Rents Squeeze Working Poor in Southland

A couple holding down two minimum-wage jobs would each have to work 11 hours a day, seven days a week, to be able to afford the typical $1,140-a-month rent for an apartment in Los Angeles County, a new study shows.

The study, released Thursday by the Low Income Housing Coalition, a Washington-based group, found that 760,000 Southern Californians earn the state’s minimum wage of $5.75 an hour, or less than $12,000 a year. As a result, the report said, many cope with soaring rents by living in overcrowded units or in slum housing.

“There are a lot of $6-an-hour jobs, but not a lot of $6-an-hour apartments, or even $10-an-hour apartments.” said Jan Breidenbach, executive director of the Southern California Assn. of Non-Profit Housing. “We have a crisis in affordable housing.”

The findings of the study, which compares rental housing costs with minimum wages, pose a serious threat to the Southland’s economy, which is enjoying its longest peacetime expansion since World War II.

Low-paying service jobs comprise the bulk of employment growth statewide. But with people paying a larger percentage of their income for rent, they have less money to spend on food, clothing and other consumer products that keep the economy humming.

In addition, high housing costs force businesses to pay higher wages to recruit and retain employees. That in turn makes their products and services more expensive in a competitive global marketplace. A decade ago, those forces were major contributors to what became the recession of the early 1990s.

“The implications are that this could put the brakes on this economic expansion,” Breidenbach said.

The inability of the working poor to find good housing also affects the quality of life in Southern California, from longer commutes that clog area freeways to more pollution that lowers air quality.

Thousands of minimum-wage earners are coping with rising rents by living in overcrowded housing, estimated by the federal government to affect one out of five Southern California renters--one of the highest rates in the nation--or to live in slum housing. To ease the situation, the study urged the state to raise the minimum wage, and for state and local governments to provide more money for the development of affordable housing.

For poorer families, the Southland’s record-high rents put them in a precarious position. In Van Nuys, Elizabeth Bucio, and her husband, Juan Carlos Leon, who are raising three children, have been served an eviction notice from their modest apartment.

The family, supported by Leon’s minimum-wage job as a chef’s assistant at an upscale Santa Monica restaurant and Bucio’s income as an Avon saleswoman and babysitter, can stretch their budget to afford the $650 a month in rent. But their landlord has decided to demolish the 100-unit building where they live to erect one that caters to affluent seniors.

Bucio and Leon have gotten on waiting lists for smaller or shabbier places than where they now live.

A typical two-bedroom unit in Van Nuys goes for $950 a month; a one-bedroom apartment in Santa Monica, $800 a month.

“We can’t afford that rent with the wages we’re earning right now, even for a one-bedroom apartment,” Bucio said through an interpreter. The family looked at a small two-bedroom unit for $700 a month, but they lack the $1,425 in deposit money that apartment requires, as well as the extra money for moving expenses.

“Right now,” Bucio said, “I don’t know what we’ll do.”

Housing costs have been rising sharply throughout the Southland for more than a year as the construction of homes, apartments and condominiums has lagged far behind job growth. Los Angeles County leads the nation in housing demand, with six new jobs created for each new home that is planned. Other Southland counties are not far behind. The result is that housing prices are expected to escalate even higher, further driving up rents.

“We see this throughout the state, and it’s a grave concern in Southern California, where we expect the most growth over the next five years, that affordability is a major factor,” said Cathy Creswell, acting deputy director for housing policy at the state Department of Housing and Community Development.

The survey was based on average apartment rates gathered by RealFacts, a Novato, Calif.-based firm that calculates rents in cities throughout the state. The company surveys complexes with 80 or more units, which tend to be newer and pricier. However, those units tend to pull rents in the rest of the market higher.

Creswell said that 195,000 single-family and multifamily housing units are needed statewide to accommodate growth, but “no place in the state is keeping up.”

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Out of Reach

At $5.75 an hour, minimum-wage workers in California do not earn enough to afford the average two-bedroom apartment. In Los Angeles and Orange counties, a minimum-wage household must work more than 150 hours a week to pay the rent.

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*Hourly wage needed to afford an apartment at fair market rate.

Source: Real Facts, U.S. Dept. of Housing & Urban Development, Southern California Assn. of Non-Profit Housing

The Struggle for Decent Housing

A new report says low-income residents of Los Angeles are working longer than ever to afford decent apartments--while hundreds of thousands of others settle for overcrowded units and slum housing. C1