Advertiser Disclosure

You Couldn’t Convince me to Move to L.A.

Ah, Los Angeles. A city of movie stars, pampered pooches, and string bikinis – but also beautiful beaches, endless sunshine, high-tech jobs, and plenty of health-conscious shops and fresh farmer’s markets.

There’s certainly plenty of allure to the City of Angels.

But there’s no way you could pay me enough to move there.

In a funny way – but really, it’s not funny – that’s almost literal. The cost of living in L.A. is insane. Sperling’s reports the cost of living for housing in L.A. is more than three times the national average. Many people living in L.A. do not get paid enough to afford a home there.

The city is facing an affordable housing problem, and it’s beginning to affect the workforce, according to a survey released recently by the University of Southern California and the Los Angeles Business Council Institute.

Let’s break it down

Experts say that people who take on debt that is more than 43% of their monthly income tend to have a harder time paying it back. It’s so widely accepted that most banks won’t approve a mortgage if it will push you over that limit.

In L.A., income for a typical household was $56,196 in 2015. A family making that much could, in theory, afford to owe $2,014 each month for all its bills – house, car, credit card, student loans, and any other debt.

But how much does a house cost?

Median home value for Los Angeles County in 2015 was $441,900. Even with a 20% down payment, monthly payments for a house at that price would be $$2,198*. That’s $184 more than the typical household can afford – and that leaves no room for student loans and car payments.

That’s from the Census Bureau, and a couple of years old. The California Association of Realtors reports actual sales prices are higher, reaching a median of $474,550 in March, or $2,354 per month.

Maybe renting would be better?

Maybe, but not much. Average rent was over $2,100 a year ago, and prices have continue to rise. The report from the California Housing Partnership showed the city needs 549,197 properties to address the affordable housing problem.

With housing costs that high, and continually on the rise, you couldn’t convince me to move there.

*Calculated based on a 20% down payment, 4% interest rate, 1.16% property tax rate, and estimated insurance premium of $1,000.


Related Articles

City Incentive Programs For Movers

Nearly 16 million people moved because of the coronavirus. A definite part of this trend is city-dwellers that are beginning to flee their metropolises in search of a quieter – and more affordable – life. More people moved from busy metropolitan areas, such as New York City, Los Angeles, and Washington, D.C., while areas like […]

Read More
City vs. Suburb: What’s Cheaper?

As if you didn’t have enough to think about when choosing an apartment, you may also need to decide whether to live in the city or a nearby suburb. City vs. suburb is an age-old question whose longevity is contributed to by the fact cities tend to go through multiple cycles of growth, decline, and […]

Read More
How to Get to Know The History of Your New City

If you recently moved, you may be eager to get to know your new city. You might check out the local nightlife, festivals, or farmer’s markets, and you will almost certainly familiarize yourself with such staples as the closest grocery store, bank, and post office. Beyond these basics, though, you might find yourself wondering about […]

Read More