Los AngelesThe median-income earning household in Los Angeles would need to earn 25% more to afford the median rent in the city, according to a new report from Apartment List. The median household income in Los Angeles is $56,245 and would need $13,835 or $70,080 more to avoid becoming cost-burdened by rent for the average two bedroom. These numbers place the hourly wage to afford a two-bedroom apartment at $34 per hour.

There are a variety of factors impacting rents in Los Angeles, but the primary issue is an imbalance between supply and demand. “The good news is that all cities with a high quality of life are going to have high rents relative to wages, and L.A. continues to be a great place to live,” Igor Popov, chief economist at Apartment List, tells GlobeSt.com. “The bad news is that a lack of dense construction may be keeping prices artificially high, so that housing supply isn’t rising to meet demand. Both lead to high rents.”

In addition to rising demand and a shortage of housing and new construction, there is also a lack of single-family housing development in Los Angeles. That is keeping people in rental units longer than before. “A lack of dense housing development is one factor, but single-family home construction has also been lagging since the financial crisis,” says Popov. “Moreover, on the demand side, more high-earning households are choosing to rent instead of own, putting more upward pressure on rents.”

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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