The ranking by the Arlington, Va., nonprofit research group is a composite derived from six baskets of goods, including groceries, housing, transportation and utilities. The 57 items that make up the index are individually priced each quarter, with home costs given the greatest weight.<\/p>\n
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Jessica Ross shops at Ralphs in Chatsworth. <\/p>\n
(Carlin Stiehl \/ For The Times)<\/p>\n
It does not include sales taxes, which are among the highest in the nation<\/a> in California.<\/p>\n Manhattan and Honolulu, two notoriously expensive cities to live in, rank No. 1 and No. 2 on the index nationally, with San Jos\u00e9, San Francisco and Orange County rounding out the top five. Three other New York City markets also top L.A.<\/p>\n Exacerbating the affordability crisis, according to economists, is L.A.\u2019s relatively lower average wages compared with other expensive urban areas, despite growth in high tech jobs in industries such as aerospace and defense. <\/p>\n While it might seem that Angelenos would catch a break buying food, given California\u2019s large agriculture industry and the city\u2019s highly competitive supermarkets, the L.A. region nevertheless ranks 13th in grocery prices.<\/p>\n Nate Rose, a spokesperson for the California Grocers Assn.,<\/a> said a supermarket bag reflects multiple costs, which are high in the state. Those include costs for land, fertilizer and diesel<\/a>, which have been affected by trade disputes and the U.S. war with Iran.<\/p>\n \u201cIf you\u2019re paying more at the pump, you might not think about the fact that it\u2019s costing more to truck the food around, but that is the reality,\u201d he said. \u201cIt\u2019s all connected.\u201d<\/p>\n Cost of housing<\/p>\n One of the biggest drivers of inflation in L.A. is, unsurprisingly, the cost of housing, which ranks ninth nationally. The city is topped only by Honolulu, four New York City-area markets and three California urban areas: San Jos\u00e9, Orange County and San Francisco.<\/p>\n The monthly mortgage on a new home is given the single highest weight in the cost of living index since it is typically the single highest cost of any family\u2019s budget.<\/p>\n The survey compares the price of a 2,400-square-foot residence on an 8,000-square-foot lot, which is larger than the typical L.A. home or lot, but allows for a precise comparison to the other 248 urban areas. <\/p>\n The average price for such a property is $1.34 million in the L.A. area, less than half the price of No. 1 Manhattan (where the lot size is waived), but about twice as much as Chicago. The average monthly mortgage is $6,318, ranking eighth nationally. <\/p>\n The city also ranks 15th in the cost to rent a 950-square-foot apartment at $3,084 per month.<\/p>\n Shane Phillips, a housing expert with the Lewis Center for Regional Policy Studies<\/a> at UCLA, said the high price of homes reflects the lack of construction of new housing over decades.<\/p>\n \u201cWhen the rest of the country was booming in the 2000s, Los Angeles was building effectively nothing. We did not respond to the boom at all,\u201d he said.<\/p>\n Housing costs could come down if the city were to allow four-story, 12- to 15-unit residences on standard home parcels, which could lower the price of a new home below $500,000, Phillips said. But he believes that would be politically impossible due to neighborhood opposition.<\/p>\n Such a price would make a home more affordable for the average L.A. County resident, who made $1,704 weekly in the first quarter, according to the latest Bureau of Labor Statistics data<\/a>.<\/p>\n While the average L.A.-area wage is above the nationwide average, it is well below that of some other high-cost areas, such as $4,902 in New York City and $4,650 in San Mateo County.<\/p>\n Michael Bernick, former director of the California Employment Development Department, said that while L.A. is a high tech center, it also has many jobs in food prep, building maintenance, personal care and other low-paying industries.<\/p>\n \u201cThere\u2019s also a very large low-wage workforce in Los Angeles,\u201d he said.<\/p>\n The index does not include the cost of home insurance, which, amid a rise in wildfires statewide, cost Angelenos $2,248 on average last year, up a whopping 75% since 2021, according to mortgage lender Newrez<\/a>.<\/p>\n Still, California home insurance premiums have trended below the national average for decades. So, despite the recent rise, L.A. ranks 14th in cost among the 20 largest metro areas nationwide, according to the lender\u2019s study.<\/p>\n Pain at the pump<\/p>\n If there\u2019s one unpleasant economic experience that binds Angelenos together, it\u2019s pain at the pump \u2014 and since the start of the Iran war it\u2019s only gotten more acute.<\/p>\n The average cost of a gallon of gas was close to $5.98 in the second quarter, according to the index, tied for second nationally and topped only by San Francisco and Oakland, which tied for first.<\/p>\n In fact, the top 10 high-cost urban areas nationwide were all in California, with the state seeing a sharper rise in gas prices than elsewhere around the nation. Other high-cost California cities included San Diego, San Francisco and Oakland.<\/p>\n After dropping this summer, prices are on the rise again as hostilities resume between the U.S and Iran. A gallon of gas hit $5.92 in Los Angeles this week, according to AAA.<\/a> <\/p>\n Diesel prices also hit a record national average of $5.85 a gallon last week, with California nearing $7.71<\/a>, squeezing the state\u2019s trucking, farming and trade industries.<\/p>\n The high cost of gasoline in California has been largely attributed by experts to high taxes, environmental fees, a special summer blend to reduce smog and the closure of refineries.<\/p>\n Energy expert Severin Borenstein, faculty director of the Energy Institute<\/a> at UC Berkeley\u2019s Haas School of Business, said no one should expect prices to come down in the state any time soon.<\/p>\n It is unlikely, he said, that gas taxes or environmental fees will be cut, and even if Californians continue to switch over to electric vehicles, reducing the demand for crude oil, that might result in the closure of refineries.<\/p>\n \u201cThat could actually lead to some market power that would drive up their margins,\u201d he said.<\/p>\n The cost of living index does not include the price of auto insurance, which has risen more than 30% statewide<\/a> since 2022, driven by more expensive vehicles, complex repairs and other factors.<\/p>\n Statewide, rates are near the national average due to California\u2019s tightly regulated insurance industry. Nevertheless, in congested L.A., drivers paid on average $3,730 last year, nearly 50% higher than the statewide average, according to insurify.com<\/a>.<\/p>\n After dropping this summer, gasoline prices are on the rise again as hostilities resume between the U.S and Iran.<\/p>\n (Carlin Stiehl \/ For The Times)<\/p>\n Rising utility bills<\/p>\n Utility bills are another area where Angelenos often pay higher rates than much of the rest of the country.<\/p>\n While Southern California Gas<\/a> charges ranked low nationally in the survey, electricity costs are another story. The L.A. area ranked 35th nationally, or in the top 15%, for overall utility charges in the index \u2014 with a wide disparity in charges.<\/p>\n Much of the area is served by Southern California Edison<\/a>, which charges a higher rate than the other large electricity provider, the Los Angeles Department of Water and Power, according to a report last year<\/a> on state utilities by the Little Hoover Commission.<\/p>\n Residents of Northern California pay even more after the 2019 bankruptcy of Pacific Gas & Electric<\/a>, due to catastrophic wildfires caused by its transmission lines, the Hoover report noted. San Francisco and Oakland rank higher in the utility cost index than L.A.<\/p>\n And rates may go even higher.<\/p>\n![\"A](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/09\/1789039692_176_.jpeg\")
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