Once upon a time, the way things worked was, when you were first starting out your life in the big city, you rented an apartment for a while. But if you were lucky enough to hit it big and start pulling down a bigger salary, you might plan to buy a house of your own instead of continuing to rent. These days, at least in Los Angeles, that seems to be changing. More households with incomes greater than $150,000 per year are choosing to rent than ever before, according to research published by Rent Café.
Los Angeles ranks third in the country, just behind New York City and San Francisco, in number of high-earning households who are renting rather than buying their own homes. That could be a consequence of our region’s super high housing costs—$150,000 doesn’t go as far as it used to, unfortunately—or a preference for flexibility on the part of affluent professionals who don’t want to be tied down to a particular house or city.
This growth in upper-tier renters is part of why we’ve seen the explosion in ultra-luxury apartment offerings and developers eager to propose ever more, and more grandiose, projects. But that comes with a potential consequence. If there are more affluent renters able to pay more, then market forces kind of suggest that prices overall could keep going up. That would certainly be consistent with what L.A. has been seeing in recent years, as local rent costs continue their upward swing.
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