In expensive cities, rents fall for the rich — but rise for the poor

Los Angeles Rental Trends July 2018.png

With its desirable year-round climate and robust economy, Los Angeles continues to be one of the most expensive places for renters in the U.S., with median prices standing at $1,360 for a one-bedroom apartment and $1,750 for a two-bedroom, according to The national average is $1,180.

While developers have increasingly focused on building luxury apartments for affluent consumers, the shortage of affordable housing options in Los Angeles and other major cities has left middle- and working-class residents struggling to find - and remain in - the housing they are actually able to locate and secure. 

Policy reporter Jeff Stein writes today in the Washington Post:

The ongoing increase in prices for low-end renters poses a challenge for city officials who have vowed to lower housing costs for working-class residents already struggling with tepid wage growth in the U.S. economy.
City officials have said a boom in luxury housing construction would cause rents to fall for everyone else, arguing that creating new units for those at the top would ease competition for cheaper properties.
In part based on that theory, cities have approved thousands of new luxury units over the past several years, hoping to check high rents that have led more than 20 million American renters to be classified as “cost burdened,” defined as spending more than 30 percent of one’s income on housing.
But although some advocates say the dividends could still pay off for low-income renters, others say more direct government action is needed to prevent poor residents from being forced out of their cities or into homelessness. They have called for the federal government to help construct more affordable units, or offer greater rental assistance for poor families.
Rising rents for the poor threaten to add to the nation’s homeless population, and put an additional severe strain on tens of millions of families, often forcing them to forgo other basic needs to avoid losing their housing.