How much do you need to earn annually to afford a house in Los Angeles?

[Zorro]

The annual income needed to buy a home in Los Angeles skyrocketed past $220,000, a recent study found, with higher mortgage rates and inflation cutting deeper into household incomes.

That means the ability to own a home is a goal inching further and further away from more families and households in Los Angeles, where the median annual household income in 2020 was just over $65,000.

According to the residential real estate firm Redfin, the yearly salary needed now to buy a median-priced home in the city and comfortably make the mortgage payment is now $221,592, up nearly 41% from last year.

In Los Angeles, the high cost of housing has also played a role in making it the most overcrowded large U.S. county.

Across the U.S., home buyers need to earn $107,281 a year, or 45.6% more, in 2022 compared with the previous year to buy a typical home, the study conducted by Redfin found.

https://www.latimes.com/california/story/2022-12-01/you-need-earn-more-than-220000-year-buy-house-in-los-angeles

[Yavin4]

1. Los Angeles, like most of America, needs to build more housing.

We need more densely populated urban areas with multi-family, affordable homes. These urban areas need to reclaim land dedicated to car dependency.

[SunSeeker]

2. NIMBYs in $1M+ houses don't want dense development near their homes.

My Republican neighbors in Orange County are trying to stop a 250 townhouse development on nearby commercial property, claiming it will ruin our beach town with crime and traffic. Funny how anti-business Republicans can be...

[SlimJimmy]

3. What would the impact be?

How many people are we talking about in those 250 Townhouses? Are they going to be low income, criminals? See where I'm going here? It just seems like a kneejerk reaction from the current residents.

[SunSeeker]

5. CA law requires some homes out of each development be affordable for lower income.

This project would have 77 such homes. Of course, lower income under California law is not what anyone else in the country would consider low income.

Most CA affordable housing programs and laws target "lower income" households which, in most counties, are generally households who earn less than 80% of the area's median household income, which in my beach town is $72,596. Thus, what constitutes affordable/lower income housing varies by area.

The cheapest houses in my beach town are running close to $1.5M right now (the median home price is $2.575M). How much do you need to make to be able to afford a house that costs $1.5 million? To afford a house that costs $1,500,000 with a down payment of $300,000, you'd need to earn $223,820 per year before tax. The monthly mortgage payment would be $5,222. The average salary in CA for a CPA is $161,666 per year.  The average salary in CA for a physician is $212,853. My neighbors' own children can't afford houses here. They themselves need access to affordable housing.

But my idiot racist Republican neighbors hear "affordable housing" and they think black gang members will be moving into town.

[Yavin4]

6. Where do people expect the working class to live?

Where do they expect food service workers, nurses, gardeners, etc. to live and be able to get to work?

[Bettie]

9. I don't think people

really think about that, they just figure they're living...somewhere else.

[Yavin4]

10. When basic services start disappearing...

...like restaurant and grocery store closures bc they cannot find staff to run them, then they will understand. The neighborhood kids won't take these jobs because they'll be too rich.

[Bettie]

13. I have never lived in CA

so, I don't know. Are there places where normal people (not highly compensated or rich) can find places to live for a price they can afford?

[Yavin4]

14. Typically, they rely on immigrant families living in cheap, extended stay motels

Or multiple families living in one house. Without immigrants, most cities in the U.S. would crumble economically.

[Bettie]

15. And yet, every day

I see people advocating for more people living in large cities.

The problem is, rich and well-off people move in and ensure that the working class don't live anywhere near them, by pricing them out and buying the few smaller houses and building much larger and more expensive ones in what were once middle class neighborhoods. I saw a lot of that when I lived in Northern Illinois.

I dislike that I live in a small red town, but even in Iowa, buying a much smaller house in Cedar Rapids or Iowa City would cost more and have less space, inside and out. So, we accept that we're 40 minutes out. Plus, DH's job is driving from hospital to hospital fixing machinery, so where we live isn't an "I need to be near my work" issue.

[maxrandb]

7. It is also a water issue

More homes mean more water and utility usage.

This has been an issue for years. I can remember having to live 65 miles away when I was stationed on North Island on San Diego. Try that commute everyday.

[Sympthsical]

8. More or less my neighborhood

There's a public hearing about developing land near me (there's a lot of open land in my area).

The neighbors are furious. The think the valley should've been frozen in time twenty years ago.

It's the Bay Area. People need homes. Now, will that developed land merely result in more $1 million homes?

Yes, yes it will.

[Initech]

4. How much ya got?

And even that's probably not enough.

[Takket]

11. Here's a great resource for living wage questions

https://livingwage.mit.edu/

[Yavin4]

12. Those numbers are waaaaaayyyy off

There is no housing for someone in NYC for $2K a month. Not without roommates. There is no living in NYC on $50k a year. It's simply not possible.

[Takket]

16. i'm sure not in Manhatten but NYC is a huge place that accommodates all income levels

Their calculation pretty much budgets $1500 a month for housing. I'm sure that exists somewhere in NYC

[Yavin4]

18. LOL!!! The median rent in NYC is $2000.

And the cheaper apartments are in the worst neighborhoods.

[Hekate]

17. Two incomes & a renter in one of the rooms. That was our reality in Santa Barbara in the early '80s

We actually bought our first home in unincorporated Goleta, next door to the town of SB, which was slightly more modestly priced, but still.

My not-yet husband was justifiably proud of his income as a programmer/financial systems analyst and thought my income as a secretary at the university wouldn’t count much. Imagine his chagrin when our conversation with the loan officer turned to: are you planning to rent out one of your rooms? I promptly said yes — though we never did.

It was a nice but modest house in a similar neighborhood with a good elementary school close by. Density? Very. Cars parked in the street and the occasional permanent RV at the curb with an electrical cord snaking into the house told the story, as did curtains in garage windows.

I know the housing shortage in LA is brutal. Density is their future and ours, I’m sorry to say. It’s built out as much as it can be, and they’re going to have to invest in rental housing people can afford, not that joke of attaching a small handful of “affordable” units to expensive tracts and upscale condos. They’re also going to have to legalize and regulate the infilling that already takes place: allow separate granny units and bring garage units up to code for human occupation.

Meanwhile, in my former area, my daughter tells me the homeless population is increasingly visible and evidence of drug use is in the public parks. She’s so badly priced out of renting, she’s leaving. The working poor need a place to live — and she and her partner are both working and supporting their combined 5 children, and they are poor.

Even for the poor, it’s two incomes and sublet one of the rooms when push comes to shove.