In Affordability, West Hollywood Ranks Next to Last in a List of the Best Small Cities in America

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West Hollywood is ranked as the second least affordable small city in America in a recent study by WalletHub, the personal finance website.

WalletHub’s 2020 Best Small Cities in America report ranks West Hollywood as No. 1,267 in affordability among the 1,268 cities with populations between 25,000 and 100,000 that it measured. West Hollywood also ranks 1,172 among those cities in terms of public safety. 

The most unaffordable city on the WalletHub list is Passaic, N.J., a city of about 70,000 people that various websites rank as 20% to 25% more expensive than the national average. The cities that rank worse than West Hollywood in terms of public safety are mostly in the South, with Alexandria, La., a city of 46,776 people, ranking the worst.

Four of the cities with poor public safety rankings  — Miami Beach and Daytona Beach, Fla., Myrtle Beach, S.C., and Atlantic City, N.J. — are tourist destinations, as is West Hollywood, which might explain their relatively low positions in the public safety ranking. One notable ranking is Compton, Ca., which is No. 1,136 in the public safety ranking, 36 points above West Hollywood.

West Hollywood does however, almost rank in the top fifth of all small cities when other criteria are added to the overall ranking, such as quality of life (it ranks No. 23 among 1,268 cities), economic health (ranks No. 422) and education and health of its residents (ranks No. 574). With all of those taken into consideration, West Hollywood is in the 21st percentile of the 1,268 cities.

The WalletHub assessments are done by a group of professors who include Anthony Orlando, an assistant professor of real estate at CalState Polytechnic University; David Fiorenza, an assistant economics professor at Villanova University School of Business; Philip Swicegood, chair of the Finance Department at Wofford College; Fred Smith, economics professor at Davidson College; John Infranca, law professor at Suffolk University, and Jack Furst and John Baen, real estate appraisers and brokers who have taught at the University of Texas.

Affordability was determined by considering the city’s median income, its cost of living, its home ownership rate, housing costs, and the percentage of households with “severe housing cost burden.”  Each of those criteria was weighed equally. Given that 78% of West Hollywood’s residents are renters, the city’s low percentage of homeowners likely had a significant impact on the affordability ranking.  Another major factor is likely the fact that, according to city studies, more than half of the city’s renters are “rent burdened,” meaning they spend 30% or more of their income on rent and thus may face challenges paying for food, clothing, transportation and medical care.

The public safety ranking included assessments of violent crime and property crime rates and deaths from motor vehicle crashes. Crime has declined sharply in West Hollywood and other cities in Los Angeles County since the beginning of the COVID-19 pandemic.

West Hollywood’s high ranking in terms of quality of life reflects its number of restaurants, bars, clubs, and coffee shops. Other factors that went into that ranking included the number of parks per capita and the number of fitness centers per capita. Factors such as the share of the population that walks to work, number of movie theaters per capita, and number of museums per capita likely had no impact.

The economic health ranking took into consideration the median credit score of the city’s residents, the population growth and income growth, growth in the number of jobs, the unemployment rate, the share of the population living in poverty, the foreclosure rate, and the number of residents who filed for bankruptcy in the past 12 months. Those calculations are based on pre-COVID-19 pandemic data.

The education and health ranking includes, among other factors,  the average number of COVID-19 infections per 100,000 residents in the last seven days, the percentage of the population with health insurance, the share of adults in poor or fair health, the percentage of obese residents, and the share of adults with a high school or college diploma.

With its ranking in the  23rd percentile of Best Small Cities in America,  WeHo is ahead of other nearby small cities.  South Pasadena is in the 44th percentile, followed by Beverly Hills in the 45th percentile, Culver City in the 48th percentile and Santa Monica in the 55th percentile