Green: That is correct, but is still good substantial growth. We had a couple of years where we were north of 5%. That is not sustainable, even over a short period of time.

GlobeSt.com: Many real estate professionals say that this is really a supply problem. What is your take?

Green: I don't think development itself is a solution, but it sure helps a lot. You need subsides. For the folks making $30,000 a year, the market is never going to provide the housing that they can afford in reasonable locations. They could drive three hours to work, but that really isn't sustainable either. The market should be able to reach people making $70,000 to $90,000 per year, and we aren't even there yet. I think that building a lot more would help those people out tremendously, and then, in addition to that, you need more subsidies. That is true of any large city in the world; it isn't a uniquely Los Angeles phenomenon.

GlobeSt.com: Are there other cities that already use subsidies that we could use as a model?

Green: New York uses subsidies more than the California cities do. They have a long history of public housing with, if I recall correctly, about 1 million public housing units. There are a substantial number of people that live there, so it is accepted. It also doesn't immediately tag you as an unemployed person. There are a lot of low-income people who live and work in public housing. In New York, they still don't have enough, but they do more than we do here. If you look at other expensive cities globally, like Singapore and London and Hong Kong, they use housing subsidies far more than any American city does.

GlobeSt.com: What is the local economic impact of extreme rent growth?

Green: It is hard to know. I always think that it is going to kill cities, but then I look at places like London, where they have had extreme rent growth. The one thing that we are seeing in L.A. is that we are importing people with college degrees and exporting people with didn't finish college. The ability to have a labor force that can do the day-to-day work that you need in an economy is being compromised right now. We are seeing it in new construction, where every developer complains about the lack of labor to build things. In hospitality, we are also seeing wage growth. In food and beverage, they are paying people more, and that has to show up somewhere.

GlobeSt.com: The Los Angeles population is growing. Do you think that housing costs will detour migration here?

Green: Total migration has actually slowed considerably here. The migration that is coming is higher income, which is where demand pressures are coming from. But, we are nowhere near the migration now that we had 20 years ago. I think that is very much a product of how expensive it is to live here. If someone were trying to move here from a place like Cleveland, it would be a much harder thing to contemplate.

Los Angeles rent growth is expected to hit triple digits over the next two years, with an estimate that Los Angeles County residents will pay an average of $136 more in the next two years, according to new research from USC Lusk Center for Real Estate. Other Southern California markets will experience similar growth. Rents are expected to increase $149 per month for Orange County residents, $124 in the Inland Empire, $121 in San Diego County and $98 in Ventura County. Rent growth is currently outpacing income growth, and it is not sustainable. We sat down for an interview with Richard Green, USC Lusk Center Director, who co-authored the report with Beacon Economic's Chris Thornberg, to talk about the rental growth in Southern California and the local economic impacts.

GlobeSt.com: What is driving this aggressive rent growth?

Richard Green: We don't build very much and we have people getting jobs and better incomes, and we aren't building enough housing to absorb the demand that is being created by the jobs that are being created. If you look at California's housing production relative to employment growth, we are way behind the country.

GlobeSt.com: Your report also says that the rate of rent growth is slowing.

Green: That is correct, but is still good substantial growth. We had a couple of years where we were north of 5%. That is not sustainable, even over a short period of time.

GlobeSt.com: Many real estate professionals say that this is really a supply problem. What is your take?

Green: I don't think development itself is a solution, but it sure helps a lot. You need subsides. For the folks making $30,000 a year, the market is never going to provide the housing that they can afford in reasonable locations. They could drive three hours to work, but that really isn't sustainable either. The market should be able to reach people making $70,000 to $90,000 per year, and we aren't even there yet. I think that building a lot more would help those people out tremendously, and then, in addition to that, you need more subsidies. That is true of any large city in the world; it isn't a uniquely Los Angeles phenomenon.

GlobeSt.com: Are there other cities that already use subsidies that we could use as a model?

Green: New York uses subsidies more than the California cities do. They have a long history of public housing with, if I recall correctly, about 1 million public housing units. There are a substantial number of people that live there, so it is accepted. It also doesn't immediately tag you as an unemployed person. There are a lot of low-income people who live and work in public housing. In New York, they still don't have enough, but they do more than we do here. If you look at other expensive cities globally, like Singapore and London and Hong Kong, they use housing subsidies far more than any American city does.

GlobeSt.com: What is the local economic impact of extreme rent growth?

Green: It is hard to know. I always think that it is going to kill cities, but then I look at places like London, where they have had extreme rent growth. The one thing that we are seeing in L.A. is that we are importing people with college degrees and exporting people with didn't finish college. The ability to have a labor force that can do the day-to-day work that you need in an economy is being compromised right now. We are seeing it in new construction, where every developer complains about the lack of labor to build things. In hospitality, we are also seeing wage growth. In food and beverage, they are paying people more, and that has to show up somewhere.

GlobeSt.com: The Los Angeles population is growing. Do you think that housing costs will detour migration here?

Green: Total migration has actually slowed considerably here. The migration that is coming is higher income, which is where demand pressures are coming from. But, we are nowhere near the migration now that we had 20 years ago. I think that is very much a product of how expensive it is to live here. If someone were trying to move here from a place like Cleveland, it would be a much harder thing to contemplate.