The Real Deal Los Angeles

Homelessness spikes in LA despite booming economy

A rise in housing costs is contributing to the problem
November 25, 2018 12:00PM

A row of tents in Downtown L.A. in August 2017 (Credit: iStock)

Homelessness is getting worse in Los Angeles despite economic indicators that say otherwise.

In Los Angeles County, officials released a statement in May announcing that the homeless population dropped for the first time in four years, but the number of people experiencing homelessness for the first time in L.A. actually spiked 16 percent from last year, to 9,322, Bloomberg reported. The increases comes in spite of a booming economy for the city, where unemployment is reaching record lows and millions of dollars of investment keep pouring in.

Some of the problem has to do with the rising costs of housing as well as slow wage growth.

A Zillow report from last year found that the number of people experiencing homeless in L.A. increases by 2,000 when rents jump up by 5 percent. In Seattle, a similar study from consulting firm McKinsey & Co. found that rises in housing costs are strongly correlated with homelessness.

Last year, the city also provided 5,000 fewer beds for the homeless than in 2011. About two-third of the state’s 134,000 homeless remained unsheltered in January 2017, reflecting the highest rate in the country.

Earlier this year, Mayor Eric Garcetti announced a plan to spend $20 million building emergency homeless shelters across the city. Two have already opened in Downtown L.A. and Hollywood. [Bloomberg] – Natalie Hoberman