[Research help for this article was provided by UCLA student Hunter Iwig]
The rent in LA has gone up 30% in the last three years. What the hell?
Three big things happened, two of them awesome, and one dumb. We decided living in cities was cool again (awesome), city centers are creating tons of new jobs (awesome), and we didn’t build very many new places to live in our cities (not awesome).
Living in cities is cool again (awesome)
In the 1950s and 1960s our cities stopped growing and people started moving to the suburbs.
We kept it up for a long, long time. But something has changed in the last 10-15 years. More and more people prefer to live in walkable, urban areas. Today, 52% of Americans say they would like to live in a place where they do not need to use a car very often. For millennials, it’s even higher – 63% say they want the walkable convenience of cities. City dwellers do less environmental damage and cause less traffic, so that sounds like pretty damn good news.
Cities are creating tons of jobs (awesome)
New jobs used to be created in suburbs. But since the Great Recession until 2011, that’s changed – cities are where the new jobs are. And, surprise surprise, people want to move to places where they can get jobs.
We’ve made it incredibly hard to build more houses in LA and other cities (not awesome)
First, a quick primer. You can’t build anything you want wherever you want. Zoning and planning rules dictate what can be built on any given plot of land.
In 1960, L.A. had a population of 2.5 million, but its zoning rules allowed for housing for 10 million if every lot was built to it’s maximum density. Today our population is 4 million, but our zoning rules only allow for housing for 4.3 million. And that’s just the most obvious example. Environmental reviews (like CEQA), multiple layers of review for new housing projects, and outright moratoriums on building are all used to slow building as well.
From 1980 to 2010 L.A. County built about 20,000 housing units a year. We needed 55,000 a year. The shortage has done exactly what shortages always do – drive up prices. The rent in LA went up by 75% from 1970 to 2011 – pretty bad. Since then, things have gone totally off the rails.
These trends are accelerating and spiking the rent way out of control. It’s gone up 30% in 3 years.
Sources: Trulia, Apartment list, and Smartasset
It doesn’t have to be this way. We know what the problem is, and we have the power to solve it. Congress doesn’t need to unfuck itself, Obama doesn’t need to pull off a lame duck miracle. Zoning rules are made at the local level, city by city. So let’s solve this thing. Let’s upzone L.A., build more houses, and stop rent from eating the world.
PS: We’re working on why most new apartments are luxury apartments, and why that isn’t quite as terrible as it seems. It calls for an infographic, so if you’ve got graphic design skills, or know somebody who does, drop us a line at [email protected]
[Originally published on the blog LA Rent Is Too Damn High]