Living in California’s Bay Area has always been expensive, but the cost of living has skyrocketed to a point where even a six-figure salary doesn’t guarantee financial security.
In fact, in this tech hub of the country, earning $150,000 or more may still not be enough to afford a home.
A Surprising Definition of ‘Low Income’
Recently, the California Department of Housing and Community Development (HCD) released shocking data revealing that families earning over $150,000 a year can still be considered “low income” in the nine-county Bay Area.
This surge in the threshold for low-income status is due to the rapid increase in housing costs in the region.
In Santa Clara County, for example, a family of four earning $159,000 is now classified as low income.
In nearby San Francisco, San Mateo, and Marin counties, the low-income threshold is set at $156,000 for a family of four.
As the Bay Area’s housing market continues to soar, even dual-income households — including teachers, nurses, and tech professionals — find themselves increasingly priced out of the cities where they work.
Explosive Housing Prices Make Living in the Bay Area a Struggle
The cost of housing in the Bay Area has become so inflated that it’s now almost impossible for middle-class families to afford homes.
In March, the median price for a single-family home across the region reached $1.4 million — a 12% jump from just a month before.
In San Mateo County, that number skyrocketed to $2 million.
These figures are especially staggering when compared to national averages, where the median household income in 2023 was about $75,000.
With prices climbing at such a rapid rate, even well-earning professionals are finding it harder to keep up.
Solano County, which remains the Bay Area’s most affordable region, still classifies families earning more than $94,500 as low income.
Other counties like Napa and Sonoma are similarly impacted, with income thresholds set at $117,400 and $105,600, respectively.
Housing Crisis: A Regional Struggle with No Easy Solutions
Despite years of promises from California’s leaders to address the housing shortage, progress has been slow.
Governor Gavin Newsom, for instance, set an ambitious goal in 2019 to build 3.5 million new homes by 2025, but as of late 2023, only around 500,000 homes had been permitted.
The state’s Legislative Analyst’s Office recently gave California an “F” for housing affordability, citing a shortfall of at least 2.5 million units.
As prices continue to soar, many potential buyers are squeezed out.
While affordable housing programs are available, they are often restricted by income caps that fail to reflect the new reality.
Families earning $150,000 may now find themselves too wealthy to qualify for subsidized housing but not wealthy enough to afford market-rate homes or $5,000 monthly rents.
How the Pandemic Made the Housing Crisis Worse
The pandemic only exacerbated the housing situation.
As remote workers began flocking to once more affordable areas like Sonoma and Solano counties, home prices in those regions also increased.
At the same time, high interest rates have led many homeowners to hold onto their properties rather than sell, further tightening the housing market and creating bidding wars that make homes even less affordable.
Impact on Essential Workers and Families
For essential workers like teachers, paramedics, and utility workers, the skyrocketing housing costs have forced many to move further away from the cities they serve.
This has led to longer commutes and, in some cases, workers deciding to leave the Bay Area entirely.
In 2022, more than 500,000 people left California, with the Bay Area experiencing the steepest population declines.
The State Tries to Adapt to a New Reality
To adjust to the changing landscape, the HCD has updated its guidelines for affordable housing eligibility, factoring in family size and the cost of living in different areas.
These new guidelines help determine rent caps and eligibility for aid programs, but they also highlight the ongoing struggle to make housing accessible in a region with rapidly rising costs.
The situation in California’s Bay Area serves as a stark reminder of the growing affordability crisis that is impacting not just low-income residents but also middle-class families earning six-figure salaries.
