Southern Californians spend as much on rent as Arizona, Colorado and Oregon collect in taxes
Here’s why the rent control issue won’t go away in California any year soon.
We are talking real money. Southern Californians renters will pay landlords an estimated $47.8 billion in 2018 — up $2.6 billion in a year.
A new study by apartment tracker HotPads shows total rents paid in Los Angeles, Orange, Riverside and San Bernardino counties this year — up 5.8 percent in a year — are on par with total annual revenues of corporate titans such as Cisco computer networks or HCA healthcare or Caterpillar tractors and are in the ballpark of yearly tax collections by Arizona, Colorado and Oregon COMBINED!
Local landlords’ cash flow is growing at a faster pace here than the rest of the nation. U.S. tenants outside of Southern California should spend $456.6 billion on rent in 2018, up $10 billion in a year or just a 2.24 percent increase.
It’s not just locally rising rent boosting the landlord’s take: The number of renters is increasing in the region, too.
Southern California had 2.8 million renting households in 2018 — a flock on par with the number of all households in the state of Washington. And the number of local renting households grew by 120,000 in the past year, or 4.45 percent. Elsewhere in the U.S., 40.4 million households rent, but that’s off 220,000 (0.54 percent) in a year.
High rents paid by the region’s growing number of tenants explain how Southern California is a major rental market: The four-county region has 6.2 percent of all U.S. renters who pay 9.5 percent of total rents collected nationally.
Looking at the data with a little more geographic detail …
In Los Angeles and Orange counties, $40.4 billion was expected to be spent on rent in 2018, up $1.9 billion in a year — the No. 1 jump nationally — or 4.9 percent. L.A.-O.C. has 2.3 million renting households — the nation’s No. 2 rental market behind New York — and that’s up 100,000 in a year, or 4.55 percent.
In the Inland Empire, $7.4 billion in rents will be collected this year, up $700 million in a year — the No. 5 gain nationally– or 10.5 percent. There are 516,000 renters in Riverside and San Bernardino counties — the 16th largest market nationally — up 20,000 (4 percent) in a year.
Back in November, voters shot down a statewide initiative that could have expanded rental control. Proposition 10 lost, gaining just 40.6 percent of the vote and carrying only two counties — San Francisco and Alameda. But it took a great effort by landlords, who outspent Prop. 10’s supporters 3-to-1 on campaigning that helped kill the ballot measure.
Considering that 45 percent of California households are renters, and the vast sums spent on rent, it’s likely rent control efforts won’t end soon.