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Housing Crisis: A Mismatch Between Housing Costs and Incomes
Low-income households are not the only in Southern California feeling the ruthless pinch of rising housing costs. In fact, USC’s 2018 Casden Real Estate Economics Forecast points out there’s little doubt that the affordable housing crisis is cutting across a wide swath of the population.
The startling results reveal a household income at the 25th percentile would spend 58% of its income to live in its counterpart on the rental side. Likewise, the incomes at the median and 75th percentile cannot afford rents at the same percentile. The study finds, even under this best case standard, few units in SoCal are affordable.
USC Lusk Center’s Richard Green, who co-authored the study, says, “There is a poor match between people’s housing cost and incomes right now, and no amount of sorting will, by itself, fix this issue. One of the striking results we found is that where vacancy has increased slightly, there is a relief in rental increases. The way to raise vacancy rates is to build more.”
The forecast, which is produced annually by the USC Lusk Center for Real Estate in partnership with Beacon Economics, finds that by 2020, average monthly rents are expected to increase over their 2018 levels by $91 in Los Angeles County, $52 in Orange County, $209 in San Diego County, $107 in Ventura County and $78 in the Inland Empire.
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