L.A. a City of Renters
At a time when the rate of homeownership has peaked nationwide, Los Angeles increasingly is becoming a city of renters, with a lower proportion of homeowners than any city except New York, according to a Census 2000 analysis released this week.
In Ventura County and other parts of Southern California, however, the rate of homeownership more closely parallels last year’s national rate of 66%. Ventura County’s rate is 66.2%, and Orange County’s 62.3%.
The rate for Los Angeles County is just 49%, the lowest of any metropolitan county west of the Mississippi River.
The homeownership numbers are even lower for the city of Los Angeles, with 61.4% renting and about 38.6% of households owning their homes. New York is the only city with more renters, 69.8%.
Released this week by the Census Bureau, the data show the American dream has become an illusive goal for many residents of the nation’s major cities.
“The implications are tremendous and drastic,” said Fernando Guerra, director of the Center for the Study of Los Angeles at Loyola Marymount University.
“People are less secure economically and personally if they are renting,” Guerra said. “They have no control over a variety of different aspects of their quality of life.”
Studies have shown homeowners are more likely to vote and more likely to become involved in community institutions such as schools, churches and neighborhood groups, Guerra said.
“That creates community stability,” he said. “It improves the community’s outlook, which improves the way the community looks.”
An individual family’s long-range prospects are heavily influenced by whether they own a home, experts say.
“It’s still the ambition of most people to try and own a home,” said Gary Blasi, a UCLA professor of law who has studied housing in Los Angeles. “When you look at the long-term prospects, people who own homes are more likely to be able to accumulate wealth and pass it on to future generations.”
Like Los Angeles residents, many in the nation’s other big cities are having less success in becoming homeowners and accruing the benefits.
In Chicago, 56.2% of the city’s units are renter-occupied; in Houston, 54.2%, and in Detroit, 45.1%
But across the nation the rate of homeownership has increased, following a trend.
Southland Pressures Hinder Homeownership
The Great Depression forced the national homeownership rate to 43.6%, its lowest level in the century.
By 1960, homeownership rates had reached 60%, fueled by a strong post-World War II economy, easier financing and favorable tax laws. And in 1990, the rate had reached 64%.
But pressures in Southern California make homeownership much more difficult, according to the Loyola Marymount study.
According to the report, the percentage of households able to purchase a median-priced home last year was 36% in Los Angeles County, 28% in Orange County, 47% in Riverside / San Bernardino and 33% in Ventura.
In Los Angeles, experts say the low rate of homeownership is rooted in a mix of factors, including the high cost of land and building, a huge gap between wages and housing costs and ineffective housing policies.
“We have had no coherent policy on housing either at the city, county, regional or state level,” Guerra said. “Even the national policy doesn’t take the situation of California into consideration.”
The rate of homeownership in the city has declined even as the number of people owning their home has slightly increased. That growth has been offset by a vastly increased population, many of whom are renters.
The news is brighter for residents who live outside the nation’s largest cities and in states such as West Virginia and Minnesota.
In West Virginia, three out of four households are owner-occupied.
In Minnesota, the rate is 74.6%. Metropolitan areas in Florida boasted some of the highest rates of homeownership.
Measures Backed to Address Problems
In the city of Los Angeles, housing costs consume a larger proportion of family income than in New York City.
More than 90% of low-income families pay more than 30% of their income for rent, according to the study.
Of Southern California residents polled for the study, 55% said they are pessimistic the next generation will ever be able to buy a home. About 80% said it was difficult for middle-income families to find affordable housing in their areas.
The report recommends several measures to address the region’s housing problems, including revamping the permit process to make it easier for developers, penalizing cities that do not build a specified amount of housing, increased funding for affordable housing and support for projects that mix housing with shops and offices.
“First and foremost is to recognize this crisis, because it is a crisis,” Guerra said.
“Leaders need to come together, recognize this and take and take a look at solutions regionwide.”
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