Los Angeles & the housing crisis: a history of how we got here

Across the entire U.S., housing has become one of the most pressing issues for city dwellers. Rent and inflation have skyrocketed, and tens of thousands of people have been pushed out of their homes. Since the 1980s, urban centers, such as Los Angeles and New York City have simultaneously experienced housing crises, accompanied by an explosion in homelessness. Although the United States has always had an unhoused population, the number of people and the face of those people have changed drastically in recent years. Today, our housing crisis has made renting unaffordable, left extremely limited options, and pushed so many out of their communities. Homelessness is our modern day crisis.

Interestingly enough, the two largest urban centers, Los Angeles and New York have parallel experiences with the housing market and comparable rent pricing. In the 1970s, housing prices were relatively inexpensive in both cities. However, in New York, from the 1970s to 1980, the average rent jumped from $335 monthly to $1700 monthly, over a 500% increase. By 1999, the average rent in NYC nearly doubled to $3,200 a month. In Los Angeles, the picture is quite similar. In 1980, median rent in Los Angeles was $838 monthly. Today, median rent in both cities hovers around $2,500, representing a similar housing crisis for New Yorkers and Angelenos alike.

The shift in wealth from the many to the few began in the late 1970s and rapidly shifted in the 1980s, the exact same time that rents began to skyrocket across both New York and Los Angeles. Our unprecedented rates of wealth and income inequality have been the strongest explanation for the modern housing crisis that we now face. Housing, being almost entirely unregulated, was left to the desires of New York City landlords. What is most interesting about the rise in rents in New York and Los Angeles is the inability to point fingers in any single direction. Landlords across the city have simply sought to maximize profit by increasing rental prices and targeting higher income individuals that are able to pay more.

Without constrictions of residential policy, under the new era of wealth and income concentrated at the top of the economy, real estate builders were in the position to pursue their desires of building new unsubsidized, high-income housing across the city. Affordable housing was not being built. On the contrary, affordable housing has simultaneously been taken out of the rental market in both New York and Los Angeles. Mitchell-Lama, the largest affordable housing policy established in New York City which produced over 115,000 units of affordable housing, has speedily been taken out of the market due to expiring regulations. With a growing upper income class and an even faster growing lower income class, alongside the hollowing out of the middle, new development targets high income individuals. As the story goes with rampant inequality, there becomes heavy populations on each side of the spectrum of wealth, putting an even heavier weight on the lower income end. Low income individuals are now pitted against each other for low-rent housing.

More serious than increasing the high-rent housing supply, is the decrease in the supply of low-rent housing. The decrease in vacancy rates for low-rent housing supply New York has been directly linked to increases in homelessness across the city. From just 1970 to 1990, units renting under $304 decreased by half in just a 20 year period. In the two decades, homelessness doubled. This was the scenario we saw in New York in the short time span between 1987 and 1990, where homelessness dropped from 27,000 to 18,000 when there was a slight increase in low-rent housing. The same scenario is mirrored in Los Angeles, where the high-rent luxury market has high rates of vacancy, but low-rent housing is squeezed with low rates of vacancy. The ability of high-income individuals to rent those same low-rent units further decreases the total available supply for those without many options to begin with. Lower levels of vacancy push rents higher, the affordable housing supply falls further and farther away from those who are most desperate, and many are pushed out of the housing market entirely.

In New York, the next option of housing outside of the market is the shelter system that the city is required to provide. Since 1979, under the Right to Shelter, anyone who is in need of a bed has a “right to shelter” and must be provided one. This produces the current burgeoning shelter population that the city has continued to divert billions of dollars annually to maintain and expand. New York City has a nightly shelter population of about 52,000 people with only about 3,400 people living on the streets. For Angelenos, the next step out of the housing market is the streets. Only 32% of the unhoused population lives in shelters. The remaining 68% is spread across the city streets day and night. The cities are almost identical in their rate of homelessness, but their policy approaches are vastly different.

Neither city, however, has managed to properly deal with the housing and homelessness crisis. Policy approaches have not gone after the root causes, the lack of affordable housing for those of the lowest income. If Los Angeles or New York wish to make a dent in the ever growing unhoused population, they must treat it as a symptom of the underlying illness: an ever increasing rental market.

This article is the beginning of a series about Los Angeles housing issues and solutions. If you have information or a story you’d like to contribute, please reach out to byersj@usc.edu.