It Took Inheritance For My Family To 'Win' In LA's Housing Market
I spent much of my childhood bouncing around from rental home to rental home in Los Angeles and Ventura counties.
Money was tight. My parents were nursing an enormous medical debt that wasn’t covered, even though they had insurance (a story familiar to many Americans). For a young family with two children, a rental home in the ‘burbs was what they, like most of Southern California, could afford.
It wasn’t until I was in middle school that my parents had saved enough to convince a bank to sign them on to a 30-year mortgage for a Simi Valley three bedroom.
Maybe the bank didn’t need that much convincing. It was spring of 2007. The monthly payment, in retrospect, was criminally high. But the deed was theirs — no landlord to come around and say, “Sorry, but you’re going to have to move.”
My grandfather died less than two years later. He, too, was a homeowner. With his union wage and naturalized citizenship, he and my grandmother had purchased a three-bedroom house in North Hollywood for $16,500 in 1962. It was paid off on a 20-year mortgage. The monthly payment was $62.
What happened next wasn’t a hard choice for my family to make. They sold the Simi Valley house on a 43% loss and moved to North Hollywood. The commutes were shorter and, because it stayed in the family, the property tax assessed like it was 1978. Most importantly the home was owned outright.
In the warped economy of housing in sunny Southern California, it took an inheritance to make us “winners.”
OUT OF REACH
The opportunity my depression-hardened grandparents had in the early ’60s to purchase an affordable home does not exist today, nor did it then for black and brown residents. Adjusting for inflation alone, the $16,500 fee levied in 1962 would scale to about $139,000 today. Real estate websites ballpark the home’s value now somewhere around $600,000.
The reality is that unless you’re lucky enough to already own property you’re probably out of luck. The average home in L.A. County is affordable only for the region’s richest 16%.
That’s not likely to change any time soon.
You’ve probably heard by now that part of the problem is a literal housing shortage. Relative to the number of people who live in Southern California, there just aren’t enough homes.
But forces bigger than simple supply and demand are squeezing Southern California for all its worth. We live in a globalized world with a globalized financial market. The land under our feet is an internationally sought commodity, bought and sold on a market that few of us who actually live here could ever compete on. Few things trade better than “investment opportunities” in Southern California real estate.
These conditions, entangled with a moment of profound economic inequality, mean most of us are playing defense.
As gentrification remakes central neighborhoods, displacement forces those who can’t keep up inland or to the desert, and eventually out of state. Tens of thousands — largely families with young children — leave Southern California every year for cheaper cities across the southwest. Those who can’t afford to leave face a bleaker outcome.
WINNERS AND LOSERS
Our status-quo has winners and losers. While the winners refresh their most recent property value estimate at a stoplight, the losers dissolve in the sidewalk shantytown a few feet away.
The crisis of homelessness is the most horrifying result of the housing crisis. The sidewalk encampments you see represent the last stop in a long, painful downward cascade through increasingly precarious and unsafe housing in Southern California.
Though voters have approved billions of dollars to address the humanitarian disaster on our streets, the problem continues to get worse. At the core of it, we’re asking the same system that created the problem to solve it. Without addressing the larger systemic causes of depressed wages and skyrocketing housing costs, we can expect little change.
These fundamentally economic forces are changing the character of Southern California, and difficult questions to the surface. Who can afford to move here, who can afford to stay, and who can afford to keep a roof over their head?
These questions run over me as I report on housing and homelessness in this region. As a journalist, my job is to provide you with reliable information you can depend on in these topsy-turvy times.
It’s my job to ask the influential and powerful hard questions about why things are the way they are, and what they’re doing about it.
I am also listening to you. Each email, each comment, all help me understand precisely which questions I should ask, and what fact-checked information to supply with the answers.
So, if you’ve got a burning question, reach out. Your best bet is by email (firstname.lastname@example.org). Or you can use the form below.
Correction: The first version of this story said the average home was affordable for only for the richest 8% of L.A. County residents. Double-checking the census statistics, it’s the richest 16%. LAist regrets the error.