The affordability factor. (Long Beach, Compton, Belmont: sales, apartments, house)

[US-Traveller]

Many people who make that amount either have lived in a nice area for a very longtime or live in a less desirable inner-city or suburban area. You cannot live comfortably in any of the big three cities with a 50k income, especially with kids.

[SandyCo]

Some people also make it because they live in rent-controlled apartments. The longer you live in a place like that, the better off you are financially because the rent increases are capped each year. Those are hard to find in L.A., though, because only multi-family dwellings built before October 1978 qualify, and many of them are owned by cheap slumlords.

I'm moving from a building built in 1960 into a building built in 1979. Bye bye, rent control! However, I think the benefits far outweigh the drawbacks, at least in my situation. I'll be living on spam and ramen, but at least I'll be able to enjoy where I live. My rent is increasing from $1,036 to $1,395, a difference of $364! Maybe that will give people an idea of how bad it has been here for the past few years.

[blueleo65]

Ok, so the benchmark is own your home in a prime area (??), otherwise this city is not affordable. That's also true in Des Moines. My argument is not that Los Angeles is a cheap place to live, far from it. I think instead of saying it's not affordable, the emphasis should be placed on expectations and priorities. Let's say you make $ 4000.00 a month. Forget about owning, in Los Angeles it's a luxury if you are a new buyer. But if you rent for about 1700 a month, you still have 2300 to live on and I would say most people would be able to live on that income. it might be a Toyota instead of a Lexus, and it might be Denney's instead of Morton's and Old navy instead of Bloomingdale's, but it is manageable. So at the end of the day, the affordability factor is relative, and instead of saying forget it, you won't make it, the emphasis should be on how you can make it on the income you are proposing.

Before I left Los Angeles in 2007, I was making $38,000 a year and I lived in a 1 bedroom apartment in Marina Del Rey. My rent was almost 65 percent of my take home income. I still had around 1100 a month to live on, and done wisely, as a single person, I was comfortable and living in a heck of a nice place. So, it's all about expectations and one's priorities.

[EscapeCalifornia]

Originally Posted by blueleo65

Ok, so the benchmark is own your home in a prime area (??), otherwise this city is not affordable. That's also true in Des Moines.

I'm sorry but you can't really compare those two cities. A quick realtor.com search for 3+ bedroom, 1.5+ bathroom single family homes in West Des Moines pulls up 126 properties for sale under $250k. The problem in LA isn't people trying to live in Brentwood or Malibu for bottom dollar, it's trying to find a safe place with good schools that's not $500k+ or 90 minutes from work.

[Ghostgecko]

I was shocked to discover online that you can find apartments cheaper in the Westside, Santa Monica and Hollywood areas than Hawaii, Key West, Miami, Denver...makes me want to move out there. I miss the WARM sun. Sure we get 350 sun days a year, but when the temperature is 30 degrees, really, who gives a ....

[blueleo65]

Escape, I wasn't really trying to compare the two. It was meant as a joke. Yes Des Moines is worlds apart in the prices of homes. But life isn't all about home ownership.

Can you believe that my commute from the NW suburbs of Chicago to downtown is longer then my commute was in Los Angeles? So, Los Angeles isn't so unique in it's problems and issues.

[ndfmnlf]

If you buy your house in cash (eliminating the need for a mortgage), Los Angeles becomes more affordable.

[uptown_urbanist]

I agree wth JohnG72 on at least some of his points - it's not usually the amount itself, but the fact that the budget is accompanied by wishes that don't fit with the budget. Many posters from elsewhere want to buy a house. It's far easier to live a good life on a middle-class salary if you're renting, not buying.

That said, some of the assumptions here can be off-base, but that's why posters should be as detailed as possible as to what they want and what they find acceptable.

[CaliDude1]

This discussion brings up some really good points. I have always thought living in Los Angeles was easier than commonly believed if people simply stopped trying to act lke they are actors and athletes. One silver lining of our current economic situation is people are being forced to be sensible again with their finances.

I just don't believe the old paradigm of home ownership applies in places like Los Angeles anymore. If the average middle income earner wants a mortgage that won't strangle them to financial death he or she needs to put down more than 20%. That is, if you want one of the "better" neighborhoods. Even with a six figure salary I have never understood people paying 4k+ a month for a mortgage. It just baffles my mind. It is not an issue of affordability. It is the willingness to be on the hook for that much money every month. I guess my frugality is starting to show.

Another question that came to mind is what exactly defines a ghetto or bad neighborhood in LA? Sure we can agree that if you are on Wilmington and Imperial you are in the 'hood. But that is an extreme example. The reason I ask is I gather from reading a lot of LA threads that many people think if you are not in a place like Brentwood or Manhattan Beach then you MUST be in the ghetto. That kind of thinking plays into the whole expectation/perception thing that needs to be adjusted. It feeds the unrealistic assessments people make regarding the income needed to live a comfortable life in Los Angeles.

[John23]

Originally Posted by blueleo65

I have read and re-read several threads on this board about Los Angeles's affordability. It almost seems like any reasonable income figure tossed in (i.e. 50,000, 80,000, 150,000), the answer is almost always that one will barely be able to survive on such income in Los Angeles.

So, what is the secret? There are millions of people living here. (The second largest metro area in the US) Do the majority of people have incomes in the millions? How do all the teachers, service workers, bus drivers, waiters, custodians, secretaries, hair dressers, grocers, etc. make it? There must be a secret. I am pretty sure, there are many not even making 50,000 a year. So where is the discrepancy? What are the criteria the board members are using to set the affordability benchmark?

I think the truth is, there's probably a million different answers. Internet answers are too simplified When you consider the number of transplants, the housing/rent swings in the past 10-20 years, the variability of incomes (some dirt poor, some with more money than they know what to do with).

-On top of a large number of immigrants (many entrepreneurial). Many very savvy financially. I think people underestimate that.

-Combined with spending habits. I've known people that have worked at Radio Shack that had $800 purses. Yet there are probably millionaires that drive toyota camrys with 200,000 miles on them. You can really go both ends of the spectrum here.

-A bunch of other income factors....making money from the dot com/stock bubble of the late 90's, or real estate investing before it crashed.

-Some live with friends/family.

-Online shopping Do people factor this in?

More variables than the average Des Moine resident IMO.

I think spending here is more marketing driven, and Entertainment Tonight driven. More prone to believe in new age/alternative philosophies. I think that definitely played a role in the real estate bust, an oprah/secret mentality. Just believe they arent making more real estate. I think it leads some to find fulfillment/purpose, and some to go broke. Even people making $80 or $100 k here can go broke. If you believe the wrong thing.

Very different mentality than the midwest or texas or other places I've been.

You have to know your spending habits, current LA is too expensive to find out.