Researchers Cast Keen Eyes on Angelenos’ Economic Recovery
Even though the Los Angeles County economy has strengthened since the recession, the region’s population is an increasingly multicultural mix of people who earn less, pay higher rents and live in more overcrowded conditions than they did a decade earlier, according to a USC analysis of data from the American Housing Survey of 1995.
The survey data paint a vivid picture of the boom and bust cycle the county experienced in the 1985-1995 decade, according to School of Urban Planning and Development researchers William C. Baer, Mark Hoffman and Dowell Myers.
“Los Angeles is only now recovering from a roller-coaster ride that began around 1985, rose to extreme heights by 1989, and then crashed between 1991 and 1995 as part of a long-term recession,” Baer, Hoffman and Myers write in their study, “Social Well-Being in Los Angeles After an Economic Roller-Coaster Ride,” based on their analysis of the survey results.
AN EXCERPT FROM the study is part of the Atlas of Southern California, Vol. 2, which was released Tuesday, Feb. 10, by USC’s Southern California Studies Center.
On top of being buffeted by recession, Los Angeles residents endured riots, fires, earthquakes and defense industry layoffs – all of which contributed to the county’s downward economic spiral. But other than a few sketchy indicators of employment and housing sales, data showing how the economic spiral affected county residents have not been available since the 1990 Census.
“The American Housing Survey allows us for the first time since 1990 to measure changes in Los Angeles households and housing units,” said Baer, a professor of urban planning and development.
The American Housing Survey is conducted every four years by the U.S. Census Bureau on behalf of the U.S. Department of Housing and Urban Development. The latest survey data, released in fall 1997, are derived from three samples, taken in 1985, 1989 and 1995, of at least 2,800 people in Los Angeles County.
IN ANALYZING THE survey data, the scholars investigated how different racial and ethnic groups were affected by the economic rise and fall, looking at such indicators of economic well-being as home ownership vs. renting, household income, home values, housing affordability and overcrowding.
“We’ve put some precise numbers on how much income levels, housing affordability and other economic indicators went up and came down, particularly for the poor and for renters,” said Baer.
All of the county’s racial and ethnic groups except blacks, who showed little change during the period, were worse off as a result of the recession.
“The economic trends experienced by all racial and ethnic groups except blacks were pretty much parallel,” said Myers, an associate professor of urban planning and development. “They all went up with the boom and went down with the bust.”
SOME DETAILS of the findings:
* After rising markedly, median household income crashed to a point lower than it had begun. During the boom, the median income of all Los Angeles County householders climbed from $35,700 in 1985 to $36,600 in 1989, then plummeted to $29,000 by 1995 – 19 percent lower than at the start of the period.
* The recession barely changed the median income of African American householders, although their median income was lower than most groups’, both at the beginning and at the end of the decade.
* Asian-American median income fell the most (21 percent) among the county’s racial and ethnic groups, although Asian householders remained relatively well- off compared with other groups.
* Latino median income fell 16 percent, while white median income fell 11 percent.
* Very low-income households (those with incomes of 50 percent or less of the county’s median income) increased from 24 percent to 32 percent of all households. Meanwhile, higher income households (those with double the median income) declined from 18 percent to 13 percent of all households.
HOUSING AFFORDABILITY AND OVERCROWDING
* Housing affordability worsened sharply among renters while declining only slightly among homeowners. Only 32 percent of all homeowners paid too much (more than 30 percent of their income for housing) in 1985, with the percentage up slightly by 1995. Renters who overpaid increased from 45 percent of all renters in 1985 to 49 percent in 1995.
* Large households (five occupants or more) increased from 13 percent to 17 percent of all households, due primarily to a rising proportion of rental households. The trend was especially pronounced among large Latino rental households, which increased from 26 percent to 34 percent of total Latino rental households. In contrast, both renter- and owner-occupied households declined among large black households.
* While at least 12 percent of rental households were overcrowded (with more than one person per room) in 1985, the percentage had risen to 17 percent in 1995. In comparison, the percentage increase in overcrowded owner-occupied households was only half as severe over the period.
* Despite considerable out-migration during the recession, Los Angeles County grew by more than 100,000 households between 1985 and 1995.
* Whites no longer constitute a majority in Los Angeles County – primarily because of the number of white households moving out (about 313,000) and the number of Latino households moving in (about 324,000) during the survey period. The number of white householders fell to 46 percent of all county householders, while Latino householders rose to 32 percent.
* Home ownership declined. The number of owner-occupied households fell by nearly 32,000, while renter households increased by almost 140,000. In other words, the ownership rate declined from 48 percent to 45 percent of households in the county.