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What is the Actual Cost of Living in Los Angeles?

With a population of approximately four million residents, Los Angeles is the second largest city in the United States. When considering the entire Los Angeles county, including its smaller cities, the urban area has a population of over 10 million. Despite its diversity, one thing is certain: the cost of living in Los Angeles is quite high.

In addition to its iconic palm trees and lively nightlife, Los Angeles holds a significant impact on American culture. The city is a hub for industries such as arts, design, entertainment, sports, and media, making it a popular destination for individuals seeking to make a name for themselves in these fields.

According to Numbeo’s cost of living index, which takes into account the expenses of consumer goods such as food, dining out, transportation, and utilities, Los Angeles received a score of 79.49 out of 100 in July 2020. This indicates that living in Los Angeles is approximately 20% cheaper compared to New York City, which serves as the benchmark on the index.

However, when considering the cost of rent, the score drops to 74.88. This puts Los Angeles right in between San Francisco and San Diego in terms of affordability. The living expenses in Seattle are similar to those in Los Angeles, while Portland is about 10% cheaper.


The high cost of housing is the primary factor that makes living in Los Angeles so expensive. The median purchase price of $650,000 makes homeownership unaffordable for many of the city’s residents. As a result, as many as two-thirds of the population rents their homes, which is similar to other large coastal cities.

Due to the high demand for rentals, the supply is usually limited, with a vacancy rate of only 5.1% in March 2020. The lower the vacancy rate, the more expensive the available apartments become, as seen in cities like New York and San Francisco, which have the lowest vacancy rates and highest rents in the country.

This combination of low vacancy rate and high demand for housing in Los Angeles result in high average rental costs compared to other areas of the country. As of January 2020, the average rent for apartments in LA was $2,545, which is nearly double the national average of $1,463.

Some neighborhoods in Los Angeles, particularly those that are popular and trendy, have some of the highest average rents in the country, such as Playa Vista ($3,415) and Venice ($3,203). Renters who are looking for more affordable options may consider the Valley, where rents in Van Nuys average around $1,960, or northeast of downtown, where the up-and-coming neighborhood of Eagle Rock has monthly rents of approximately $1,931.

Despite the high rental costs in Los Angeles, living in the city can still be attainable through co-living arrangements, such as sharing a home with roommates. This can result in substantial savings compared to the cost of solo housing. For instance, the average cost for a private room in a shared home through Bungalow in LA is up to 7% less expensive than the average rent for a studio apartment in the same area.

The average purchase price of homes in Los Angeles may appear inflated due to the high-priced sales of luxurious mansions owned by celebrities. A more accurate representation of the real estate market can be seen through the median sale price, which is the point where half of the sales are higher and half are lower. The median sale price in Los Angeles is $738,000, which is slightly higher than in other major cities such as Washington, D.C., Boston, and New York City, and is approximately three times the national median purchase price of $245,000. The median price for a condo in Los Angeles is slightly lower, at $541,000.

Due to its vast size, the cost of homes in Los Angeles can vary greatly depending on the location. For example, the median price for single-family homes in the beachfront neighborhood of Venice is $1,763,285, while in Mid-City, the median price is $835,074. The median prices in Downtown LA are in the $700,000 range.



When you reside in Los Angeles, you not only get to enjoy the city’s desirable Mediterranean climate, but you also save money on heating and cooling expenses compared to other regions of the country. Many older apartment buildings in LA lack central heating or air conditioning, and on the west side of the city, most homes do not require AC due to the cooling ocean breezes.

As a result, residents of Los Angeles can expect to pay approximately $30 less per month for utilities compared to the national average. The average cost of utilities, including electricity, gas, water, and garbage pickup, in LA is $129 per month. Homeowners have the option to install solar panels, which can even generate money through the excess energy produced.


Los Angeles, known as the birthplace of the taco truck, is a hub for delicious and budget-friendly food options. Tacos typically cost between $1.50 and $2 each, while a meal at one of the city’s upscale restaurants can cost around $38, which is 28% cheaper than the same meal in New York City. In LA, the sales tax is 9.5% and will be added to the final bill.

For those who enjoy cooking at home, Los Angeles provides access to high-quality produce at reasonable prices. Groceries are generally not taxed, and the prices for basic items like eggs, milk, and bread are comparable to those in other parts of the country. On average, residents of Los Angeles can expect to spend approximately $375 per month on food.


Los Angeles is a city that is heavily reliant on cars, as its reputation for traffic congestion suggests. Although the LA Metro public transportation system is convenient for those living near its lines, the city’s sprawling size means that many neighborhoods and neighboring cities are not accessible through public transit. As a result, 84% of Los Angeles residents drive to work, while only 6% use public transportation.

Gas prices in Los Angeles are some of the highest in the country, averaging a dollar more per gallon compared to the national average over the past year. The prices fluctuated between $2.75 and $4.25 from June 2019 to June 2020, settling at around $3 per gallon at the end of that period. Only Hawaii has higher average gas prices.

Drivers in Los Angeles spend a significant amount of time on highways and also pay a significant amount for car insurance. On average, car insurance in Los Angeles costs $1,964, which is $537 more than the national average for comprehensive insurance, which is $1,427.

For those seeking to reduce their transportation expenses, the LA Metro public transportation system is an option for residents and commuters in areas such as Downtown LA, Koreatown, Hollywood, Culver City, Santa Monica, Pasadena, and Long Beach. The system offers bus and rail options for $1.75 per single ride, with monthly passes starting at $100 or $122 with express bus service. This cost is comparable to the monthly pass prices in nearby San Francisco ($98) and less expensive than in New York City ($127).


The high cost of living and housing in Los Angeles requires higher salaries, which is reflected in the city’s minimum wage of up to $15, which is higher than the state’s minimum wage of $10 and nearly double the national minimum wage of $7.25. The average worker in the Los Angeles metropolitan area earns $28.74 per hour, equivalent to about $60,000 per year, which is 12% higher than the national average of $25.72. However, this is still not enough to make up for the 42.6% higher cost of living.

On the upper end of the salary spectrum, jobs in the Hollywood film industry can pay well, with the average producer earning over $76,000 per year. LA’s recent growth as a technology hub has also increased demand for software engineers, with an average salary of nearly $106,000.

If you are considering a move to Los Angeles, California, reducing your housing costs and finding a higher-paying job can go a long way in helping to balance your personal budget.

Elly Johnson stands at the forefront of content research and online branding at Utopia Management. As the Content Marketing Manager, she delves deep into understanding local real estate and rental markets, fueled by her passion for travel and keen research skills. Elly is dedicated to empowering individuals with the knowledge they need to make informed decisions about where to reside. A proud alumna of the University of South Florida, located in the vibrant heart of Tampa Bay, she holds a Bachelor of Arts in Psychology. Her academic background and extensive travel experiences uniquely position her to provide insights that resonate with diverse audiences.

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