While last year saw Long Beach rise the most amongst all California cities in terms of rent growth, it now has another crown that stokes fears of affordability in the state: we are home to the nation‘s second-highest year-over-year rent increase at 7.8%, according to the most recent data released through Apartment List’s annual national report this month.
Right now, 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 given to rent.
That’s not just an increase year-over-year; that’s a skyrocket, tying with Baton Rouge and falling short of Stockton (yes, Stockton)’s exorbitant 12.4% year-over-year increase. In terms of month-over-month increases, Long Beach sits at No. 7 in the nation, with Stockton leading and three other California cities joining in: Sacramento (No. 2); Santa Ana (No. 3); and Fresno (No. 4).
With California leading the Top 4 and accounting for half of the Top 10, further fears about affordability, gentrification, and development are being stoked.
When it comes to Long Beach, this means that the median 1-bedroom apartment average is $1,400/month and a 2-bedroom apartment average is $2,100/month—putting us above Anaheim, Santa Clarita, and tying with Huntington Beach.
As we’ve noted before, the reason behind it all 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 about 2%.
And we are talking massive interest in apartments, 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.
In the decade between 2005 to 2015, 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.
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. Right now, 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 go toward rent.
What this ultimately results in is the the fact that many—particularly those advocating for the poor or marginalized—want developers and policy makers to be mindful of not just those coming in to invest but those that have long been here, investing in our city when others found it undesirable. They could very be pushed out, making the culture of this great city pushed out with them.