When did middle-class aspirations become such a slippery proposition in our city?
Gilberto Ruiz lives in a land beyond housing regulations in a converted garage on Van Ness Street just off Santa Monica Boulevard. He’s just a stone’s throw from the Hollywood Forever Cemetery, its bourgeois schedule of outdoor movies and au courant cultural events. It’s a safe bet, though, that not many would park their Teslas on his gritty block to make the short walk over to take in whatever distractions await behind the gates. That’s okay with Ruiz; he’s found a grimy-but-affordable niche for himself in Los Angeles, where affordable housing is a complicated issue. The Los Angeles Homeless Services Authority (LAHSA) currently puts the countywide number of people living out-of-house at 60,000. At the same time, tens of thousands of units across the city sit vacant.
Ruiz has been grinding his way to the bottom of the middle class for 16 years, but he isn’t homeless yet and he plans to keep it that way. Today, 5 p.m. arrived a little early for the 30-year-old cashier recovering from six consecutive days of 10-hour shifts at a grocery store in Koreatown. He yawns, stretches and lies back down on his bed. Ruiz’s roommate is still sound asleep on a mattress behind a couple of old dressers pushed together a few feet away. Still in yesterday’s clothes, Ruiz rallies and picks his jacket up off the concrete floor and heads out to his favorite taco truck in a parking lot on the corner of Sunset Boulevard and Western Avenue.
Ruiz is holding tight to his middle-class aspirations. Though defined by the Pew Research Center as comprising those making between 67-200 percent of the median household income, “middle class” is a highly relative term, one that is as psychological as it is statistical. What amounts to middle class varies wildly in the U.S. by region and just as wildly in L.A by neighborhood or block. In Los Angeles, anyone making between $46,661-139,984 could be considered middle class by income. The lower end of that range, however, will get you a tent in tech-saturated Santa Monica, where rent averages $3,851 , while the higher end would put you in a mansion on the hill in El Sereno, where rents average just below $1,500.
Across L.A. county, two-thirds of renters pay more than $2,000 per month and rents average just over $2,500. And while the statistical middle class has been shrinking for decades, the psychological one hasn’t yet gotten the memo. The Pew Center reports that Americans remain stubborn in their conviction that they are middle class whether making $400,000 in Palo Alto or $40,000 in East Hollywood.
In Los Angeles, anyone making between $46,661-139,984 could be considered middle class by income. The lower end of that range, however, will get you a tent in tech-saturated Santa Monica…
Being middle class is a slippery proposition, one that Ruiz has been chasing since he crossed the border at Tijuana when he was 14 with eyes set on the American dream. He worked in the fields for a week but quickly decided that wasn’t for him. “I said, ‘I don’t know what I’m gonna do but it sure as fuck is not gonna be this,’” he says with a laugh. Since then, he’s accrued a long list of minimum-wage jobs while assisting a photographer on his days off shooting quinceañeras and weddings. Ruiz harbors some creative ambitions — he used to shoot protest marches and rallies and some of his short films have made it into festivals — but that’s mostly fallen by the wayside. “Resistance is bad for business,” he says.
These days, he walks a tightrope without much of a net beneath him. His Korean grocery store gig is the best he’s had pay-wise, earning him $750 a week, but his living situation is tenuous. He pays $500 a month in rent for his converted garage but has no formal rental agreement and his landlord is unpredictable.
Ruiz is a relentless optimist but he seems to be running out of steam. Deep lines on the side of his mouth make him look older than he is and at some point, he started picking up a six-pack of Modelo on his way home from work. Today, he’s a little hungover, but tomorrow he will take the Greyhound headed towards north of Sacramento where his family owns a restaurant. Ruiz is thinking about relocating there, though his original plan was to save up some money and go back to Cal State Los Angeles. He had been pursuing a bachelor’s degree in engineering, but he hasn’t been enrolled in school in over a year. Right now he just doesn’t have the energy.
Ruiz is at-risk almost by definition. “California Feudalism: The Squeeze on the Middle Class,” a much-referenced 2018 research project sponsored by Chapman University’s Center for Demographics and Policy, notes that one-third of California’s Latinos and one-fifth of African Americans hover precariously just above the poverty line. One health-related incident or rise in rent could send them plummeting. Even scarier for Ruiz is that two-thirds of undocumented Latinos — like him — live at or below the poverty line and make up more than 50% of California’s poor.
Homeownership as a Luxury
Los Angeles didn’t become a citywide tent encampment overnight.
Years of stagnant wages for all but top earners combined with soaring home prices have put even modest homeownership out of reach for most who aren’t already wealthy. At the risk of metaphorical overload, it’s worth noting that “The Brady Bunch” house in Studio City, a neighborhood that once embodied the city’s robust, postwar middle-class, recently sold to HGTV for $3.5 million (1.6 million more than the asking price). Therein lies the conundrum: a modest house, which for decades has been the primary source of wealth for most middle-income Americans, is turning into a luxury item. Skyrocketing rents threaten to do the same to apartments.
Ruiz may be at risk, but he is not among the most vulnerable. A legacy of discriminatory housing and financial practices, gentrification, a severe shortage of new, affordable housing — despite billions being allocated toward that goal — and a slew of other social ills have left African Americans, who comprise just 8% of the county’s population, accounting for 42% of the county’s homeless.
It’s not like nobody knows this. Gov. Gavin Newsom’s signature is still drying on AB 1482, which caps rent increases statewide at 5% plus inflation annually. It also restricts landlords from evicting people in order to raise the rent on new tenants. The new law has plenty of critics and a lot of exceptions, but for the 8 million of California’s 17 million renters to whom the measure applies, it may offer some sense of security — at least until it sunsets after 10 years.
What it doesn’t do, however, is address the 3.5 million new housing units the governor says are needed to stabilize the state’s housing crisis. Newsom has called for a “Marshal Plan” to meet the state’s housing needs and budgeted nearly $2 billion to get the job done (it’s worth noting the U.S. spent $12 billion rebuilding Europe after WW II). It’s an admirable endeavor, but results may vary.
A legacy of discriminatory housing and financial practices, gentrification and a slew of other social ills have left African Americans, who comprise just 8% of the county’s population, accounting for 42% of the county’s homeless.
Take Los Angeles for instance. In 2016, Angelenos passed Prop HHH, a $1.2 billion bond measure aimed at funding the development of 10,000 housing units in 10 years to combat the city’s rampant homelessness. Slow construction, rising building costs and diminishing federal tax credits, though, have frustrated progress as well as the proposition’s supporters.
The first units are just now coming online at 88th Street and Vermont Avenue. Those units include 46 set aside for chronically homeless people and 14 more for low-income residents, but HHH money is running out thousands of units short of its goal, leaving the city to scramble for creative ways to fill the gaps. Mayor Eric Garcetti, who, like the governor, has often been at loggerheads with the Trump administration, has recently undertaken a letter-and-phone diplomacy initiative that the Los Angeles Timesreports has the city on the brink of a deal that would bring federal “funds and land” to bear on the crisis.
Meanwhile, the technocrats have flipped every coastal neighborhood from Culver City to Costa Mesa and are moving inland. The markets have spoken and, as a transactional necessity, the service class is still welcome to stick around in relative squalor, but the middle might need to think about packing its bags.
Among those fleeing are the artists, writers and intelligentsia who can’t pay the high rents. Tenants at downtown’s Santa Fe Art Colony, for decades a haven for artists in a gritty, industrial zone, recently had their rents doubled and tripled after hard-nosed, Miami-based development agency, Fifteen Group, bought the complex. One person’s rent rose from $1,426 to $4,493. And though times might be such that mustering sympathy for the plight of artists who had been paying under-market rent is also a luxury, it figures into new middle-class homelessness. Where do they go? What happens to a city that can’t provide shelter for its writers, artists and journalists, let alone its cops, teachers and students?
Almost everyone agrees, too, that even as more and more people are living without secure shelter, vacancy rates are running rampant. According to U.S. Census estimates, between 2010-2017, Los Angeles tallied between 90,000 to100,000 unused or underused units. A significant number of these vacancies are likely due to owners holding out for the higher rents and home prices pending gentrification promises to bring.
Capitalism’s Slippery Slopes
Foot traffic is slower than usual at the intersection of Los Angeles and 5th Streets. Jen, a 20-something-year-old Honduran American woman who works in a wholesale sunglasses store says it’s been slow for a while. “The people are just not coming to buy,” she says. “The store isn’t making enough to survive long.”
Just down the block, Felix, a 57-year-old naturalized American citizen from Oaxaca, Mexico and owner of a competing sunglasses business for 10 years, agrees.
“People came to buy, but now they don’t come as much,” he says. “Maybe they have no money, or they’re scared of the government. I don’t know. The prices are going up — the price, the tax. Right now, there’s no middle class, just poor and rich. That’s it. I think all the middle class has disappeared. Small business is gone. No more. The middle class is now the poor people. Nobody comes to buy.”
Felix and his wife live in Long Beach with their two adult children. He says they have been working since they arrived 30 years ago. He also says he was middle class 10 years ago when he made $2 million a year in business. “Now I’m poor,” he says. “Trump, maybe he’s smart people, but I don’t know why he hates the Latino people. His administration is ending small business. It’s racism, plain and simple.”
“Small business is gone. No more. The middle class is now the poor people. “
Felix, small business owner in downtown L.A.
Felix is probably referring to the “opportunity zone” tax benefit the Trump administration tucked into its massive 2017 tax cut windfall for the wealthy. The opportunity zones were advertised as a boon for small businesses but in practice have turned out to be a scam for the wealthy, who instead of investing in blighted areas have poured untaxed profits into high-end apartments and hotels.
Felix may be upset about that, but he’s in a good place compared to the more than 720,000 county residents who spend more than 50% of their income in rent. The New York Timesrecently reported that Angelenos need to earn $47.52 per hour to afford the median rent, which is a tough nut in the gig economy and might help explain the more than 16,500 people living in their cars. Felix is lucky to own a house in Long Beach that the family bought in more prosperous times. He thinks he’ll probably sell it and move back to Mexico with the way things stand.
A few blocks east, Adam Rice, who works with the Los Angeles Community Action Network (LACAN), a grassroots organization that advocates for people on skid row, pins Angelenos’ economic decline on end-stage capitalism. “That’s what happened to the middle class,” Rice says. “You don’t need a means of production anymore. We’re a digital economy and your manufacturing base has been shipped off to make money for the oligarchs.”
He’s right in that while Bel Air technocrats and other billionaires are buying up hot properties and planning their escapes to Mars, they are also widening the divide between the rich and poor and displacing the middle class in the process. Rice calls gentrification the “eradication of the middle class” and speaks of the obsolescence of homeless initiatives that still operate on failed market-incentive models.
Rice pegs the actual number of homeless in L.A. County at more than triple LAHSA’s 60,000 count. That number seems high until you take a look around. “There were less than 500 tents down here 10 years ago,” he says regarding skid row. “Ten years and $10 billion later, there’s 3,000. Many of those people were middle class at some point.”
On the bright side, the U.S. Department of Housing and Urban Development says the number of homeless veterans and family members in the greater Los Angeles area is down from 3,886 in 2018 to 3,878 in 2019 — eight fewer homeless vets to worry about!
Unfortunately, Mary Anne isn’t one of the lucky eight and she’s having a bad day. She’s one of a small community of homeless vets living in tents on the sidewalk near the Veterans Affairs Los Angeles regional office on San Vicente Boulevard at Kiowa Avenue in Brentwood, somewhat in protest and about to be rousted. The ground is still damp from the morning dew when sheriff’s deputies line up at one end of the 200-yard stretch of tents while LAPD officers assemble at the other. When a big, yellow tractor and a maintenance crew move in, Mary Anne and the others scramble to pack their tents, tarps, rugs and clothes before they get scooped up.
“Cops showed up to clean up so it’s not the best time,” she says, organizing her things into a blue nylon cart with a metal frame as her little brown dog watches nervously. She says she used to be Navy but is being denied services by the V.A., before adding that she doesn’t have time for small talk with the authorities pressing down. “I don’t mean to be rude,” she says.
Ironically, the V.A. campers are being moved out on the same day in mid-December that the Supreme Court declined to review the U.S. Ninth Circuit Court of Appeals decision in Martin v. Boise that enforcing public health regulation and ordinances on homeless campers without providing enough shelter beds is cruel and unusual punishment.
Robert Ferguson, a vet from Bakersfield who is busy shoving everything he has into his small tent, jokes that the police here “didn’t get the memo.” He says he’s been trying to get clinical treatment since 2017. “I need to get into this program. I need everything: clinical treatment, housing, dental — everything. They took my teeth,” he says, smiling with his lips pressed together.
How people become houseless is not a mystery. Things unravel one overdue bill at a time. Fifty-three percent of people experiencing homelessness in L.A. for the first time say economic hardship was the culprit. LAHSA estimates that 10,000 of the county’s homeless are on the streets for the first time. How many were middle class, or thought they were, not so long ago?
There may not be hard numbers associated with the middle-class slide into homelessness, but when you consider that in 2017 Zillow estimated a 5-percent spike in rents could render 2,000 people homeless and that Los Angeles rents have risen 65 percent since 2010, nearly twice the national rate, housing costs surely account for a chunk of the 16-percent spike in homelessness in 2019. Given the apparent inability to marshal anything like a serious response to the structural, economic and social challenges that go with this slide, it’s a trend that isn’t likely going away soon.
Once you’re homeless, the odds of getting back inside quickly are not great for myriad reasons — coming up with first and last months’ rent, passing credit checks, getting referrals. There is a good chance that you could die trying. In Los Angeles, more than 1,000 homeless people died last year. The average age of the deceased was 48 for women and 51 for men.
A So-Called Middle-Class Life
Meanwhile, Ruiz recently quit his job at the Korean grocery store and has decided he’s moving back to the Central Coast town where he grew up. He has family ties there and a place to live while he gets his bearings. He still has a vision for his education and a middle-class life, but not in L.A. “It was a setup,” he says, no longer laughing. “L.A. set me up. It wasn’t like that when I moved here.”
L.A. was once a city full of thriving middle-class neighborhoods. In a month-long series Los Angeleno explores what we lose when an Affordable L.A. is just a dream. Join the conversation on social media with the hashtag #AffordableLA.