The Los Angeles Business Council says Los Angeles is being squeezed by an "unprecedented housing crisis" that is hurting the region's economy.
The council's "Workforce Housing Scorecard" contends that the gap between wages and housing prices in Southern California is the largest in the country and "has caused many middle-income workers to move farther away from job centers, enduring longer and more arduous commutes or forcing them to leave the region altogether."
More: "According to the Scorecard, nearly two decades of rising housing costs have squeezed low- and middle-income residents, causing many to sink an increasingly large share of their income into their place of residence. In 2007, a family earning the countywide median income of $53,000 per year spent more than 50% of their earnings to purchase a home in Los Angeles County -- far greater than the 30% recommended by experts."
Analysis/bloviation: The controversy, if there is one, in the report is that it blames the region's high housing costs not on the recent housing bubble but on a lack of new housing supply. New construction, the report asserts, has not kept pace with population growth and job creation in the region. The council: "For example, between 1990 and 2007, Los Angeles County reported a net gain of 1,433,531 new residents but added only 194,554 housing units -- a sevenfold differential."
The business council generally supports the development of more housing in Los Angeles, which is a tough sell right now, given the weakness of the housing market and in particular the market for newly built homes. It's hard to convince financial institutions that this is a good time to lend money to home builders.
-- Peter Viles