Los Angeles is unique among American cities: it’s hugely desirable, with accompanying high housing prices, but it’s big enough that all the lower-income residents haven’t been pushed out yet, unlike in San Francisco and Manhattan. It’s also short on the high-wage jobs in tech and finance that those cities have, and hesitant to pass a decent minimum wage, let alone a living one. Plus, it’s lagging on building affordable housing. So while prices aren’t quite as high as the most expensive places in the US, wages are are much lower, and overall affordability is the worst. Literally the worst. Over at CityLab, Richard Florida reveals a new index comparing median housing prices to median wages across the US, and Los Angeles is the number one worst big city.
Florida presents the findings as the number of years it would take the average household income to cover for the average price for a house, which is a terrible measurement taken literally—most people put a downpayment on a house, then have monthly mortgage payments; most people still need to save some of their money for other stuff; and it doesn’t take into account interest or any other costs. But as an index for gauging relative affordability, it’s still quite useful (as he writes, “this metric is intended as a method of comparing the relative burden of purchasing a home by location.”).
Los Angeles comes in second overall and first among big cities for the number of years’ of average household salary it takes to cover an average house, at nine years. (Again, better to think of it as just as a nine on the affordability scale.) Compare to San Francisco, with higher housing prices, but also higher wages: it comes in at 8.8. New York City, same deal, has a pretty great-looking 5.8.
For single people earning a single income, Los Angeles is only the third least affordable big city, after San Francisco and San Jose—it takes 15.3 years of the average salary to cover the average house.
Senior Director, Coldwell Banker New Homes Division
With over 200 condominium, townhome and loft projects successfully marketed
“Fewer properties for sale with such remarkably low interest rates make it a great time to sell but a more difficult time to buy”