As record number of Americans rent, many California tenants teeter on the edge of homelessness
Inside Subprime: December 5, 2017
By Caroline Thompson
More American households are renting today than at any time since 1965, a Pew Research Center analysis of Census Bureau data has found. According to the study, the total number of U.S. citizens currently renting their homes rose from 31.2 percent in 2006 to 36.6 percent in 2016. Not since 1965, when the U.S. rental rate was 37 percent, have so many people called rented accommodations home.
Young adults under 35 are renting at a much higher rate than older generations, at a much larger proportion than they were even 10 years ago. Pew found that 65 percent of adults under 35 were renting in 2016, compared with just 57 percent in 2006 – an 8 percent jump in just a decade. Additionally, households headed by black and Hispanic people were twice as likely to be renting as households headed by whites. Overall, 54 percent of Hispanic households and 58 percent of Black households were renting, compared with just 28 percent of whites.
This surge in renting was likely spurred by the housing crisis, and further encouraged by wage stagnation and the rising cost of living. While renting may be less expensive than buying a home, many renters, especially renters in high-cost states like California, are finding it more and more difficult to make ends meet.
According to an article in The Los Angeles Times, 29 percent of Californians were putting more than half their monthly incomes towards rent and utilities in 2016, and 54 percent of Californians were shelling out more than 30 percent of their monthly incomes to keep a roof over their heads. A study from Apartment List found that while income (adjusted for inflation) did increase 13 percent from 1980 to 2014, the median rent increased 55 percent – far outpacing earning increases.
As a result, many L.A. County renters are just a 5 percent rent increase away from becoming homeless, according to a study done by real estate site Zillow.
“I don’t think it’s any stretch that our homeless numbers are going to rise,” said Elise Buik, chief executive of United Way of Greater Los Angeles. “We have so many families on the edge.”
In California, the problem goes beyond the lingering effects of the housing crisis and wage stagnation. Apartment construction has faltered, meaning competition for existing units is at an all-time high, and the population is still growing. Landlords have the upper hand, and can essentially charge however much they want and still fill their properties with willing tenants.
Additionally, the surge of start-ups and major tech companies making their homes in California have added a great number of well-paying jobs to the economy, and while this is good news for the people who have those jobs, it’s bad news for everyone else. Well-paid workers have sharply driven up the cost of living around the state, making it very difficult for low-paid and gig-economy workers to find housing within their budgets.
Food banks and shelters around the state believe the rising cost of living is responsible for the increased number of people – people with full time jobs – using their services.
“We are hearing more and more people say, ‘I am working … but the rents are just killing me,’” said Michael Flood, president of the Los Angeles Regional Food Bank.
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