The costs of housing: Living arrangements

High rent and home prices in the county lead some, such as Veronica Soh, 37, and Joseph Campbell, 76, to share the costs.They share an intimate space. Their names appear side by side on a mailbox. At first glance, Veronica Soh and Joseph Campbell appear to be unusual roommates.

He’s a 76-year-old retired machine operator. She’s a 37-year-old caretaker. What binds the two together -- temporarily, at least -- is a common thread of financial dependency.

Campbell lived alone for more than two decades in his two-bedroom apartment on the 600 block on Hamilton Street. With the previous landlord, he struck a deal to pay $400 per month.

But new apartment managers tripled the rent, which posed a problem for Campbell, who lives on a monthly Social Security check of $1,600.

“It knocked the hell out of me,” said Campbell on a recent weekday afternoon. “I couldn’t afford that. If I wasn’t able to pay, I wouldn’t be able to stay.”

So he agreed to live with Soh, a former next door neighbor who needed cheap rent and a place to settle as she reentered Costa Mesa.

“He was overwhelmed,” Soh said. “I said, ‘Let me stay and watch over you.’”

Unrelated adults like Soh and Campbell are discovering it’s prudent to combine their resources and live together to combat the high cost of rental housing.

According to the University of Southern California’s Lusk Center For Real Estate, recent annual increases of 4.3% have resulted in Orange County apartment rents averaging approximately $1,200 for a one-bedroom, $1,500 for a two-bedroom and $2,000 for a three-bedroom unit.

Westside Rentals in Costa Mesa offers nothing below $1,200 for a two-bedroom apartment in Soh and Campbell’s ZIP Code.

PRICED OUT OF HOME OWNERSHIP

Pooling resources may be more of a necessity for those who want the equity building and tax advantages of owning a home.

The 20% to 25% recent annual increase in the median price of a single-family home makes the premium to buy rather than rent housing larger in Orange County than nearly any other metropolitan area in the nation, according to Lusk Center statistics.

Information kept by the Newport Beach Assn. of Realtors shows the October median home price in Costa Mesa was $789,000, $1.84 million in Newport Beach.

So it’s not surprising that only 11% of Orange County residents can afford a median-priced house, based on minimum income requirements and mortgage costs as calculated by the California Assn. of Realtors.

High prices are one of the primary reasons for unrelated people to live together, said Darrell Pash, president of Metro Realty, a residential brokerage company, with headquarters in Newport Beach.

“There are a lot of situations where someone needs help with the mortgage,” he said. “It’s a practical arrangement.”

Unrelated buyers accounted for about 4% of home purchases in 2004, according to the California Assn. of Realtor’s state of the housing market report. This may be even more common in Orange County, which ranks as one of the top areas in the United States for multifamily investment, according to Lusk Center research.

CHANGES INSIDE THE HOME

Social factors are also in the equation, said Frederick Hertz, an Oakland-based attorney who specializes in real estate property matters for unmarried couples.

“Living together used to be seen as a prelude to getting married,” he said. “Now it’s an alternative to getting married. And people are staying unmarried long after they’ve bought.”

Referring to co-ownership locally, Metro Realty’s Pash said “the cost factors and the fact that people aren’t getting married as much as they used to” are playing a role in unmarried people living together.

For renters, the primary concern may simply be responsibility for lease payments. Buyers must deal with the allocation of mortgage and tax consequences.

Untangling the messy affairs of unrelated home buyers who failed to plan ahead accounts for the bulk of Hertz’s legal work.

“People are getting into situations with legal and financial consequences where they don’t think of it as business and don’t deal with it in a businesslike way.”

He said the law as it is structured isn’t designed to govern most issues for unmarried home owners. It is typically faster to resolve marital disputes in a divorce than to break up property co-ownership, he said.

Unmarried home owners typically hold title as joint tenants or tenants in common. An alternative: People who register with the state as domestic partners may now hold title as “community property” and “community property with a right of survivorship,” just as if they were a married couple.

Buying isn’t even in the picture for Soh and Campbell. They are most concerned with renting in the immediate future.

He has an allergy condition that makes him reluctant to move away from Southern California. Soh doesn’t know where she’d turn next.

“We are living with luggage in our hand,” Soh said. “We’re always ready to leave.”

* ELIA POWERS may be reached at (714) 966-4623 or by e-mail at elia.powers@latimes.com.

20051127iqjbwtknADVICE FOR CO-OWNERS

Experts advise non-married co-owners to enter into a co-ownership agreement, to govern rights in the event of a “real estate divorce” or death of an owner.

A written agreement should:

* Allocate decision-making and payment responsibility for home-related expenses, and determine how contributions will affect sale proceeds.

* Allow either partner to force a buyout or sale, or describe each partner’s rights and duties following separation.

* Clearly allocate rights to sale proceeds and, if one partner buys out the other based upon an appraised value, determine price.

* Clarify intentions for disposition of ownership interest upon death.

* Decide who will occupy any shared home following separation.

-- Source: Andy Sirkin, author of “Unmarried Couples and Real Estate Ownership in California”

DOUGLAS ZIMMERMAN / DAILY PILOT(LA)SHARED SPACE: Veronica Soh talks on her cellphone while Joseph Campbell sits on a couch in their apartment on Hamilton Street in Costa Mesa. Soh and her cat, Pussy Kitty, moved into Campbell’s apartment to help him pay the rent after it had been raised to $1,200 from $400 in less than a year.