Rising Rents Squeeze Area’s Working Poor : Housing: Minimum-wage earners are hard-pressed to afford decent units. The trend also threatens the region’s economy.
Low-income residents of Los Angeles are working more hours than ever to afford a decent apartment, a trend that is forcing hundreds of thousands to settle for overcrowded units and slum housing, according to a report released Thursday.
Among other things, the study’s findings pose a serious threat to the Southland’s economy, which is enjoying its longest peacetime expansion since World War II.
A couple holding down two minimum-wage jobs would each have to work 11 hours a day, seven days a week, to be able to rent the typical $1,140-a-month apartment in Los Angeles County, according to a study by the National Low Income Housing Coalition, a Washington-based advocacy group, and the Southern California Assn. of Non-Profit Housing.
The study found that 760,000 people living in the Southland earn the state’s minimum wage of $5.75 an hour, or less than $12,000 a year.
“There are a lot of $6-an-hour jobs, but not a lot of $6-an-hour apartments, or even $10-an-hour apartments,” said Jan Breidenbach, executive director of the Southern California Assn. of Non-Profit Housing. “We have a crisis in affordable housing.”
That crisis threatens to derail the region’s still-growing economy. Low-paying service jobs account for the bulk of employment growth statewide. But with people forced to pay a larger percentage of their income for rent, they are left with less money to spend on food, clothing and other consumer products that keep the economy humming.
In addition, soaring housing costs force businesses to pay higher wages to recruit and retain employees. That in turn makes their products and services more expensive in a competitive global marketplace. A decade ago, those forces were major contributors to what became the recession of the early 1990s.
“The implications are that this could put the brakes on this economic expansion,” Breidenbach said.
The working poor’s inability to find good housing also affects the quality of life in Southern California, from longer commutes that help clog freeways to more pollution that lowers air quality.
Thousands of minimum-wage earners are coping with rising rents by living in overcrowded housing--estimated to affect one in five Southern California renters, one of the highest rates in the nation--or to live in slum housing. The report urges the state to raise the minimum wage and provide rental aid to more families, and it calls on state and local governments to provide more money for the development of affordable housing.
For poorer families, the Southland’s record-high rents knock them down like a wrecking ball against a brick building.
In Van Nuys, Elizabeth Bucio and her husband, Juan Carlos Leon, who are raising three children, have been served an eviction notice from their modest apartment.
The family, supported by Juan’s minimum-wage job as a chef’s assistant at a Santa Monica restaurant and Elizabeth’s income as an Avon saleswoman and baby-sitter, can stretch their budget to afford the $650 a month in rent. But their landlord has decided to demolish the 100-unit building where they live to erect one that caters to affluent seniors.
Bucio and Leon have gotten on waiting lists for smaller or shabbier places than where they now live. A typical two-bedroom unit in Van Nuys goes for about $950 a month; a one-bedroom in Santa Monica, $800 a month. Landlords at those properties have told them what they already know.
“We can’t afford that rent with the wages we’re earning right now, even for a one-bedroom apartment,” Bucio said through an interpreter. The family did look at a small two-bedroom unit for $700 a month, but they lack the $1,425 in deposits that apartment requires, as well as money for moving expenses.
“Right now,” she said, “I don’t know what we’ll do.”
The survey was based on average apartment rental rates gathered by RealFacts, a Novato, Calif.-based firm that calculates rents in cities throughout the state. The company surveys complexes with 70 or more units, which tend to be newer and pricier. However, those units tend to pull up rents in the rest of the market.
Housing costs have been rising sharply throughout the Southland for more than a year as the construction of homes, apartments and condominiums has lagged far behind job growth. Los Angeles County leads the nation in housing demand, with six new jobs created for each new home that is planned. Other Southland counties are not far behind.
The result is that housing prices are expected to escalate even further next year, driving up apartment rents in Los Angeles County, where more than half the population lives in rentals, the highest rate in the state.
An estimated four in 10 Southern California residents spend more than 30% of their gross income on rent, the study found. Even many middle-class civil service employees, such as police officers, firefighters and teachers, are being priced out of the housing market, the report said.
“We see this throughout the state, and it’s a grave concern in Southern California, where we expect the most growth over the next five years, that affordability is a major factor,” said Cathy Creswell, acting deputy director for housing policy at the state Department of Housing and Community Development.
Creswell said that in building new housing, “no place in the state is keeping up” with growth.
