largest metros have produced enough new housing to keep pace with job growth in recent years. What does that equate to? Well, the number of households in the US grew by grew by 11.2M over a 10-year period between 2005 and 2015, while only about 9.9M new housing units new housing units were constructed over that same period.
Breaking it down for California, permits were filed for only 21.5 housing units per every 100 new residents in the state. That put good ol’ California second to last behind Alaska, where only 16.2 housing permits were filed for every 100 new residents. By comparison, Michigan saw 166 permits filed for every 100 new residents.
At the same time, within Long Beach and Los Angeles, we’re in the middle of welcoming new development—much needed for density and economic development—but remain unsure of the costs it will have on residents who are already on tight budgets and working professionals who can’t afford to have significant portions of their income headed solely toward renting. Some Angelenos are paying up to 40% more on rent than owners are paying on the average mortgage—an alarming gap considering the lack of protection renters have.
The reason behind the increased rent is divisive: landlords can increase rents throughout the city thanks to a real estate win-win for their pockets given the lack of rent control and an increased demand for apartments as unemployment declines and vacancy has fallen to under 3%.
But make no mistake: the lack of housing is the culprit.
Despite rising costs, because, well, there are too many people and not enough places to live according to nonprofit Next 10’s most recent data: renter-occupied housing units with more than one person per bedroom grew from 12.7% in 2007 to 13.2% in 2014. Long Beach is joining the entire region in a housing crisis that is slowly driving low and middle income families and workers out of the state entirely.
As a result, Californian homeowners spend the highest amount of their annual income—25.4%—on housing. In LA County, nearly 60% of our citizens contribute 30% or more of their income to rent according to a study by the Joint Center for Housing Studies at Harvard—which then cuts into other expenses, including food, healthcare, and contributing to the local economy.
In LA County, nearly 60% of our citizens contribute 30% or more of their income to rent—which then cuts into other expenses, including food, healthcare, and contributing to the local economy. Even more disturbing, 32.8% of renters in the area are considered “severely burdened” by their rent, meaning more than half of their income goes to rent.
Even more disturbing, 32.8% of renters in the area are considered “severely burdened” by their rent, meaning more than half of their income goes to rent.
The lack of affordability is (not shockingly and once again) most affecting low and middle-income renters: in the LA/Orange County Metro area, 91% of people who make $15K to $30K annually are considered legally burdened by their rent. Of that, a perturbing 70% of those renters are putting half their paycheck or more toward their monthly rent. Even among renters making $30K to $45K a year, 78% are exceeding that 30% threshold and paying more than they can really afford for rent. This burden doesn’t affect the more affluent: only 26% of those making over $45K only 26 percent are burdened.
Long Beach isn’t anywhere near implementing rent control-style policies, as attempts at REAP-like programs have largely been discussed but ultimately failed. Additionally, many housing advocates worry about rent control policies over the long-term, since they’ve created the most expensive markets, such as San Francisco and New York, while lowering the quality of life for those residents.