Photo: James Bombales
Remote work has opened up a lot of doors for would-be homebuyers in Los Angeles. Looking back on it now, our pre-pandemic way of life seemed to be on an endless loop.
Employers, particularly those in the tech and creative industries, would set up shop in trendy, high-priced neighborhoods like Santa Monica, West Hollywood or Culver City to attract talent. But the city’s notorious bumper-to-bumper traffic kept Angelenos in apartments near those employment centers, paying absurd sums of money for dated studios without dishwashers lest they be subject to hellish, two-hour commutes.
But as more companies adopt work-from-home policies, renters in Los Angeles are reevaluating their living situations. According to a new Zillow study, 17.2 percent of renter households in LA could afford the mortgage payment for a typical US starter home — valued at $131,740 — if they moved to a less expensive locale and continued teleworking.
In some metropolitan areas, first-time homebuyers simply look to the suburbs for affordable options, but that’s certainly not the case in Los Angeles. Only 0.8 percent of renters could afford to buy a starter home on the outskirts of the city. Lower-priced alternatives popular among Los Angeles home searchers include Riverside, Las Vegas and Phoenix, suggests a recent Redfin migration analysis.
Several other California cities were listed among those with the highest share of renter households that could buy the typical US starter home if allowed to telecommute. San Jose came in first with 25.2 percent, followed by San Francisco at 22.0 percent. Los Angeles nabbed third place and was trailed by San Diego with 15.4 percent.
Across the country, an estimated 2 million people who can’t afford to buy in the urban market where they currently rent could afford a starter home elsewhere. Of course, not everyone wants to trade Erewhon Market for a Walmart Supercenter, so the odds of this phenomenon taking place on a large scale are slim.
“In many cases, it may be far more likely that current residents can’t or won’t flee and cut the cord with their hometown entirely, and instead exchange it for an extension cord — moving from the commute-friendly center city to farther-flung suburbs, but still maintaining ties,” concludes the report.
“But the affordability benefits in moving from the city to the suburbs, rather than from one metro area to an entirely new, cheaper one, are less-pronounced.”