The report drew immediate responses from some affordable-housing groups, who say the government must do more to encourage the construction of low-cost housing and launch more programs aimed at turning renters into owners. But the study also suggests that LA could remain among the nation's most promising multifamily markets for investors for at least the next several years.

The report is based on figures collected from the 2000 US Census. It says that the nationwide homeownership rate climbed to a record 66% last year, meaning that only 34% of Americans rent instead of own.

But those figures were almost completely reversed in LA: Here, just 38.6% own while 61.4% rent. Only New York City has a higher percentage of renters, 69.8%.

Equally alarming, housing advocates say, is that the percentage of Angelenos who rent rose nearly one full percentage point between the 1990 census and the 2000 study. The increase came even as mortgage rates trended downward throughout the decade, helping tens of millions of Americans in other parts of the county to finally purchase their first home.

The Census Bureau report says several factors are contributing to the area's increasing percentage of renters. Salaries paid to workers haven't kept pace with the region's rising home values, few government programs are available to help first-time buyers, and many of the city's growing number of immigrants are stuck in extremely low-paying jobs that make saving for a down payment almost impossible.