How do renters survive unaffordability? Household-level impacts of rent burden in Los Angeles

ABSTRACT

Prior research shows that households reduce consumption of basic necessities in response to an increasing rent burden. However, questions remain regarding the interrelated, cumulative tactics renters use to survive amidst declining affordability. We address these critical questions by leveraging data from a door to door household survey in South and Central Los Angeles. First, we find that rent-burdened households (those paying over 30% of their income on rent) were more likely to reduce consumption and that adjustments in many consumption categories had persisted for years. Second, rent-burdened households undertook impactful functional adjustments, including working more hours and altering their homes to accommodate more residents. Severely rent-burdened households were 10.4 percentage points more likely to accommodate additional residents than those paying between 30 and 50% of income toward rent. Finally, we find that many households made both functional adjustments and consumption cutbacks simultaneously, which demonstrates the cumulative hardships caused by housing unaffordability.

KEYWORDS:

• Rent burden
• housing affordability
• renters
• coping strategies

Acknowledgments

We would like to thank the John Randolph Haynes and Dora Haynes Foundation and the Lusk Center for Real Estate at USC for funding this research, as well as our community partners at SLATE-Z and LAPZ and colleagues at the Sol Price Center for Social Innovation for their support. We thank Dr. Katrin Anacker for her helpful guidance through the review process, and Dr. Deirdre Pfeiffer and our anonymous reviewers for their insight. We would also like to acknowledge our dedicated research assistants who helped us conduct this survey. Finally, thank you to the residents of Los Angeles who shared their time and experiences with us.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. For example, the U.S. Department of Housing and Urban Development (HUD) programs such as the Housing Choice Voucher program use rent burden (U.S. Department of Housing and Urban Development, n.d.) and the influential The State of the Nation’s Housing annual reports use cost burden to refer to the same concept (see for example, Joint Center for Housing Studies of Harvard University, 2022).

2. We randomly selected 20 Census Block Groups in each area, out of 183 in South Los Angeles and 178 in Central Los Angeles. Balance checks confirmed no statistically significant differences across selected and non-selected block groups on variables such as population with immigrant status and median household income. Results available upon request.

3. Eligible residents: (1) could complete the survey in English or Spanish and (2) had sufficient knowledge of household finances to answer survey questions.

4. Given the Promise Zone designations held by each of the study areas, the findings are likely an underestimate of the tactics that many urban renters must use to survive. If anything, the survival tactics observed by survey respondents should be partially mitigated by the civic infrastructure in the Central and South study areas, which those designations reflect and are intended to enhance. Other urban renters in high housing demand cities likely face even greater financial constraints and a heightened need for survival tactics as compared to those households in this study.

5. Have you made any of the following adjustments in the past 2 years to make life more affordable? [Check all that apply]: (1) Purchased or consumed less healthy or organic food; (2) Purchased or consumed less meat; (3) Reduced total food consumption; (4) Went without medicine or seeing a doctor; (5) Cut back on clothing; (6) Cut back on education expenses; (7) Cut back on transportation costs; (8) Cut back on utilities (electricity, water, garbage, etc.); (9) Delayed bill payments; (10) Took on more debt (credit cards, borrowing money, etc.); (11) Cut back on fun activities or entertainment; (12) Cut back on family activities; (13) Other, please specify; (14) None of the above.

6. To reduce your rent, have you done any of the following [at your current residence], mark all that apply: (1) Additional people moved in; (2) Rented out a room; (3) Created a new room for people to live in (if prompted, i.e.: built a wall in the house to make a new room, used a closet as a room); (4) None; (5) Other, specify.

7. Over the past two years, have you [or anyone in your household] taken on additional jobs, additional hours, or created additional ways to earn money?

8. To test the sensitivity of the regression models, we examined each outcome variable with both a more limited and wider set of controls. These alterations did not significantly improve the model fit nor alter the results. We also tested the sensitivity to various measures of affordability using the rent burden variable alone, severe rent burden alone, and a shelter poverty indicator alone with the full set of controls. These regression estimates did not yield significantly different results than those displayed. The dummy variable for shelter poverty was calculated using self-sufficiency standards from the University of Washington’s Center for Women’s Welfare for Los Angeles County. The rent burden and shelter poverty samples were similar with regard to both demographic and housing characteristics (we find no significant differences for all variables in Table 1 except household size). We find that shelter-poor households exhibited similar cutbacks and adjustments patterns as compared to rent-burdened households. Shelter-poor households used survival strategies at higher rates than households that were not, but the differences were not statistically significant in multivariate analyses for most outcome variables. Results are available upon request.

9. Results not displayed; detailed information available by request.

10. Results not displayed; detailed information available by request.

11. The survey included follow-up questions to understand how functional adjustments affected residents’ day-to-day lives. For respondents that took on additional labor hours, 25.6% had multiple jobs, 87.8% reported reduced time with family, and 62.4% decreased the amount of time they slept at night. Of those that added household members to their housing units, 57.8% lived in overcrowded conditions. Additional information is available upon request.

Additional information

Funding

This work was supported by the University of Southern California Lusk Center for Real Estate; and the John Randolph and Dora Haynes Foundation.

Notes on contributors

Sean Angst

Sean Angst is a postdoctoral scholar at the USC Equity Research Institute (ERI). He earned a PhD in Public Policy and Management from the University of Southern California. His research focuses on housing, community development, and health. This research investigates the causes and impacts of social inequities as well as evaluates innovative policy interventions to address those issues. His work has been published in the journals Housing Policy Debate and Journal of Cross-Cultural Gerontology, and funded by the Haynes Foundation and Lusk Center for Real Estate. Sean’s research has also been cited by the Los Angeles Times, New York Times, Urban Institute, and U.S. Department of Housing and Urban Development (HUD).

Jovanna Rosen

Jovanna Rosen is an assistant professor of public policy at Rutgers University-Camden. Her research contributes to contemporary urban planning and geographical debates at the intersection of urban growth, urban inequality, and community development. She has published in the Annals of the American Association of Geographers, Academy of Management Annals, the Journal of the American Planning Association, the Journal of Planning Education and Research, and Planning Theory. Her book, Community Benefits: Developers, Negotiations, and Accountability, recently published with the University of Pennsylvania Press, explores what community benefits deliver, for whom, and the factors that contribute to results for residents. She holds a PhD in Urban Planning and Development from the University of Southern California and a Master of City Planning from the University of California, Berkeley.

Soledad De Gregorio

Soledad De Gregorio is an associate researcher at Abt Associates, based in Los Angeles, California. She conducts public policy research with expertise in the fields of housing, homelessness, and education. Her work uses both quantitative and qualitative research methods. Soledad has examined homelessness within schools, social benefits, rental households in Los Angeles, and rental assistance programs, among other topics. Soledad’s work has been published in journals such as The ANNALS of the American Academy of Political and Social Science, and Educational Researcher. She holds a PhD in Public Policy from the University of Southern California and a master’s degree in Public Policy from UCLA.

Gary Painter

Gary Painter holds the BEARE Chair in Real Estate and serves as the academic director of the Center for Real Estate at the University of Cincinnati. He also serves as the director of the Homelessness Policy Research Institute. Professor Painter is a leading figure in the field of social innovation. He works extensively with a variety of social innovation organizations and collective impact networks to address some of the grand challenges that society faces. His current research focuses on how to activate the social innovation process. Professor Painter also has extensive expertise in housing, urban economics, and education policy, which shapes his research on how the social innovation process can identify new models of social change.