High Bay Area rents come with another cost for low-income workers — they need multiple jobs just to make the monthly payments.
It takes the equivalent of more than four full-time minimum wage jobs for a worker in San Jose or San Francisco to afford a two-bedroom apartment and still have money left over for food, health care and transportation, according to an analysis released Wednesday by the National Low Income Housing Coalition. In Oakland and Fremont, the same low-wage worker would need to juggle three jobs to make rent and put food on the table.
Add it up, and the Bay Area remains the most expensive and income-draining region for housing in the U.S., according to the analysis.
“It really is a clarion sign for the Bay Area and California to take action,” said Amie Fishman, executive director of the Non-Profit Housing Association of Northern California. The COVID-19 pandemic has made the struggles of low-income families even harder, she said, as businesses closed and many workers lost their jobs.
The coalition’s analysis drew from federal and state housing data and captures some but not all of the economic disruptions caused by the health crisis. Advocates say it sharpens the point that minimum-wage service workers will need assistance to cover back rent they couldn’t afford during the pandemic or will be forced out of the region as housing prices climb in the economic recovery.
The state has banned evictions through Sept. 30, and programs to distribute $7.2 billion in state and federal aid have slowly been releasing funds to aid renters and landlords.
Researchers at the Washington, D.C.-based housing coalition noted that since 1979, incomes for professionals and executives grew at six times the rate of growth for low-income workers. Housing costs have outpaced wage growth for many families, they said.
“Over the course of the last several decades, low-wage workers have struggled to afford their homes in both good and bad economic times, and COVID-inspired changes are unlikely to solve that problem,” the researchers wrote. “Low wages make it difficult for households to achieve long-term economic stability, to save for future needs or even just to pay the rent each month. The COVID-19 pandemic and economic crisis has made this already dire situation worse.”
Communities of color have been disproportionately hit by the housing crisis as well as exclusionary zoning practices, researchers say.
The study found the housing crisis is far more difficult for the working poor in California, and particularly in the Bay Area. A typical Bay Area renter would have to make between $45 and $68 an hour to fit an apartment safely into her budget — and still have enough left over for living expenses, according to the analysis.
The study assumes a worker receives at least the $14 state minimum wage, and in some cases the higher local minimum wage, and a 40-hour work week. Fair market rents ranged from about $2,400 in Oakland to $3,050 in San Jose and $3,550 in San Francisco.
Bay Area metros take the top four slots in the national rankings for wages needed to pay rent. The San Francisco metro tops the list for most burdensome rent in the country, followed by San Jose and the Santa Clara County suburbs. The Santa Cruz and Watsonville region comes next, followed by fourth-ranked Oakland and the East Bay.
But the Bay Area is not alone in putting apartments out-of-reach for service, farm, gig and other low-wage workers. The average wage in the U.S. needed to afford a two bedroom home is nearly $25 an hour — more than three times the federal minimum hourly rate of $7.25.
State and regional leaders have sought to address the growing strains on low-income renters, but the effort to add density and fund more projects has been a challenge. Major tech companies since 2019 have promised more than $4 billion in loans, grants and land to boost affordable projects in the region. Gov. Gavin Newsom included billions of dollars in his latest budget to increase production of affordable housing and prevent homelessness and has emphasized eviction protections.
State officials in 2016 estimated California was short about 1.7 million affordable housing units. Since then, the costs for building affordable housing have only risen, with an average unit costing about $480,000, according to research from UC Berkeley’s Terner Center for Housing Innovation.
The California Housing Partnership this year launched a statewide campaign advocating $500 million more in dedicated, annual funding for the state’s low-income housing tax credit program, exempting affordable and supportive housing projects from certain environmental reviews and streamlining the bureaucratic process for securing funding.
Fishman said recent efforts at the state and federal level could bring additional resources to housing production.
“We are not living in a moment of scarcity,” Fishman said, noting the enormous economic gains in recent years by Silicon Valley companies and their employees. “We have an abundance of resources in the Bay Area and California.”