Homeownership in Los Angeles County is at a 53-year low, as only 45% of residents own the home in which they’re living, according to recent data released by USC’s Neighborhood Data for Social Change. This is lower than the state and the nation.

Both housing costs and supply are contributing to this trend. In 2023, the median home value in L.A. County became 10 times higher than the median household income compared to a ratio of 4-to-1 across the U.S.

While homeownership has declined across all income groups, Elly Schoen – associate director of USC NDSC – said households making between $50,000 and $150,000 experienced “the steepest decline.” Between 2010 and 2023, homeownership in this income group dropped by about 31%.

USC NDSC’s report, dubbed the State of Los Angeles County Housing and Neighborhoods, outlined the longstanding imbalance between population influx and new housing units dating back to the 1950s.

“In the 1980s and 1990s, we added between five to six new people for every one new housing unit, and we did that for years, for decades. That is just a really unsustainable pace of growth of people versus housing,” Schoen said, adding that “we dug ourselves a really big hole.”

Population growth took a turn in 2015. Since then, the county has lost 500,000 residents. This, however, has not mitigated the housing gap.

“Although population has declined, the number of households has grown by 5% so we’re actually not seeing any alleviation on housing demand just because we are losing population,” Schoen said.

There’s also not a lot of turnover for those who are homeowners. It seems Prop 13, which was first adopted in 1978 and locked homeowners’ property tax rates to the market value of the home at the time of sale, has worked in incentivizing people to stay in their homes. Nearly half of current homeowners have lived in their residence for over 20 years, the report found.

Neighborhoods in transition

While the pathway to homeownership is narrow, the report finds that certain pockets of the county have higher rates of renters transitioning to homeowners. 

Nearly 70% of neighborhoods in the San Gabriel Valley fall into this category – namely, near West Covina, San Gabriel and Monterey Park.

Additionally, Norwalk, Cerritos and Artesia in Southeast L.A. as well as Arleta, Granada Hills, Lake View Terrace, Pacoima, San Fernando, Shadow Hills, Sun Valley and Sylmar in the San Fernando Valley show high rates of renters becoming homeowners. 

“When considering neighborhood population size and density, Glendale, Long Beach, Koreatown and West Covina are expected to see the largest total number of renters making the transition to homeownership,” according to the report.

In analyzing what these areas which see higher transition to homeownership have in common, the report unveiled several neighborhood characteristics. These include existing homeownership prevalence, larger households, more Asian residents, fewer children, fewer residents between 45 and 54, and more college-educated residents.

Conversely, there are also areas where people are more likely to shift from homeownership to renting. These include about 68% of South L.A. neighborhoods and the east corridor of Southeast L.A. and the San Gabriel Valley from Montebello to Pomona. Lancaster, Palmdale and Northwest Palmdale in the Antelope Valley also fit into this category. 

Shared neighborhood factors among this group includes a larger proportion of U.S. born residents, greater shares of Black and Asian populations, more residents under 18, more residents between 25 and 44, and residents with a high school diploma or less.

Jorge De la Roca, director of research at USC Lusk Center for Real Estate, said it’s also important to look at which areas have high rates of both renters and homeowners changing their statuses, which he called “churning.” These include Harbor, Southeast L.A., the northern San Fernando Valley and the southeast San Gabriel Valley.

“In neighborhoods with a lot of churning, where there’s a lot of dynamics or volatility, we can imagine that this has rapidly (impacted) the financing of local schools, local businesses and the social fabric of communities,” De la Roca said.

Black homeownership

In line with findings that communities with a significant Black population are transitioning to renting, the report also found that homeownership among Black households has decreased more than any other racial group in L.A. County. This trend is not reflected at the state or national level but is specific to Los Angeles. 

The report attributes this in part to the aftermath of the housing bubble burst in 2007 and the subsequent Great Recession.

“Nationally, Black households faced significant economic losses during the Great Recession largely due to the unregulated sale of subprime loans, which disproportionately targeted Black and Hispanic/Latino neighborhoods,” the report stated.

Nevertheless, by 2016, the homeownership impacts of this began to subside nationally while remaining steady in L.A. County since 2010. Lasting effects of historic redlining practices and exclusion from homeowner loans are also factors the report pointed to.

The data showed that in L.A.’s “redlined communities, just 30% of current-day
households are homeowners,” compared to 45% countywide.

To address this, Michael Lens, author of “Where the Hood At? Fifty Years of Change in Black Neighborhoods,” said Los Angeles should explore land trusts and community forms of ownership, noting that not only is Black homeownership declining in L.A. but so is the Black population as a whole.

“That’s a way to increase homeownership rates. It’s a way to increase the amount of value and wealth that is maintained in the community, and it’s a way to help not price out renters or give renters an option to stay as things are increasing,” Lens said.

Rental gaps

As homeownership has been falling, the need for rental options remains. Of the 152,000 housing units built to completion in the last seven years in the county, nearly 83% have been in the rental market.

But just like homeownership, the cost of renting is weighing on Angelenos, especially households earning under $50,000 annually which makes up the highest share of renters at 38%. Looking at the rental units that have been built recently, only 10% are affordable to low-income households.

With limited affordable options, 90% of households earning less than $50,000 are spending more than one-third of their income on rent and 70% are paying more than half.

“We’ve only built 12,000 affordable rental units in the last seven years, and there are somewhere between 500,000 and 600,000 renter families that are really struggling to afford rents just in this lower income group,” Schoen said. “These, in my opinion, are the two key data points about the affordability crisis for renters.”

Part of the difficulty in creating affordable housing is the time it can take when using government programs such as the low-income housing tax credit program which often comes with a complex financing process, high labor costs and other regulations.

Rayman Mathoda – chief executive of Anchor Loans, a real estate lender based in Thousand Oaks – sees private financing as a way to speed up housing creation.

“The truth is private capital is the innovative capital,” Mathoda said. “We can make a loan in five to 10 days, whereas a bank might take two or three months.” Additionally, she pointed to the flexible timelines private lenders can provide for loans as opposed to minimums put forth by banks.

Mathoda also argued that multifamily is not the only lens to explore affordable housing, suggesting options such as “high-density single-family housing” where developers can create “cottage clusters” of deed restricted apartments on single-family lots. For a 10,000 square-foot lot, Mathoda said this can mean up to 30 units at $250 to $500 per square foot including land costs.

Another option is renovating and expanding the footprints of existing, older single-family homes into co-living spaces through partnerships between landlords and investment firms. While for that, landlords must secure certain approvals as to not violate single family dwelling laws, it is possible, she said.

“Where this is allowed, it is actually creating housing for people at 50% AMI (area median income),” Mathoda said. “It’s the only place I see expansion of supply for people at 50% and 60% AMI without substantial government subsidy… We could add 5,000 to 20,000 units of that type of housing in L.A. County if we were to make that one of our strategies.”

Federal funding

Issues at the federal level are also creating construction hurdles, according to Tommy Newman, chief of staff for L.A. County Affordable Housing Solutions Agency. He called the uncertainty created by tariffs “debilitating” in getting projects off the ground to help L.A. move forward from its already existing housing crisis combined with the need to rebuild after the fires.

Lourdes Castro Ramirez, president and chief executive of the Housing Authority for the City of Los Angeles, added that “at scale, rental subsidy is needed from the federal government.”

To that end, the director of USC Lusk, Richard Green, compared our federal government’s role in supportive housing to other developed countries. 

In 2024, the global policy forum, Organisation for Economic Co-operation and Development, reported that the United Kingdom spent about 1.4% of its gross domestic product on supportive housing; Finland spent about 0.9%; and Denmark and France spent about 0.7%. The U.S. spent less than 0.2%. Zooming out from L.A., Green looked at the difference between what people were paying in rent relative to 30% of their income and calculated the sum for the whole country which came out to $207 billion.

Given 1% of our country’s GDP is $300 billion, Green asserted: “For less than 1% of our GDP, we could provide everybody (in the country) with a voucher that would reduce their rent to being 30% of their income. I call that the 1% solution.”