Stan Oklobdzija and his partner live in a one bedroom apartment in Little Tokyo in Los Angeles and he realizes he is lucky. “We’re at the top (percentage) of income, between what I earn and what she earns,” he said. Fortune, adding that their income is around $225,000 a year. But they rent and he doesn’t see that changing. “With housing costs being what they are, the very idea of us owning a house is absolutely, how funny. It’s like we might as well own a spaceship.
Each earns six-figure salaries, he says, with Oklobdzija, 40, a visiting assistant professor of public policy at UC Riverside and his partner, 35, working in the digital advertising industry. They pay $2,400 a month in rent and he tweeted late last month that “the idea that we could ever own a house here is hilarious.” If someone making six figures and together with their partner earning over $200,000 feels like they can’t afford a house in Los Angeles, how can we expect that affordable for anyone earning less than that?
Oklobdzija is right when he says he is in the top bracket of earners. In 2021, the median household income in the city of Los Angeles was $69,778, by the Census Bureau. Those in the 95th percentile of city household income earn nearly $243,000 and those in the 80th percentile earn $115,000, according Statistical Atlas. Meanwhile, the average home value in Los Angeles is $891,820, by Zillow, more than double the average home value in the United States.
The US Department of Housing and Urban Development defines affordable housing “as a dwelling on which the occupant pays no more than 30% of their gross income for housing costs, including utilities.” Oklobdzija and her partner aren’t the only high earners still renting instead of owning.
As a professor of public policy, Oklobdzija’s research tends to focus on housing policy, and prior to that role he was research director for California YIMBY (a development advocacy organization, ” yes in my garden”). who says it’s “Working to pass legislation to end California’s housing shortage by strengthening and growing the YIMBY movement.” Oklobdzija says that despite earning more and advancing in his career, he eventually realizes that he is not achieving the milestones that previous generations achieved, such as owning a house.
“The inability of millennials to enter the homeownership market in a way that previous generations have always been portrayed as a sort of inherited failure of young people…rather than looking at these insane structural barriers that are put in place,” says Oklobdzija. These barriers, he suggests, make incumbent landlords much richer while impoverishing an entire generation of people (his generation), as well as communities of color and low-income communities that have historically faced these same barriers. . Oklobdzija’s message for Gen Z? “Get ready,” he said, laughing.
There was a time when Los Angeles was building to meet new demand, with “just a glut of construction”, as Oklobdzija called it, adding that the same could be said for cities across the country. More than 40 million housing units were built in the United States in the 30-year period following the end of World War II, and in California alone about 6 million housing units were built during the same period, according an analysis of postwar housing by the California Department of Transportation. But that started to end in the 1970s and into the 1980s with measures like Proposition U, passed in 1986, which had a major impact by halving the floor area ratio, lot size of property and the amount of development permitted for most commercially zoned land.
“There was a massive downgrade from Los Angeles,” says Oklobdzija. “So it’s literally become illegal to build multi-family homes, it’s become illegal to build anything other than single-family homes on large lots.” This was a game-changer for higher density housing and triggered a shortage crisis that manifested itself in higher prices.
“We have a desire to own something, it doesn’t have to be a detached single-family home… But it’s just illegal in LA, and remains illegal in LA, most of the city, from build these guys,” Oklobdzija says. “I mean, if you look at the west side of LA, like nothing has changed there in 40 years.
He is neither the first nor the last to blame the country’s housing crisis, largely due to its housing shortage which drives up prices, to the inability to build. For example, economics writer Noah Smith recently wrote that “America’s inability to build things,” housing for one, is often stalled due to permitting and development rules (aggravated by NIMBYs). or “not in my backyard” anti-development residents), and paralyzes the country as a result.
Oklobdzija, going further, called this a “refusal to build”. Oklobdzija argues that housing policy is local policy because land use policy is usually set by local elected officials. “These local elected officials, they are not re-elected by doing the right thing”, but rather according to what will bring them votes. This often means meeting the needs of NIMBYs who generally argue that higher density and new developments will negatively affect their quality of life or the surrounding environment and reduce the value of their properties.
“NIMBY-ism is an extremely powerful force,” says Oklobdzija. “And unfortunately, American political institutions are set up in such a way that the best way for a local elected official to stay in office is to give in to the NIMBYs.” Oklobdzija says “we don’t need to have a housing crisis, we choose to have a housing crisis”.
According Los Angeles County, the region needs to add nearly 500,000 affordable housing units to meet current demand, just for low-income renter households. We have seen how this played out in the unhoused population. Since last year, 69,144 people were homeless in Los Angeles County. As California Governor Gavin Newsom attempts to address the housing shortage in a variety of ways, including announce a plan allocate $30 million to build tiny homes across the state and take legal action against Huntington Beach’s ADU ban, to name but a few, the crisis continues.
Oklobdzija knows he and his partner have options when it comes to owning a home. They may not be ideal options, but he realizes that they are in a better position than most, and that’s why he wonders what it is for those who have less means, financially. . Nevertheless, Oklobdzija says that even if he decided to buy that $600,000 a room with $1,000 HOA every month, in some sort of extreme hypothetical situation he gave Fortunethe down payment would still be an issue apart from the monthly costs.
“Where are we going to find this deposit?” Even with the money we earn, it’s impossible to reach 20%,” says Oklobdzija. “People don’t just have $100,000 in cash, they just kick it. »
Whenever he and his partner have opened up Zillow, or even looked at alerts, to see if they can access property, Oklobdzija says, it’s just not something that feels like a reality to them. He gave the analogy of a treadmill, saying he feels like he’s “sprinting just to stay in place.” Later that year, Oklobdzija moves to New Orleans for a teaching position at Tulane, a move he says the Los Angeles market partly prompted him to make.
