Several California metropolitan areas are considered to be the most expensive markets in the country for renters, according to a new study.
The 2023 ‘Out of Reach’ Report, published annually by the National Low Income Housing Coalition, found that various California counties dominated the list of the least affordable U.S. markets for renters, with metro areas in Northern California rounding out the top three.
California metro areas deemed the most expensive markets for renters
- Santa Cruz County
- Marin, San Francisco and San Mateo counties
- Santa Clara County
- Monterey County
- Santa Barbara County
- Orange County
Los Angeles County didn’t make the top ten for the overall list but was still considered an expensive place to rent a modest two-bedroom apartment. The average rental price for a two-bedroom apartment in the county is $2,781, according to RentCafe.
Researchers used a metric called Housing Wage, “which estimates the hourly wage full-time workers must earn to afford a rental home at fair market price without spending more than 30% of their income,” to determine the least and most affordable markets for renters, NLIHC said.
Analysts found that in California, residents would have to make nearly $90,000 to afford a two-bedroom apartment comfortably. The average hourly wage needed to afford the rental would be $42.25, according to the report.
The hourly rate needed to afford a two-bedroom apartment in the Golden State is nearly 1.5 times higher than the national rate of $28.58/hour. That means workers earning $15.50, the state’s hourly minimum wage requirement, would need to work 2.7 full-time jobs to afford a two-bedroom apartment without spending more than 30% of their income.
In California, about about 45% of people are renters.
“The affordable housing crisis worsened over the past few years as the COVID-19 pandemic, unusually low housing vacancy rates, skyrocketing rental prices, and record-breaking inflation exacerbated the financial insecurity of low-income renters,” the report said.
The fact that living in California can be expensive is not exactly breaking news. The high cost of housing and other necessities has been the driving force behind some residents moving out of the state or considering doing so.
California wasn’t the only state with high living expenses. Analysts found renting a two-bedroom apartment in Hawaii, Massachusetts, New York and Washington wasn’t cheap.
To address the limited quantity of affordable housing nationwide, the study authors recommend that the federal government build more affordable housing and assist low-income wages directly.
The full report can be viewed here.