Incomes up, but so is the cost of living

BURBANK — Incomes in the San Fernando Valley are higher than the national average, but residents pay for it in increased housing costs and longer commutes to work, according to a recently released U.S. Census Bureau report.

And in Burbank, where median home prices exceed even San Fernando Valley averages by 11%, making home ownership a reality for middle-class buyers remains a challenge for legislators, Rep. Brad Sherman said.

"Half the homes in America — single-family homes — sell for under $168,000," he said. "When I tell my [Congressional] colleagues that I represent middle-class people who pay $525,000 for a house, they'll say, 'How do they do it?' and I say, 'Well, they don't spend money on anything else.'"

For the first time, the Census Bureau's "American Community Survey" specifically targeted the San Fernando Valley, showing huge discrepancies between the social and economic situations of the 1.74-million residents in the valley and those of average Americans.

"This also shows that there is some significant poverty in the valley," Sherman said. "It shows that home prices are higher in the valley than they are even in the city of Los Angeles, Los Angeles County or the whole state."

In an attempt to make housing more affordable, Sherman has fought in Congress for an increase in the conforming loan limit, he said.

If a loan amount does not exceed the conforming loan limit, which is currently $417,000, the borrower can mortgage a home through government-subsidized lenders that offer lower interest rates. Raising the limit would allow more buyers to take advantage of a reduced interest rate, he said.

But the root of escalating prices lies in the availability of middle-class housing in Southern California, which pales in comparison to the demands, said Jack Kyser, the Los Angeles County Economic Development Corp.'s chief economist.

The Economic Development Corp did a study two years ago for the Los Angeles and Long Beach chapters of the Building Industry Assn. that exposed a shortfall of 240,000 housing units in Los Angeles County.

"Basically there is more demand than supply of what you call middle-class housing in the San Fernando Valley, so the prices are higher," he said.

Developing more affordable housing, however, may require increased population density, a strategy that does not sit well with many people because with density comes more traffic and congestion, Kyser said.

And traffic congestion remains a top concern in a region where commuters spend an average of 29 minutes commuting to work, which is 7.4% longer than the average Californian's and 15.5% longer than the average American's, Sherman said.

Now that those figures have been documented in the census report, state legislators in Sacramento can use those figures to lobby for funds to improve Southern California infrastructure, he said.

"I think that arguably the most important thing that [the census report] shows is that Valley residents spend longer commuting on average," he said.