South Los Angeles has seen the biggest growth in the population of 20- to 29-year-olds in the city, according to research from JLL. Since 2000, the population of 20- to 29-year-olds has increased by 20% in South Los Angeles as a result of affordability. The market is 47% less expensive than the rest of the L.A. metro area, and it offers access to public transit. For companies looking for talent, following these migration patterns can be crucial. To find out more about why young people are heading to South Los Angeles, how companies have responded and how the population growth has impacted affordability, we sat down with Amber Schiada, SVP at JLL research, for an exclusive interview.
GlobeSt.com: Why is it important to track migration patterns, like this?
Amber Schiada: One of the big issues in California, throughout the state, is that there is a housing crunch. There is a short supply of housing that creating really expensive housing throughout the state. The reason why we look at this is because when companies are looking to grow and expand their presence, one of the things that they are increasingly concerned about is not only transit and accessibility but also housing. They want to make sure that their workforce will have a good quality of life and be able to afford where they are living. We started to look at the demographic trends, and how those demographic trends correlate with what is happening with housing.
GlobeSt.com: Why has there been so much growth in the number of 20- to 29-year-olds living in South L.A. since 2000?
Schiada: Here, we are looking at the 20- to 29-year-old cohorts. We are not looking at millennials or people born between certain years. Instead, we are looking at people who are in that age group at those two given points in time. A lot of out clients want to know where the young workforce wants to be. We noticed that the boundary that we have outlined and defined as South L.A. had 151,306 people in that age group in 2000, which was an increase of 20% the 2000 to 2016 year time period. In the South Bay, where we are also seeing an uptick in that age group, there was about an increase of 6% with 114,615 people in that age group. That is a pretty significant increase. If you look at L.A. overall, there was only a 7.8% increase of 20 to 29-year-olds. There has been the most rapid increase in that South L.A. area, and the reason that I think we are starting to see a lot of growth there is because that is one of the last affordable housing markets in the city. If you are thinking about buying a home, it is cost prohibitive in places on the Westside.
GlobeSt.com: Have companies also started to migrate to South L.A. to follow this segment?
Schiada: We haven’t seen companies move into that South L.A. market because it really isn’t a viable office market. It is largely industrial and residential. We have seen that more tenants are touring markets like Downtown Los Angeles and the Arts District as one of the places where they might want to expand because they are starting to see a lot more people come from south and east of Downtown, and some clients are concerned that they are missing our on talent because the commute is too far if they are located on the Westside. As companies are expanding or thinking about second locations or site selections, downtown has increasingly become part of the conversation.
GlobeSt.com: How has the migration to South L.A. impacted affordability since 2000?
Schiada: I don’t have data going back that far, but I can send facts on housing that go back to the earlier part of this cycle, so 2012 and 2013. If you look at single-family pricing, in 2012 through 2017, a lot of the markets in the South L.A. corridor have seen the most price appreciation. Lincoln Heights, for example, saw a 126% median home price appreciation in the last five years. Montecito Heights saw 189% median home price appreciation in the last five years. Now, 20- to 29-year-olds aren’t typically buying homes, so there are caveats. Part of the home price appreciation story is that in the last five years, we have seen rapid price appreciation, but that is because it is a more affordable neighborhood for first time homebuyers. So, it is hard to say. However, it is still interesting that the most increase in this cohort has been in this neighborhood.