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La Opinión

Tuesday February 8, 2011

Historical Low Rental Housing
Percentage of Empty Houses is 9.7%; in California it Has Reached 7.9%

By Róger Lindo
 

Recent data from the Bureau of Census, states the proportion of vacant rental units in the United States reached the lowest point of the last seven years at the end of 2010.

According to the Survey of Housing and Home Economics, released last week, the rate reached 9.7% in the fourth quarter, the lowest since 2003. In the west, California included, the percentage of vacant homes fell even lower: 7.9%.

For Rent La Opinion
The housing for rent signs are everywhere in Los Angeles and go on for a long time. [Ciro Cesar / La Opinión]
But the truth is more alarming than the census data show, according to experts.

"The apartment vacancy rate reaches almost zero for affordable housing," said Larry Gross, executive director of the Coalition for Economic Survival (CES), a group defending the rights of tenants.

He said the numbers offered by the government don't reflect a volume of houses that have not been rented because their prices are beyond the affordability of the people, especially in the current economic situation.

"Many apartments that were converted into condominiums and were not sold and have been placed in the rental market, but rents they are asking for cannot be paid by low income tenants," he explains.

According to the latest update on rental housing undertaken by Economic Roundtable of Los Angeles, corresponding to August 2010, the rate of empty units in the city reached 5.2%.

However, the data extracted from a joint analysis of Census and the Department of Water and Power (DWP) does not specifically address the area of affordable housing.

Gross also said that the home foreclosure crisis that began three years ago launched a barrage of people, who previously owned the house, to now compete for low rent housing.

"This sudden extra demand has sliced more supply of such housing," he said.

"Many have been forced to share housing with other families, which has increased overcrowding, and this has an impact on the health of tenants, especially children."

In 2009, the report of the Economic Roundtable, 20% of rental housing in Los Angeles was overcrowded. Most alarming is that the severe overcrowding, five people living in a three-bedroom unit, has increasing rapidly since 2006, after declining at the start of the first decade of the century.

It is estimated that about 800,000 people rent in Los Angeles.

The spate of executions has created a black market for rental housing in substandard conditions in Los Angeles.

In an effort to increase revenues to meet their mortgage payments, and sometimes on the advice of the banks, an unknown number of owners sublet a room or garage of their homes to people who cannot afford current housing.

"Rents are rising, especially in the areas with rent control. The people are not able to afford a home and have to go live in a garage and share with another family," answered Juan Rodriguez, organizer of Inquilinos Unidos.

"Overcrowding is a reality that still is increasing. Obviously rents are no longer available."

It was not possible to talk with the director of the Apartment Association of Greater Los Angeles (AAGLA) because he was traveling.

But that organization has been working to loosen the limits set by the rent control ordinance, which sets a floor of 3% per year increase. The owners want to allow market dynamics to determine rent levels.

Some analysts believe that reducing the supply of rental housing in the country is able to trigger an inflationary spiral. The sharp decline in the percentage of empty houses, from 10.3% to 9.7% in the space of a quarter, according to information from the Census - led to a Deutsche Bank economist to telling the magazine Daily Finance that this danger exists.

However, according to the FED and the most recent economic predictions of The PNC Financial Services Groups, inflation, a measure that excludes products with greater instability such as energy and food, is going down.


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