Today’s LA Times notes that the LA Unified School District (LAUD) is close to hiring a search firm to take over the job of finding our next superintendent.
Wondering why I’m discussing this on a multifamily real estate blog?
Well, I’m thinking about long-term tenant demand.
Right now, the vast majority of new tenants moving into higher-end rentals in core neighborhoods of LA, from the Westside through Downtown, are Millenials without children.
This has obviously been great for rents.
But what happens as these people age? If, like every previous generation, they decide to have kids, they’re going to run into a major problem: LAUSD is terrible. It’s a huge, urban district run mostly for the benefit of the adults involved, rather than the kids it serves.
Affluent people in LA avoid LAUSD (at least, after elementary school) by paying for private school. But that’s expensive – you’re looking at $20-25 / year (after taxes!!) / kid. That’s far too expensive for normal people.
So, if LA is going to retain Millenials as they reach child-bearing age (in LA, that’s probably 32-40 years old), we are going to need to do something about the schools. Otherwise, our tenants are going to do what the Baby Boomers and Gen X did: Move to the suburbs.