Los Angeles spends a lot of taxpayer money on affordable housing, $399,228,000 in state funding and $1,919,897,000 in federal money for the 2024-25 fiscal year. Given all that spending, how does Los Angeles rank nationwide in housing affordability? Dead last.
Des Moines, Iowa, ranked first and Los Angeles ranked last in Realtor.com’s inaugural report grading the 100 largest U.S. metros on housing affordability and homebuilding activity.
The results highlighted how local zoning and permitting can affect housing affordability in different areas.
The real estate platform’s first Metro Affordability and Homebuilding Report Card, released on Sept. 16, showed that Des Moines received an “A+” grade with a score of 83.4, the highest among the 100 metros analyzed, reflecting its strong residential construction activity and affordability.
The city has a median listing price of $349,903, with the monthly mortgage payment requiring 27.5 percent of a median-income household’s income, below the commonly cited threshold of 30 percent.
The calculation assumed a 10 percent down payment and a 30-year fixed-rate mortgage with a 6.5 percent interest rate.
At the other end of the list, Los Angeles received an “F” grade with a score of 12, leaving it at the bottom of the 100-metro ranking.
The median listing price in the city stands at $1.129 million, requiring a household earning the median income to spend 84.4 percent of its income on the monthly mortgage payment on a typical home, according to the report.
Meanwhile, the report said that local housing policies can help explain the gap between the highest- and lowest-performing metro areas in new home construction and affordability.
“Beyond land availability, the biggest difference between the ‘A’ metros and the ‘F’ metros is local housing policy, especially related to zoning and permitting,” Realtor.com senior economist Joel Berner said in the report.
“The ‘A’s share regulatory flexibility and streamlined approval processes, while the ‘F’s are locked in restrictive land-use frameworks.”
The report noted that Des Moines had a permit-to-population ratio of 1.85, meaning the city was issuing permits for new homes at a rate 85 percent higher than the national average relative to its population.
By contrast, Los Angeles’ ratio of 0.47 meant that the city was permitting less than half the national average relative to its population.
“The combination of extreme affordability pressure and limited new supply placed it at the bottom of the class,” the report noted.
Along with Los Angeles, New York City, Providence, Rhode Island, Honolulu, and Boston also had failing grades.
For example, Berner said, Boston has four times as many pages of zoning law as Austin, Texas, and 79 percent of its land is zoned, compared with just 15 percent in Austin.
Minimum parking mandates apply to 88 percent of land in Boston, while in Austin, the requirement is 37 percent.
Boston also has less land that allows unrestricted accessory dwelling units, limiting the supply of smaller, more affordable homes.
Thanks to gobs of government spending, armies of regulators, and the tireless efforts of Karen Bass and Gavin Newsom, Los Angeles has managed to make itself the least affordable city in America! A fine demonstration of what the Democrat Party can do to a city if they just run it long enough.
But don’t worry! That same tax and regulatory climate is driving major movie studios out of Los Angeles, taking all those high-paying movie industry jobs with them to states like Texas and Tennessee. After that happens, expect lots of houses to hit the market right as LA’s economy starts contracting in earnest…
Tags: Austin, Boston, California, Clownfish TV, Democrats, Des Moines, Gavin Newsom, Hollywood, housing, Karen Bass, Los Angeles, Regulation, Texas, Welfare State, Zero Hedge