My View: $12K Per Month Rent Not Really As Absurd As It Sounds

Photo by Marco Raineri on Unsplash

By David M. Greenwald
Executive Editor

If you look at the trends in rental housing, a $12,000 per month apartment might not be nearly as absurd as it sounds.  That’s the premise of an op-ed this week in the Capitol Weekly by AIDS Healthcare Foundation President Michael Weinstein.

Weinstein, along with his organization, is of course pushing for rent control and a Justice for Renters ballot proposition.

But the math is a bit scary.

“It sounds crazy: The $12,000-a-month apartment. How can an average American afford to pay $12,000 per month for an apartment?” Weinstein begins.  “But it’s really not as far-fetched as you may think.”

The numbers themselves are a bit scary too.

For example, prices for housing now are 1000 percent higher than they were in the late 1960s.

“A one-bedroom apartment in Los Angeles in 1990 would cost you $615. Today, it costs nearly $3,000—a 442 percent increase. At this rate, that average apartment will cost you $12,000 in a matter of years,” he writes.

Is that realistic?  I’m sure if someone suggested in the 1960s that an apartment in Los Angeles or San Francisco would cost what it does today, our 1960s counterparts might be skeptical too.

He adds, “What kind of city will LA become if rents are allowed to continue to climb to such absurd heights? Will the 75,000 homeless people in Los Angeles County turn into a half a million? Or will more people flee the state to avoid this catastrophe?”

But basically, what has happened is rents have climbed at twice the rate of inflation over a long period of time.  If that continues, it doesn’t take a stretch to conclude that we will be “in a terrible fix.”

Weinstein and his organization are part of the Housing as a Human Right movement.

He argues, “People are desperate. They need immediate relief, and rent control is the only way to give it to them. If there is a better short-term solution, I would love to hear it, but the status quo is not the answer.”

In his view, “California is rapidly becoming a third-world state where income inequality dominates. A few very rich people live in the lap of luxury while the majority of Californians are just scraping by.”

Weinstein continues, “How does liberal California tolerate such injustice? Why are we unable to hold Big Real Estate and corporate landlords accountable for all the damage they have done to people in need? The answer is simple: They have effectively purchased our state government.”

He puts his eggs in the rent control basket, asking for people to pass a ballot proposition “that allows local communities to expand rent control. We can remove California’s statewide ban on rent control, giving renters much-needed relief by stopping predatory corporate landlords from charging unfair and unaffordable rents. We can side with our neighbors and act.”

As I have written elsewhere, I am not opposed to rent control.  The data shows it can help reduce the increase in cost of housing.

Personally, I don’t believe in one-size-fits-all solutions, however.

I would like to see rent control coupled with a more robust rental housing program by the state.  Of course my column from yesterday is skeptical we can get there any time soon.  In addition, we also need to increase housing supply on both the for sale and the rental housing.

With that said, those who will argue, well we won’t ever have a $12K rental housing, need to look at the growth in the cost of housing versus inflation, but also look probably more importantly at how the cost of housing has filled an ever-growing percentage of the average person’s monthly income.

Back in November, Judy Ennis, looking at data from 2019, found that a growing percentage of Davis residents are “rent overburdened,” basically spending more than one-third of their income on housing.

On Thursday, some of the speakers noted that some people were spending upwards of 50 to 70 percent of their income on housing.

While I am not a believer that we can solve these problems exclusively through rent control.  There is some data to suggest that rent control is a tool in the toolkit that can hold down costs long term, but again that needs to be accompanied by an increase in supply and affordable housing.  Not to mention programs that can help people buy into housing in order to increase their overall wealth.

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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