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Priced Out
Rent Affordability and Homelessness in Los Angeles
Alexander Casey, Zillow Policy Advisor
#HousinginAmerica 2
Priced Out Rent Affordability and Homelessness in Los Angeles - - PowerPoint PPT Presentation
Priced Out Rent Affordability and Homelessness in Los Angeles - - PowerPoint PPT Presentation
Priced Out Rent Affordability and Homelessness in Los Angeles Alexander Casey, Zillow Policy Advisor Rental values on a steady rise 2 #HousinginAmerica In many ZIP codes, rents are rising alongside national pace during the past five years 3
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In many ZIP codes, rents are rising alongside national pace during the past five years
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But across most of the region, rental prices have significantly outpaced the nation
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And in some areas, rent prices have surged over the past five years
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Pockets of exceptionally hot rent appreciation within Los Angeles
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Small spaces and high costs the norm for Los Angeles
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Share of median income required to rent typical home in Los Angeles Metro on the rise
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Share of tiered income required to rent home tiers, Los Angeles metro
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High incomes don’t fully cover for high burdens
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How We Got Here
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Job growth rising steady keeping pace with nation
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But wages have grown much faster in Los Angeles County
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For nearly a decade LA mostly added renters
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In many high-priced metros, significantly more new jobs came to town than new housing units were built
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Cities with the most land use restrictions see their home values grow faster when new jobs come to town
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Impact of Deteriorating Affordability
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While many areas can swap convenience for affordability, LA renters can find limited relief
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People who live in lower-cost areas of LA report lower levels of satisfaction with the job opportunities and education in their neighborhood
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As the share of income spent on rent has risen in many metros, working age adults have also increasingly doubled up
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As the share of income spent of rent rises, fewer people save any income
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People with higher rent burdens more likely to forgo health expenses
During the past 12 months, was there a time when you needed any of the following but didn’t get it because you couldn’t afford it?
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Findings from:
Inflection Points in Community-Level Homeless Rates
Chris Glynn, Thomas H. Byrne, and Dennis P. Culhane
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Rental values have been rising at a steady clip
$1,442
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Rental values have been rising at a steady clip
$1,442 $1,859 $2,136 $2,369
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Rental values have been rising at a steady clip
$1,442 $1,859 $2,136 $2,369 $2,756 $3,403
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Nationally, rents are up. Yet homelessness counts have fallen
$1,442 554K
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Modeling for the systemic undercount from PIT estimates
547K Point in time count
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Modeling for the systemic undercount from PIT estimates
547K Point in time count Predicted count 660K
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Los Angeles, a totally different trend
Point in time count Predicted count 73K
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When a community reaches an affordability tipping point, the link between rent burdens and homeless rates grows stronger
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In some places, a median-income renter already pays more than 32% of income to go out and rent the typical home
32%
Los Angeles, CA San Francisco, CA New York, NY Boston, MA Seattle, WA Portland, OR Las Vegas, NV
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Clusters of communities experience similar responses to changing rent prices
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Cluster 3 is home to 15% of the U.S. population and 47% of the homeless population
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If rent affordability worsens in Cluster 3 cities, the model predicts an increasing homelessness count
District of Columbia CoC If share of income needed to rent a home increases…
104
Predicted change in homeless count
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And in Los Angeles this link is even stronger
District of Columbia CoC Los Angeles City & County CoC If share of income needed to rent a home increases…
104 11,591
Predicted change in homeless count
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Clusters 1 and 2 not in the clear
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Potential spillover effects in Riverside
55,188 34,622 2,406 6,203
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Decomposing the components to homelessness
Baltimore City CoC Los Angeles City & County CoC
Hypothetical baseline Estimated homelessness rate
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Decomposing the components to homelessness
Baltimore City CoC Los Angeles City & County CoC
Hypothetical baseline Estimated homelessness rate
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Rising rents can leave even the households who receive assistance few options
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Housing assistance has lagged behind Los Angeles rents
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Rising rents can leave even the households who receive assistance few options
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Los Angeles City & County CoC If share of income needed to rent a home increases…
11,591
Predicted change in homeless count
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