Many of us have, at some point in our lives, probably dreamed of moving to Los Angeles and starting a new life (if we don’t live there already). The remarkable climate, iconic landmarks, and massive opportunity, there’s a lot to draw people to the City of Angels.
But some dreams are easier to achieve than others, and moving to Los Angeles might be a financially daunting proposition. Los Angeles ranks as the 6th most expensive city in the US to live in (behind places like San Francisco and Manhattan). The median listing price for property in LA is $860,000, or about $550 per square foot. There’s a significant lack of affordable housing in Los Angeles, making for a significant homeless problem. Monthly rent can cost anywhere from $2,300 for a 1-bedroom to $6,500 for a 3-bedroom. In short, Los Angeles is the second most expensive housing market in the country.
One of the reasons for the state of the housing markets is the passing of Proposition 13, which froze property taxes. This made homeowners reluctant to move, and limited available housing even as the population continued to grow. At the same time, rent went up by 25% while wages went down by 9%, putting a further stranglehold on the housing market.
And it isn’t just housing that will cost you more in Los Angeles — the cost of living in LA is a full 48% higher than the national average. For example, a meal for two at a mid-level restaurant in LA will cost you about $80. Monthly private childcare will run you about $1,300. Even car insurance is going to cost you more — car insurance premiums in California are 20% higher than the national average, and LA’s infamous traffic (and the hazards that come with it) can drive those numbers even higher.
Transportation can be another significant cost in LA, for a number of reasons. For one, Los Angeles’ reputation as a driving city with terrible traffic is justified. Freeways in the city are often packed, and the “rush hour” is three hours long both in the morning and at night. Added to which, public transportation in LA is not as prevalent as it could be — it’s a driving city, and if you don’t have a car of your own, you’re likely to have a difficult time. Ride-sharing is always an option, but that won’t do much about the traffic issues. As far as walking or biking — LA doesn’t fare well in either of those regards.
In other words, LA is not the place to move if you have no money — it’s estimated that to be able to live comfortably in LA, you should have a median salary of $74,371. The median salary in LA, for comparison’s sake, is around $59,000.
The truth is, most people can’t. According to the math done by Renthop, a good rule of thumb is that your income should be 40x the monthly rent. The median rent for a 2-bedroom is about $2500 per month, which requires an income of $99,000 according to those guidelines.
There are a few ways to help alleviate this. One is to try to make sure your apartment offers as many amenities as possible: laundry, a fitness center, and so on. This will help save you money on things like gym fees and trips to the laundromat (with associated transportation costs). This might mean higher rent — and could be difficult to find — but it could save you money on the whole.
Of course, a common strategy for people trying to make it on their own in LA is to move in with a friend, romantic partner, or roommate. If you can, find a fully furnished apartment to save yourself from having to buy new furniture. There are plenty of apartments that come with amenities like dishwashers, stainless steel appliances, and fully equipped kitchens.
Another way you can make your LA dreams come true is to give up on the idea of living downtown and settle for one of the more affordable neighborhoods. For example, Lancaster is in the Antelope Valley not far from the city, and has plenty of attractions all its own: the Antelope Valley California Poppy Reserve.
You might also consider Palmdale, north of Los Angeles, which will afford you a view of the Mojave Desert, as well as the opportunity to ski at the nearby Mountain High resort.
You’ll also do well to avoid the least affordable neighborhoods in LA: Malibu, Santa Monica, Pacific Palisades, Bel-Air. Unless you have an income well north of $200,000 a year, they’re not going to be a viable option for you.
Living in Los Angeles isn’t for everyone — it can be challenging and costly to make it there. But for many, the rich opportunities and lifestyle it offers make it well worth it.