NELA Real Estate: Rents in NELA Are Lower Than in Most of L.A. So Why Do I Feel Squeezed?

2018 August Editions Jeffery Marino News Real Estate

By all accounts, L.A. is one of the most expensive cities in America. With median home prices in Eagle Rock, Glassell Park and Mount Washington now approaching the million-dollar mark, NELA is officially among the priciest housing markets in L.A.

But not everyone on the Eastside is a homeowner. In fact, renters account for the majority of the population in Highland Park, Glassell Park, El Sereno and Cypress Park, according to the L.A. Times Mapping L.A. Project.

Renting is really no bargain anywhere in L.A., where rent is a very large part of many households’ incomes and many renters live in fear of increases they won’t be able to afford. And yet, rents in NELA are generally lower than in other parts of L.A.

The average monthly rent in the city of L.A. was $2,251 in June, according to RentCafe, a data site. To compare, averages for NELA ranged from a low of $1,400 in the zip code of 90065 (which includes Cypress Park, Glassell Park and Mount Washington) to roughly $1,600 to $1,800 in 90041 (Eagle Rock) and 90042 (Highland Park).

NELA rents are relatively low because the biggest rent increases in L.A. have occurred in the densely populated neighborhoods located near the burgeoning tech scene of “Silicon Beach,” around Venice and Santa Monica, and in neighborhoods nearer the 405 Freeway. 

Unfortunately, relatively low rents in NELA don’t mean that NELA is affordable for many of the people who live here. Whether an apartment is affordable depends on the household’s income and for a long time, rental and housing costs have outstripped increases in wages.

Policymakers and developers have responded to rising rents by pushing to build more units. From 2000 to 2016, Los Angeles was second only to New York City in multi-family construction spending, according to a recent report by Chris Salvati, an economist at Apartment List, a rental listing site. Multi-family housing is cheaper to build than single-family houses and more practical for housing people near and within urban areas.

In NELA, for example, a 59-unit apartment building, named “Perch,” is currently under construction on Eagle Rock Blvd. and a five-story, 100-unit Highland Park complex is in the works in Highland Park.   

But building more units is only half the battle. The share of the economic pie that goes to wages and salary, as opposed to rents and profits, also has to increase. Otherwise, even relatively reasonable rents will remain out of reach.

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