Holding Space: Underlying Real Estate Conditions for Nonprofits in the Los Angeles Region

Over the past decade, rising real estate costs have led to displacement of low-income residents and small businesses from Los Angeles’ changing neighborhoods. This trend raises questions about the long-term ability of nonprofit organizations that operate in these neighborhoods to remain in place. The recent economic downturn related to the COVID-19 pandemic makes understanding the baseline conditions that nonprofits face in the real estate market even more critical. Previous research suggests that some San Francisco Bay Area nonprofits, particularly those that rent operating space, have grappled with displacement pressure in recent years. With inspiration from this work, the Federal Reserve Bank of San Francisco conducted a survey of nonprofits in the Los Angeles metropolitan area to explore whether the same issues are present in another large, high-cost market with many nonprofits. Most nonprofits that responded to the survey experienced an increase in their operating space costs over the previous five years, and some have had to move or adjust their operations as a result. Most respondents were concerned about the potential displacement of their organization because of rising costs, as well as the potential displacement of their clients. The large concentration of visual and performing arts nonprofits in the Los Angeles region was reflected in the survey responses, in addition to other nonprofits serving low-income communities and communities of color.