There are 39.5 million people living in the state of California with 10% of these people residing in Los Angeles. Despite rising demand, the state, which is regarded as one of the most beautiful and economically stable, is suffering from a significant lack of affordable housing units.
According to Maxwell Drever, the pandemic has put more pressure on the industry, which is struggling to meet the demand from the many people who are looking for affordable and appropriate units. Renters with little means are particularly affected.
Two of the main issues facing Los Angeles have been the state’s rising rates of homelessness and cost pressures. In Los Angeles, 78% of renters with extremely low incomes (ELH) do the same, compared to 17% of Philadelphia residents who pay 50% of their income for housing. This value is substantially lower—just 6%—for renters with middle-class incomes. To strike a demand and supply balance for the future, the situation must be corrected right away because it is still quite concerning.
Let’s look at some of the information and findings that Maxwell Drever evaluated for the Los Angeles market for affordable workforce housing.
Differences in Race as Explained by Maxwell Drever
Although it may not seem related, Los Angeles’s affordable housing dilemma significantly contributes to racial inequality. Compared to white renters, black renters bear a heavier financial burden. For black families, the financial pressures are roughly 50% higher. Not just the families are affected by this, but also the builders, the government, and other parties. Additionally, it plants the seed for racial tensions in other contexts.
The average rent in Los Angeles has increased by about 35% since 2000. This is an enormous growth that is not accompanied by a corresponding increase in individual income or salary. Maxwell Drever claims that because of these inequities, it is difficult for people to house their families. Additionally, the COVID-19 pandemic has significantly worsened conditions. People search for cheap housing, which is once again in decline, as jobs are lost and incomes are reduced.
The State Minimum Wage Does Not Increase in Line with Rent, Maxwell Drever Notes
In contrast, household incomes in the state of Los Angeles have only increased by 6%. Rents have increased by 35%. The need for renters to provide for their families has significantly expanded during the past 20 years. To afford the asking rent in most communities today, one must earn more than three times the state minimum wage. According to Maxwell Drever, these figures present a worrying image of the state.
Renters versus Homeowners
By 2030, Los Angeles will need to build more than 1.2 million affordable homes in order to prevent any supply and demand issues. However, the fact that the state supports homeowners at a rate roughly five times higher than that of renters just makes the issue worse.
If Los Angeles is to avert a serious crisis over the availability of affordable housing, fast action is required. Before matters get out of hand, the parties involved must work together to address the issues at hand, Maxwell Drever asserts.