Even though the cost of living in Los Angeles is high, LA is the second-most populated city in the United States behind New York. While four million residents call the city home, more people move there each year. The Los Angeles Times reported that city growth in 2020 was around two percent — down from 3.7 percent in 2018. People from all walks of life want to move to the city that is known for celebrities, perfect weather, and endless entertainment opportunities.
While Southern California is a popular travel destination, it presents a few challenges for visitors who want to move there permanently. Learn about the cost of living in Los Angeles and how you can live there affordably.
What is the cost of living in Los Angeles?
Los Angeles is considered an expensive place to live. The median sale price for a single-family home is $576,100 — a significant increase from the home costs in New York City, which have a median rate of $403,900. While Los Angeles is considered more affordable than San Francisco and San Diego, its housing costs are still one of the highest in California and the United States as a whole.
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Rental costs also fall higher than the rest of the country. The median monthly rent for a two-bedroom apartment is $1,752 per month. This is lower than other cities like San Diego and New York, but is still one of the highest rental rates in the country.
Los Angeles is unique in that more people rent instead of own in the city. Only 36 percent of LA residents are homeowners, the rest are renters. This trend is only prevalent in a few cities across the country.
Along with your rent or mortgage payment, your monthly costs will include expenses like food, gas, insurance, utilities, and entertainment. Each of these budgetary line items are considered pricier in LA than in other parts of the country, which drives up the overall cost of living in Los Angeles.
What salary do you need to live comfortably in Los Angeles?
Even though Los Angeles is considered an expensive city, it is possible to live comfortably in the area without becoming a famous movie star or musical entertainer.
The city of Los Angeles has a minimum wage of $14 per hour for employers with 26 or more employees and $13 per hour for small businesses with 25 or fewer employers. The state is working toward a $15 minimum wage across the board in order to give residents the chance to earn a livable salary.
This minimum wage is close to MIT’s calculations for what Los Angeles County residents would need to earn to have a living wage. According to their analysis, a single adult working full time would need to earn a minimum of $12.00 per hour to get by and $19.35 to have a living wage. Two adults (both working) with one child would each need to earn $22.79 to live comfortably in the area. The calculations take into consideration the costs of rent, transportation, groceries, and other items like childcare costs.
While your budget might be tight as a minimum-wage earner in Los Angeles, you should be able to get by with the right budget. For a frame of reference, a $15 per hour wage is a $31,000 annual salary.
What is the cheapest place to live in Los Angeles?
As you look at real estate in Los Angeles, keep in mind that a city this big is incredibly diverse. Some neighborhoods will have astronomical rental costs while others – just a few blocks away – will have affordable housing in a safe and fun area. Most LA residents have their one hidden gems where they are happy to live, work, and play. Here are a few affordable neighborhoods that are also safe and close to the action.
Encino
Encino has a median rent of $1,475 per month, below the city average. This neighborhood offers a suburban feel while still keeping you close to the city. Encino is north of Los Angeles and located at the highway 101 and I-405 interchange. It also backs up against Westridge-Canyonback Wilderness Park and other nature preserves. This is an optimal place if you want to stay close to nature but still have the opportunity to travel downtown.
Playa Vista
If you want easy access to the beach, check out Playa Vista, located just north of LAX and against the Pacific Ocean. Playa Vista has a low crime rate and is 62 percent safer than other California cities. The median monthly rent is $1,535, which is a reasonable price for an area so close to the water.
Porter Ranch
If you want a family-friendly place to live in LA, check our Porter Ranch. This neighborhood is close to Santa Clarita and Rocky Peak Park. It is known for its neighborhoods and safety – boasting a crime rate that is better than 81 percent of California cities. The median rent is higher in this area ($2,763) but that is because there are more single-family houses to accommodate multi-generation families.
While price is an important factor in your housing search, you also need to know what you want out of living in Los Angeles. Your lifestyle will determine whether you opt for a beachside apartment, bungalow in the mountains, or downtown condo.
Why is the cost of living in Los Angeles so high?
There are many factors that contribute to the high cost of living in Los Angeles. However, one of the main drivers of housing costs is supply and demand. Housing construction can’t keep up with the number of people who move to the area each year. Within the state of California, developers would need to build 180,000 new housing units each year to keep up with demand. In 2019, they built less than 90,000 homes.
The lack of housing supply has been an issue in California for several years. Between 2005-2014, developers in the state built only 300 new homes for every 1,000 new California residents. This lags behind other in-demand states like New York, Washington, and Texas.
As a buyer and new resident in the area, you need to be competitive to get what limited housing options are available. You can expect aggressive bids on high-quality homes and sellers who refuse to compromise. If you want to buy a home in LA, you need an experienced Realtor who can get your offers noticed in this competitive market.
Find a Realtor Who Can Secure Your LA Home
Don’t let the cost of living in Los Angeles deter you from moving there. You can find affordable neighborhoods that match your lifestyle and career goals. Before you start packing, secure a Los Angeles Realtor who can guide you through the moving process and help you make competitive bids. At UpNest, which is owned by parent companyRealtor.com, we sort through thousands of real estate professionals to find the best fit for your needs.
If you are looking for help on your real estate journey, UpNest is a no-cost service for home sellers and buyers to find the best real estate agents locally. The UpNest platform allows you to compare multiple agents in your area so you can compare reviews, commission rates, previous sales, and more.
Our network agents have been carefully vetted and often offer competitive, lower than average commission rates to UpNest customers. There is no obligation to sign up with one of our network Realtors, but when you can potentially save thousands on commission – why wouldn’t you? If you’re ready to get started, just enter your zipcode below!
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Is moving to LA a good idea?
Yes! Many peopleare considering a move to Los Angeles. The city is known for its welcoming climate, inclusive culture, and rich history. It’s no wonder that over 12 million people call the Greater Los Angeles area home
What salary do you need to live in Los Angeles?
According to one estimate by Gobankingrates.com, an annual income of$74,371was about right for the average person to live comfortably in Los Angeles. Of course, this varies depending on where you want to live in LA and how you want to live.
FAQs
The TRUE Cost of Living in Los Angeles? ›
Summary of cost of living in Los Angeles, CA, United States: A family of four estimated monthly costs are 4,738.1$ without rent. A single person estimated monthly costs are 1,308.0$ without rent. Los Angeles is 13.6% less expensive than New York (without rent).
What salary do you need to live comfortably in LA? ›According to the study, a Los Angeles resident without children would need to make $76,710 after taxes to live comfortably. The study is based on the MIT Living Wage Calculator, which uses the cost of housing, food, transportation, medical care and more.
How much does it cost monthly to live in LA? ›The average cost of living in Los Angeles ranges from $1,493 to $1,572, depending on your lifestyle and how you budget. The monthly cost of living in Los Angeles for international students can become very expensive. But, there are plenty of ways to make it affordable.
Does LA have a high cost of living? ›everything seems more expensive than where you're from. It's not your imagination: The cost of living in L.A. is 51% higher than the national average. Yikes! That said, L.A. living on a budget IS possible, if you're diligent and willing to take the time to learn how.
What salary do you need to live comfortably in California? ›The most expensive and least expensive states vary by more than $66,000. In Hawaii, you need to earn $112,411 to have what GoBankingRates considers a living wage. In Mississippi, you need $45,906. In California, you need to earn $80,013, the study states.
Can I live in LA making 70k a year? ›If you are a single person in Los Angeles making around $70,000 a year, you are still considered low-income, according to a new statewide study. The California Department of Housing and Community Development released the report in June and found that income limits have increased in most counties across California.
Can you live in LA on 100k a year? ›When analyzing LA, the study said that the annual take-home pay from $100,000 after taxes is $68,050, but the cost of living is 52.5% higher than the national average.
What is considered low income in Los Angeles? ›These income limits are also dependent on the number of people in each household. For example, while a single-person household in LA County is considered low-income at about $70,000 a year, a four-person household has a limit around $100,000.
Can you live in LA on 40000 a year? ›In fact, if you understand the power of budgeting, you can live in the Golden State for less than $40,000 every year.
Can you live in LA on $60000 a year? ›Yes, I think you can definitely live frugally on that amount in LA. You won't be in an upscale neighborhood, you won't be wearing designer clothes or driving a BMW but you can be comfortable. You can eat out sometimes, go to a movie, buy some new clothes and shoes as needed.
How much do you pay for rent in LA? ›
| Average Rent | Average Apartment Size |
|---|---|
| $2,742 | 788 sq. ft. |
The most stressed out US city is in fact Los Angeles, according to a poll of more than 3,000 residents from LA, New York, Dallas, Miami and Chicago, which found 76 per cent of those living in the City of Angels feel at least “somewhat stressed” every day.
Where do the wealthiest live in LA? ›- Beverly Crest. ...
- Windsor Square. ...
- Santa Monica. ...
- Westwood. Median Home Value: $3 million. ...
- Century City. Median Home Value: $2.9 million. ...
- San Marino. Median Home Value: $2.8 million. ...
- La Cañada Flintridge. Median Home Value: $2.7 million. ...
- Encino. Median Home Value: $2.6 million.
We've identified 10 cities where the typical salary for a 30$ An Hour job is above the average in California. Topping the list is San Francisco Bay Area, with Soda Bay and Berry Creek close behind in second and third.
Is $75,000 enough to live in California? ›We heard that, while $75,000 is a comfortable salary for a single person in San Francisco with four roommates and no loans, it is “not nearly enough” for a young family in Orange County, California, trying to save enough for homeownership and their child's college education.
Is 50K a year livable in California? ›The good news is that millions of people are living in California on around 50K a year. On a comfortable budget, 50K is a realistic income. On a shoestring budget, 30K is a reasonable income for living in California. You can make $24.96 an hour and live comfortably in California.
What is considered a good salary in Los Angeles? ›| Annual Salary | Monthly Pay | |
|---|---|---|
| Top Earners | $96,880 | $8,073 |
| 75th Percentile | $87,153 | $7,262 |
| Average | $67,842 | $5,653 |
| 25th Percentile | $48,532 | $4,044 |
As of 2021, the median household income in the city of Los Angeles was $69,778, per the Census Bureau. Those in the 95th percentile of household incomes in the city make nearly $243,000 and those in the 80th percentile make $115,000, according to Statistical Atlas.
Is $80000 a good salary in Los Angeles? ›It depends on your lifestyle and expenses. $80,000 is above the median income for individuals in Los Angeles, but the cost of living in the city can be high. If you are frugal with your expenses and live in a less expensive area, it could be a comfortable salary.