Economy & Jobs
High Cost Of Living in LA Forces Millennials to Stay Put
The bright lights of the big city can be alluring for young Millennials. The job prospects, the nightlife, and the fast-paced lifestyle not only attract, but keep Millennials firmly planted in a city throughout the infancy of their careers. In fact, a large number of Millennials have been staying put in cities like Los Angeles. This, however, is not always by choice. The cost of living in LA has made it hard for young adults to actually leave the city.
According to The Wall Street Journal, between 2004 and 2007, an average of 50,000 young adults (ages 24 to 34) left the Los Angeles area every year. Between 2010 and 2013 (post-recession), those numbers dropped radically to 12,000 Millennials departing annually. We know what brings a young person to the city, but what is keeping them there?
Average Rent and Income For Millennials
According to recent numbers from Rent Jungle, the average cost to rent a one-bedroom apartment in Los Angeles is $1,814 per month. And the U.S. Census Bureau says that from 2009 to 2013, the median income in LA for Millennial workers (ages 19 to 34) was $33,667.
If you break these numbers down, the average Millennial would spend more than half their income on housing to rent a one-bedroom apartment. Instead, many young adults opt for a two-bedroom apartment, which costs an average of $2,371 per month, and split the cost with a roommate. At less than $1,200 per month, this option makes rent high, but more affordable.
Given the high price of housing alone, however, Millennials have limited mobility because transportation costs can be an added burden on a tight budget. This makes city living more appealing because of access to affordable public transportation, and the ability to walk or ride a bike.
Average Home Prices in Los Angeles
To live the American dream in Los Angeles, one has to contend with an median home price of $545,000, according to Zillow. However, that’s lower than surrounding areas, such as Orange County, where the median home price is $577,950.
These high prices have Millennials handing over rent checks instead of mortgage payments. Given the high rent costs, as well as the high housing costs, Millennials are finding it hard to save the typical 20 percent down payment needed to afford a home in the suburbs. In short: The cost of living in LA is making it hard to save.
Living a Variation of the American Dream
Many Millennials want to live the American dream. They want sunshine coupled with exciting careers. They get both in Los Angeles. The main obstacle: the high cost of living. The only way to get around this problem is to live with roommates. Meanwhile, the Millennials who could afford to move out of LA on their own are usually DINK (Dual Income No Kids) families. These are young couples with two incomes, and can afford to spend a little more on housing.
But don’t let this hinder your decision to move to Los Angeles. The prices are high, but you get what you pay for: beautiful weather, a strong economy, and plenty of high-paying jobs in countless careers. You should, however, be well aware of the median housing costs and high income tax rates before you make a commitment and pack your bags.