The median price for a home in Los Angeles, California’s largest city, will soon hit $1m, as soaring housing costs fuel a humanitarian crisis that has left at least 50,000 people living on the streets.
In the past five years, the median listed home price in the Los Angeles area has increased more than 30%, according to estimates from the real estate company Zillow. As of late July, the median price for homes in the Los Angeles metropolitan area was estimated at $992,300.
Other cities in California are even more expensive, with median listing prices in the northern California cities of San Francisco, San Jose, Santa Cruz and Napa already surpassing the million-dollar mark, according to Zillow data. Listed prices in San Diego, the second largest city in California, are also nearing $1m.
“Homeownership for many people is now out of reach,” said Michael Manville, a professor of urban planning for the University of California Los Angeles. “The typical person does not have a $400,000 down payment and the ability to make $4,000-a-month payments.”
For most California residents, Manville said, “the million-dollar home price is like the tip of a big iceberg”, pushing up the costs of renting homes and apartments, and fueling a homelessness epidemic that has left California with an estimated 30% of the nation’s unhoused people – and 50% of those nationally who are living in their vehicles or on the streets.
Soaring housing costs “squeeze the quality of life of even families who earn good money” and “profoundly threaten the housing stability” of lower-income families, said Jason Ward, an economist at the Rand Corporation who specialises in housing and homelessness.
“Housing is really the biggest expense in life. It determines what you have left over for everything else you do,” Ward said. “There are food banks, but there aren’t housing banks.”
When housing costs go up, families have to sacrifice elsewhere: buying less food or lower-quality food, cutting education costs, spending less on medicine.
“It trickles down to just virtually everything,” Ward said.
For the most vulnerable people, rising housing costs can result in losing shelter altogether. A major new study from the University of California San Francisco found that nine out of 10 unhoused people had previously lived in California – and three-quarters of them had once had housing in the same county where they currently resided.
As home prices have risen across the state, so have the incentives for landlords to push out lower-income tenants. General Dogon, an activist at the Los Angeles Community Action Network, says that has forced groups like his to fight to keep people housed and to pressure the city to make developers build more affordable housing.
“It’s been one fight after another,” Dogon said.
The continuing rise in Los Angeles rental costs and the poor quality of the apartments available, has made Dogon, who is currently unhoused, consider the benefits of buying a camper van.
“I work hard for my little money,” he said. “I can’t see myself giving a slum lord $1,500 to live in a shack.”
While housing prices are driving some residents out of California to cheaper states, wealthier people are more likely to be able to pay to move, and find a better cost of living elsewhere, Ward said. Constraints like the need to be close to family networks and the expense of moving “tend to implicitly trap lower-income people in high-cost places”, he said.
In 2020 and 2021, more college-educated, working-age people left Los Angeles, San Francisco and San Jose than those who moved in, a New York Times analysis found.
California’s housing crisis has been decades in the making, housing experts said, and is rooted in the political power of the state’s homeowners, who have fought for years to protect or increase the value of their own homes, which provide the major source of wealth for retirement, and can also help fund their children’s educations.
Through zoning regulations and their power in local political contests, homeowners have blocked development, particularly of affordable housing units, experts said, contributing to a lack of housing supply across California, even as the demand for housing continues to grow.
“Where the rubber meets the road for most voters is things that might affect their own home values,” Ward said. “That’s why it’s so hard to adopt policies that could actually significantly reduce the cost of buying a home, because that would implicitly reduce the value of everyone’s homes.”
And while there may be a limit to how much California home prices can continue to increase, experts said, there is little relief in sight for the overall problem.
“I think a big economic crash is probably the only thing that would significantly decrease home prices,” Ward said.
