A new report from the University of Southern California and the Los Angeles Business Council warns that the high cost of housing in Los Angeles is making it harder for employers there to attract and retain high performers. Business Insider outlines the report’s findings:
For the study — which was led by Raphael Bostic, a USC Price School of Public Policy Professor and the newly appointed head of the Atlanta Federal Reserve — USC surveyed 14 of Los Angeles’ largest employers, which account for nearly 200,000 jobs in the region. Nearly 60% of the employers say Los Angeles’ high cost of living impacts employee retention, with 75% naming housing costs as a specific concern, according to the survey results. Further, 10 employers (71%) view high housing costs as “a barrier” to hiring new mid- and upper-level employees. …
Southern California’s real estate market has been red hot for a few years now, thanks to low mortgage rates, a strengthening economy, and dwindling home supply. Zillow pegs the median home value in Los Angeles at $616,900 and the median rent at about $2,860. That’s compared to $195,700 and $1,500 for the US as a whole.
The City of Angels is not the only US locality where workers and employers are facing this challenge. Further north, exorbitant rents in the San Francisco Bay Area are one factor making tech talent think twice before taking a job in Silicon Valley, and even encouraging some employees there to seek out opportunities to relocate to less expensive cities last year. Housing is also a key contributor to the high cost of living in other major metropolitan areas such as New York, Boston, and Washington, D.C. That reality has motivated some companies to experiment with housing benefits, offering employees money to help them buy or rent homes closer to an office located in a high-cost area, or to give cost-of-living raises to employees in these cities, as REI did last year.