Are high property values contributing to homelessness?
By Sam Catanzaro
It is no secret that real estate in Venice is pricey and according to a recent survey Venice’s 90291 zip code is one of the most expensive place to buy a home in the United States.
On Monday, November 18 PropertyShark released a survey of the 100 priciest zip codes in the United States. Los Angeles County contained 21 zip codes to make the top-100. According to the list, Venice’s 90291 zip code has a median home sale price of $1.851 million, right behind Silicon Valley’s Sunnyvale, CA ($1.873) and right ahead of Larkspur, Marin ($4.3 million).
Neighboring Santa Monica was ranked the third most expensive place to buy a house in the country, with a median home sale price of $4.154 million within the city’s 90402 zip code, which includes the affluent North of Montana neighborhood.
Also adjacent Culver City is included in the top-100 as well, with a median home sale price of $1.475 million making it the 89th most expensive place to rent in the country.
To determine which were the most expensive ZIP codes in the country, PropertyShark looked at all residential transactions closed between January 1, 2019 and November 5, 2019 taking into account condo, co-ops, single- and two-family homes. All package deals were excluded. To read the full survey, visit https://www.propertyshark.com/Real-Estate-Reports/most-expensive-zip-codes-in-the-us.
The high price of property in Venice may also be contributing to the homelessness crisis the area and region is amid. A recent study supported by Zillow and carried out by researchers at the University of New Hampshire, Boston University and the University of Pennsylvania found that the expected homeless rate in a community increases sharply once median rental costs exceed 32 percent of median income. According to the Zillow Rent Index (ZRI) — the metric the researchers used — the average annual cost for a rental in Venice’s 90291 is $64,740, 73 percent of Venice’s median average income ($88,078) as calculated by U.S. Census data.
…the expected homeless rate in a community increases sharply once median rental costs exceed 32 percent of median income. According to the Zillow Rent Index (ZRI) — the metric the researchers used — the average annual cost for a rental in Venice’s 90291 is $64,740, 73 percent of Venice’s median average income ($88,078) as calculated by U.S. Census data.
“A main finding of the analysis is that the expected homeless rate in a community sharply increases once ZRI exceeds 32 percent of the median income – a finding that closely matches the federal definition of affordable housing,” reads the study.
The federal definition of a housing cost burden is 30 percent of income.
In addition, the study found that nationwide there has been a steady decline in homelessness since the 2008 recession but a relatively small number of cities with large populations, including Los Angeles, Seattle and New York, are experiencing surges in homelessness related to very high housing costs and extreme poverty.