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Affordable Housing a Luxury for Some

For Families Living on Minimum Wage in State, Rents Too High, Study Shows


Fast-rising rents and stagnant minimum wages are undermining otherwise robust national and regional economies and forcing more low-income wage earners into substandard housing, a new study shows.

The rental-housing crisis is worst in California, where the gap between wages and housing costs is greatest, according to a report released Wednesday by the Low Income Housing Coalition, a Washington-based advocacy group for low-income people.

In Southern California, about 750,000 workers earn the state's minimum wage of $5.75 an hour full time, about $12,000 a year, according to the state Department of Finance.

Because the minimum wage has not kept pace with rising rents, many minimum-wage workers are being forced to live in slum housing or in small, overcrowded units, the report said.

The study warns that high rents are leaving households with less disposable cash, which should put a crimp first on neighborhood businesses and gradually on the local and regional economy.

"The statistics were astonishing before, and they're only getting worse," said Los Angeles City Councilman Michael Feuer, who launched a task force last year that recently produced a report on the city's housing crisis. "This is an outrageous situation. The entire region needs to be shaken by the lapels, and realize that business cannot thrive if people cannot afford to live here."

The rental-housing crisis has hit Orange County the hardest, where a couple holding down two minimum-wage jobs would each have to work more than nine hours a day, seven days a week to afford the average $1,004-a-month rent for a low-end two-bedroom apartment and still pay their other monthly expenses, according to RealFacts, a Novato-based firm that calculates rents in cities throughout the state.

In Los Angeles County, that couple would have to work eight hours a day, seven days a week to afford the $899 average rent for a low-cost two-bedroom apartment.

"The affordable-housing crisis is as bad as I've seen it, and that dates back to 1983," said Steve Renahan, director of Section 8 for the Los Angeles Housing Authority. Section 8 is a federal program that helps low-income families find affordable housing. "I've seen three refrigerators jammed into the living room of apartments where three families share two bedrooms."

And the problem seems to be getting worse. Los Angeles County grew by 169,000 people last year, but only 6,525 new multifamily units were built. The average construction cost of such a unit is $90,000, excluding land and other costs, and are therefore aimed at middle- to upper-income households, according to Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.

Isaias and Rosa Rivera, of Los Angeles, don't need statistics to know how tough it is to make ends meet. Until recently, the couple and five of their six children paid $400 a month rent for a one-bedroom apartment, on a combined income of about $900 a month.

Rosa Rivera, 40, who works at a clothing factory for $6 an hour, said she used to go to a local church and downtown's Grand Central Market every evening for free food to feed her children. The couple now rent a two-bedroom home for $200 a month, excluding utilities. But the hours Isaias works selling gold at a downtown jewelry mart have been severely slashed, and the family is now living primarily on Rosa's wages.

"I have problems paying for everything every month," Rosa Rivera said. "My husband tries to help, but it's nearly impossible. Our lives are very, very hard."

The lack of affordable housing affects not only the pocketbooks of the working poor but their overall quality of life, as they are forced to commute long distances by bus from outlying areas.

In Ventura County, where average low rents are $1,000--6.5% higher than last year--minimum-wage earners face a gap of 334% between what they earn and what they need to earn to pay that rent. In San Bernardino and Riverside counties, the gaps are 242% and 232%, respectively.

As workers pay a larger percentage of their income on rent, they have less money to spend on food, clothing and other consumer products that keep the economy stimulated. Also, high rents force businesses to pay higher wages to recruit employees. That raises the cost of their products in a competitive global marketplace. Those forces contributed to the recession of the early 1990s.

"We have study after study coming out, and the problem is not going away. People are suffering and trying to make ends meet," said Larry Gross, who heads the Coalition for Economic Survival, a Los Angeles tenants' rights group.



The median price of the state's single-family homes may rise 8.5% in 2001. C2


Out of Reach

Higher rents are pushing more low-income workers into substandard housing conditions.

Average low-end monthly rent for a two-bedroom:

(by county)


Orange $1,004 Ventura 1,000 L.A. 899 San Bernardino 725 Riverside 693


Weekly work hours needed to make rent, based on minimum wage:


Orange 134 Ventura 134 L.A. 120 San Bernardino 97 Riverside 93


Source: Southern California Assn. of Non-Profit Housing

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