Least Affordable Rents in Nation Found in State
A typical California wage earner must make about $44,000 a year, or at least $21.24 an hour, to afford the rent on a two-bedroom home, a study released Monday found.
That fact, as calculated by the National Low Income Housing Coalition, made California the least affordable state in the nation for renters who were hoping to spend a third of their income or less on housing. The Golden State beat out Massachusetts, which fell to No. 2.
Nine of the 10 least affordable counties nationwide were in California, the group found. San Francisco, San Mateo and Marin were the counties with the highest rents, with workers having to earn at least $61,000 a year, or $29.60 an hour, to rent a two- bedroom unit. Ventura County, where residents need to take home about $55,000, or $26.58 an hour, was fourth. Santa Cruz County, at $54,000 in annual pay, or $25.90 an hour, ranked fifth.
Orange County came in at No. 6 because workers there need to earn almost $53,000 a year, or $25.33 an hour, to pay for the average two-bedroom unit. In Los Angeles County, income must reach about $45,000, or $21.62 an hour.
Californians are increasingly spending more than 30% of their income on housing.
For low-income wage earners, the numbers are particularly stark. A Californian making the minimum wage would have to work 126 hours a week -- the equivalent of seven 18-hour days -- to cover rent of $1,104 a month, which is the Department of Housing and Urban Development’s best estimate of what a “fair market” rent is in a particular location. (Because of changes in the way HUD calculated rents this year, it’s difficult to compare them with previous data.)
The study released Monday “tells us two things,” said Jan Breidenbach, executive director of the Southern California Assn. of Non-Profit Housing, an affordable housing advocacy group. “Rents are too high and wages are very low.”
California has raised the minimum wage twice since 1999. It now stands at $6.75 an hour, 31% above the federal minimum of $5.15. In the last year, the state’s average hourly wage edged up 1.4% to $19.70, according to the Employment Development Department.
Home prices have long been higher in California than in the rest of the nation and have soared more than 20% in each of the last two years, keeping many people out of the market. That forces them to remain renters, driving up demand, lowering vacancy rates and allowing landlords to raise rents.
Meanwhile, construction of new apartments is slowing.
In Los Angeles County, builders are expected to complete 5,400 rental units this year, down from 5,800 in 2003, said Lane Schwartz, regional manager of Marcus & Millichap Real Estate Investment Brokerage Co.
The combination of high demand -- or in rent-controlled areas, minimal tenant turnover -- and restricted supply “is helping to keep vacancies low,” he said.
Schwartz predicts that L.A. County’s vacancy rate will end the year at 3.2% while the average rent will have risen 5% to $1,219.
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Renters in the red
Median monthly housing costs are well beyond the income of most wage earners in major counties, according to a survey.
Ventura
Median income for renters: $46,387
Income needed to afford* a two-bedroom apartment: $55,201
Orange
Median income for renters: $46,122
Income needed to afford* a two-bedroom apartment: $52,579
San Diego
Median income for renters: $37,737
Income needed to afford* a two-bedroom apartment: $47,171
Los Angeles
Median income for renters: $33,737
Income needed to afford* a two-bedroom apartment: $44,870
San Bernardino
Median income for renters: $30,820
Income needed to afford* a two-bedroom apartment: $30,204
Riverside
Median income for renters: $30,652
Income needed to afford* a two-bedroom apartment: $30,039
State median
Median income for renters: $37,651
Income needed to afford* a two-bedroom apartment: $44,052
*Affordable means an apartment that costs no more than 30% of annual income.
Source: National Low Income Housing Coalition
