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For tenants on the edge, paying the rent often takes more than half their income

Even before their latest rent increase, Barbie Thompson and her husband, Juan, could barely afford the Rancho Santa Margarita apartment where they raised two children.

The company that paid her around $13 an hour to distribute samples at Costco often kept her on a part-time schedule, Thompson said. Her husband earned even less as a busboy. So to make ends meet, at times the couple used a food pantry, let auto bills lapse and turned their $1,845 rent in late — a budgeting tool that cost $50 in late fees.

“Sometimes we were down to the last couple of dollars,” said Thompson, who estimated she and her husband spent at least 57% of their gross income on rent and utilities. “There was never enough.”

And that was before the landlord raised the rent on their two-bedroom unit to more than $1,930.

California’s high housing costs have pushed many tenants to the edge of affordability. Even if they have steady work, the cost of putting a roof over their heads demands a staggering share of income.

With more limited options today, many workers without a college degree have turned to minimum-wage restaurant work, contract jobs or employment in the so-called gig economy.

In theory, rent growth shouldn’t consistently soar past gains in income.

But Richard Green, director of the USC Lusk Center for Real Estate, said his research shows that while rising incomes push rents up, when incomes fall, rents don’t always fall as much because landlords don’t want to earn less money.

In economically vibrant places such as California, too little apartment construction has also put sharp upward pressure on rents. In the high-income job centers of San Francisco and San Jose, many residents have been able to absorb the rent hikes, while poorer renters are pushed to outlying areas.

The places with the highest burdens tend to be places such as Los Angeles, with both high housing costs and a large population of low-wage workers.

“To some extent, this is a function of what has happened in the economy in the last few decades — we have seen rising income inequality,” said Ingrid Gould Ellen, director of the NYU Furman Center for Real Estate and Urban Policy.

“People at the low end, their incomes haven’t changed, but they are in a housing market where housing is being bid up by those at the higher income end of the spectrum.”

The heaviest rent burdens are borne by low-income households and those with children.

To pay for the one-bedroom place he shares with his 5-year-old daughter in Long Beach’s affluent Belmont Heights, Cal State Long Beach adjunct professor Alfredo Carlos started teaching additional courses during summer and winter break several years ago, along with an extra online class at another college during the regular school year.

Even so, Carlos said 33% of his gross income goes to rent and utilities. He recently canceled his cable subscription and cut back his cell usage to save more.

Carlos wants his daughter to have a bigger place when she gets older, but worries he won’t be able to afford one in a safe neighborhood.

“It’s a nice community for my daughter to live,” he said of Belmont Heights. “At some point, I am going to have to make a decision.”

For seniors on fixed incomes, rising rents are an ever-tightening clamp.

Lois DeArmond, a retired costume illustrator, said she already spends about 70% of her fixed income on a $1,855-a-month, two-bedroom unit in the Arlington Heights area of L.A.

The 69-year-old said she’s somewhat lucky because she can sometimes take an odd job and her unit is under rent control, which limits annual increases for current tenants — usually to 3%. But she worries even those increases will eventually become too much to bear. Already there’s little left for emergency expenses, let alone luxuries.

“It’s hard,” DeArmond said on a recent afternoon, growing quiet as she sat in her living room. “I just try not to think about it.”


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