why is rent in la so high? (Los Angeles, Ontario: middle-class, transplants)

[Cletus Awreetus-Awrightus]

It is "supply and demand", however, the forces of supply and demand in real estate/mortgage markets are extremely complicated. Real estate is a very, very highly regulated market.

Rents are high because the mortgage payments are high for owners.

Mortgage payments are high for owners, because land is overcapitalized.

Land is overcapitalized because it (more or less) constitutes the assets on which the U.S. dollar is valued in the first place; we typically expand the monetary base in this country by bidding up the price of land.

TL;DR - Our monetary system drives up land prices and rents. This is not an LA thing, although LA is expensive -- this happens across America, and any other countries whose monetary systems are similar in structure to the U.S. (look at rents in Australia, NZ, the UK, Netherlands, etc.)

[yamota]

the lesson here is, if you want to live in LA, DON'T BE POOR

[thethinkman]

Most of your answers cant make sense. Because if it were really a supply and demand issue. Why more rent signs I've ever seen ..obviously more supply then demand yet at triple the cost......used to live in Venice and now I'm back. Basically all old neighbors are gone. Anyone who used to own houses is gone and replaced with people paying extremely high mortgages to the bank and it seems like the bank owns the whole city. "I guess if I had a money printing machine I would buy the city too" it almost seems like a slave labor situation. Ill explain. 70% of income for a 30 year mortgage. " graduate college 25 retire 55" which is basically your entire working life. Is 70% of your income " or more" for your entire working life slave labor? Well I guess you do get a roof over your head.

Also think about this . When you buy a house you go to the bank for loan. What if bank says they will give you a billion dollar loan. Then tell the next he gets a billion too and everyone gets a billion. Wouldn't home prices just got a billion dollars. Also lets take the opisite in account. What if all banks stopped loaning. What would the house be worth? Probably what people can actually afford. And I don't check everyone's bank account but I doubt any middle class family has 1million for a house. So maybe the houses real value "without the home loan system" would be 30,000 or 50,000 like it used to be.

Am I wrong here or are we basically no different then Chinese. Just work all day and then
At the end of the day get a roof over your head and bank takes everything because they printed the money and loaned it to you. I guess there are perks involved when you print money. Like being able to buy the world. "If the worlds currency happens to be the money you print" does this money really have value other then foolishly trading it amongst each other?

[thethinkman]

I might be over thinking here a little. But I can't figure out why everything has changed so much. Its like I just woke up in a different country. I used to make 80k fixing air conditioning and heaters. Now the same job pays 35k but harder to get and everything cost more.

I guess unless your in the banking / mortgage business your customers have little cash for you.they spend it all on rent and food and $5a gallon gas that no more money for other things like fixing your heater.

I've noticed everyone is sharing rooms now and 2 or more family's per house. Just 15 years ago if you did that your neighbors would call the police on you and the city you would say you're living in unsanitary conditions. The only people doing that used to be mexican and asain immigrants . Now white americans all living "dormatory style"But now it seems as though everybody is sleeping this way and the city is just approving.

[JohnG72]

Thinkman...you are over thinking things.

At $35K/year, you get roommates or live in a small studio or guest house. Max rent should be $800/mo, $600/mo is better.

Venice is a wealthy area....at least for people moving into the area. It used to be a blue collar, even dangerous neighborhood 20 years ago. That is no longer the case. Housing stock has changed and the price of the area has changed.

[thethinkman]

Studio for $600 sounds like 1990s prices I doubt this. I've seen studios 1200 and one bedroom $1500 only affordable option now for a grown man with a job is roommates . Unless you owned the house prior to the "bubble" or have rent control. Which I had but too many law suits made it unafordable and had to move. So if they reallybwant you out of rent control you'll be out depending on the landlords legal team.

[SalParadise]

Originally Posted by thethinkman

Most of your answers cant make sense. Because if it were really a supply and demand issue. Why more rent signs I've ever seen ..obviously more supply then demand yet at triple the cost....?

You are not correct on this point thinkman. As of 4Q 2011, LA County's rental market was 4.9% vacant.

And other than places in the high desert like Palmdale I don't think there is much of a shadow inventory masking the official low rate.

LA has added relativley few housing units relative to its population growth over the past 15 to 20 years.

[Marce30]

Im fascinated with the show "House hunters" where they show people looking for houses to buy around the US.
In the Mid Wets you can afford a 150.000 dollars house with 4 bedrooms, 3 bathrooms, HUGE backyard in a nice area. In LA 150.000 wont get you not even a room to rent

[1200RT]

Originally Posted by Marce30

Im fascinated with the show "House hunters" where they show people looking for houses to buy around the US.
In the Mid Wets you can afford a 150.000 dollars house with 4 bedrooms, 3 bathrooms, HUGE backyard in a nice area. In LA 150.000 wont get you not even a room to rent

Yup. Very enlightening.

[marilyn220]

Originally Posted by thethinkman

Seems cost of living is so high now but income is so low. What makes the rent / real estate price quadruple but income lowers? Usually the theory of supply and demand would say people make less money so less rent. I would think maybe there is a high demand but seeing so many for rent signs up makes me thinks different. An apartment I woulebhave rented for $500 15 years ago now cost $1500.
What's making the cost of housing so high?

Delusion maybe?

I can't tell you. Almost everyone that lives here has a roommate (or several) or significant other living with them. I'm one of the few people that I know of that has my own place.

I'm too old to do roommates and need my space.

Oh yeah, there will always be someone trying to move in with you if they see you have too much space to yourself. LOL! Seriously. It's true.