High Cost of Housing as a Source of Poverty in Los Angeles

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The high cost of living in Los Angeles

The high cost of living in Los Angeles is a big problem in the state of California. According to an American Census Bureau survey conducted between 2013 and 2015, the county ranked 17th, with a poverty rate of 15%. The level of destituteness in Los Angeles is shocking. In reality, in 2016, the rate skyrocketed to 20.6 percent, making it the highest in the nation. Pauperism is more visible in this district, which is just 469 square miles in size but has a population of 3.9 million, as reported by Lee (232). Even so, reasonable location, affordability, and decency is the description of the lifestyle every resident of Los Angeles yearns for. Unfortunately, the cost of housing in the county and most specifically the city is too high. High housing costs has driven most residents of Los Angeles into poverty. It is amazing how employees with low income manage to survive in the city yet the exorbitant rents compel them to part with approximately two thirds of their earnings. What this means is that folks are left with dismal amount of money to spend on essential needs like food, transport and healthcare. Majority of households in Los Angeles struggle to acquire affordable houses which can as well meet their needs. Therefore, this paper seeks to provide an overview of the extravagance and complexity encompassing home prices and rents in Lost Angeles.

High Housing Cost as a Cause of Poverty

The following are some of the ways in which high cost of housing contributes to poverty in Los Angeles:

According to Lucy (26), a greater percentage of households spend a lot of money in paying rents because housing has become such a large financial consideration. Therefore, families have to come up with careful decisions concerning the location, cost and amenities of such homes. The annual median income of household in California State is $9000, a figure which above the national median. Hence for majority of Californians and most particularly residents of Los Angeles, the high cost of housing consumes a bigger portion of their wages. The average people living in the city spend close to 30% of their salaries on housing. This is opposed to people from the rest of the country which spends approximately 23% averagely.

Similarly, De La Cruz- Viesca et al (16) affirm that the low income earning residents of Los Angeles are affected. The consequences of the high cost of housing is however greater on their side because of their meager income. They spend more than their counterparts, hence are left with fewer resources for other expenses and savings. For instance, their housing expenses shoot up to 67% which is 11% higher than what is spent by other low-income earners in different parts of America. As a result, these city dwellers end up living a life of paycheck to paycheck. From the discussion, it is very evident that the high cost of housing in Los Angeles is indeed a great challenge to the city’s low-income families. Furthermore, Lee (336) highlight that high costs of accommodation may as well increase the fragility of personal finances. This means that only a small amount of a person’s income is made available for goods and services which are non-housing. Consequently, such families strain in a bid to accommodate an emergency which is not accommodation related simply because of unavailability of savings.

Families’ Inability to Own Homes

Guerrero, Henwoods & Wenzel (46) assert that the Federal government has always advocated for ownership of homes. This has been happening since the housing finance system was restructured during the Great Depression. Therefore, from the 1940s, the rate of homeownership grew steadily, hitting 70% by the 1980s, however, this was before the intrusion of the housing crisis. It is important to note that homeownership helps families to accumulate wealth because they are capable of amassing wealth over time. To the homeowners, there is automatic saving on each passing month. The payment of mortgage reduces the amount owed by a household, therefore becoming the equity of the homeowner. For those who rent their places of accommodation, savings mean voluntarily foregoing some of the near-term expenses. Guerrero, Henwoods & Wenzel (49) further state that research carried out in Los Angeles in 2013 indicated the annual average median net worth of a renter totaling to $5,400 whereas that of a homeowner standing at $195,000. The difference between the two groups of people is very evident, thus exemplifying the benefits of owning a home. In spite of the benefits, homeownership might be quite a challenge to many in Los Angeles because of the high costs of housing. Therefore, just a handful are capable of owning homes. This means that the remaining majority who rent their places of accommodation are not in a better position to amass wealth like their counterparts.

On the same note, Ray & Jimenez (10) contend that families who manage to purchase homes later in life do so but on huge debts. Because of the high housing prices within the city, most of the youths delay in purchasing homes. This happens because, most probably, large amounts of money needed to purchase homes require a lengthened period to gather. As a result, those yearning to be homeowners have to wait a little bit longer to do so. Additionally, the families which are lucky enough to purchase homes are typically forced to take on more mortgage debts. According to 2013 statistics in Los Angeles, homeowners in Los Angeles have mortgage debts of $55,000 as opposed to an average homeowner in other parts of the USA who register approximately $38,000 in debt.

Crowded Housing

According to Lucy (27), crowded housing is measured by making a comparison of the number of rooms in a house to the number of people who reside in the house. There exist many other apparatus which can be employed in defining the statement; however, this research paper will analyze the notion as the presence of more than one occupant per room. It is worth pointing out that crowded housing may have a negative impact on the academic achievements of learners. Such occurrences are most likely in Los Angeles where family members are four times more likely to reside in crowded houses. Nevertheless, in adults, overcrowding in houses has been associated with aggression and stress thereby weakening the relationship between adults and children. Since the occupants of the house lack any form of distraction, they interact more often and many a time, adults project their aggression to the young ones. As a result, the school-going children are psychologically affected, thus being unable to display good performance in school. However, as much as it may seem that overcrowding houses reduces costs, it actually increases.


Considering the magnitude of the housing problem in Los Angeles, legislatures should focus on changes that would promote the construction of additional houses within the city. There is a need to give the challenge such a comprehensive approach so that the matter is addressed from multiple angles. For instance, there are local government policies that should be amended if people living in Los Angeles are to be saved from the menace of high housing costs. The Federal government, in consultation with the local government, should make changes on the local finance, the land use authority, and the California Environment Quality Act (CEQA) since they would be very necessary in addressing the high costs of accommodation in the city. CEQA has, for a long time, been used as an excuse by some anti-development selfish individuals. Therefore, one of the moves in ensuring an end to the housing crisis in Los Angeles is by eradicating CEQA. Even so, people should also understand that some of these factors cannot be controlled by the policymakers, for instance, urbanization and unfavorable topography for development are uncontrollable. As a result, there are sections in Los Angeles where the cost of housing may remain higher than average despite all forms of intervention from the local authorities. Notwithstanding, the state government can still help to a greater extent in the promotion of more construction of housing. This is possible through sensitization of the public about the benefits of living in the countryside and how life in such places can be improved. People will be discouraged from relocating to town centers. On the same note, the environmental laws can be harmonized to avoid exposing the very people they protect to danger.


Indeed, high housing costs are one of the major causes of poverty in Los Angeles. Accommodations being a basic need for human beings, the residents of this city have no other option but to strive so that to secure a space to lay their heads when night falls. The most affected section of citizens is those whose income is low. They are compelled to spend close to 30% of their meager salaries on housing thus left with very little money to even afford some other basic amenities like food. Nevertheless, such inadequacy can be curbed if the Federal government, in collaboration with the local state government, employs the appropriate measures.

Works Cited

De La Cruz- Viesca, Melany, et al. “The Color of Wealth in Los Angeles.” Report produced by Duke University, The New School, and University of California, Los Angeles (2016). pp.13-21.

Guerrero, Erick G., Benjamin Henwood, and Suzanne L. Wenzel. “Service integration to reduce homelessness in Los Angeles County: Multiple stakeholder perspectives.” Human Services Organizations Management, Leadership & Governance, 38.1 (2014): pp. 44-54.

Lee, Dayne. “How Airbnb Short-Term Rentals Exacebate Los Angels’s Affordable Housing Crisis: Analysis and policy Recommendations.” Harv. L. & Pol’y Rev. 10 (2016): pp.229-338.

Lucy, William. Foreclosing the dream: How America’s housing crisis is reshaping our cities and suburbs. Routledge, 2017. pp. 24-34

Ray, Rosalie, Paul Ong, and Silvia Jimenez. “Impacts of the Widening Divide: Los Angeles at the Forefront of the Rent Burden Crisis.” UCLA Luskin School of Public Affairs: Centre for the Study of Inequality (2014):pp. 1-20.

October 25, 2022

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