The California Housing Partnership Corporation (CHPC), a NLIHC state partner, released a report, Update on California’s Affordable Housing Crisis: The Critical Role of Housing Access and Affordability in Reducing Poverty, in April. In California, there is a shortfall of 1.5 million rental units for very low income (VLI) renter households, with incomes at or below 50% of area median income (AMI). Many of the VLI households unable to find affordable housing face a severe housing cost burden, paying more than half of their income towards rent. The lack of affordable housing in California contributes to poverty and inequality across the state.
California’s poverty rate, according to the federal Official Poverty Measure (OPM), is 16%. However, when factoring in housing costs and social safety net programs, the poverty rate climbs to 22% according to the California Poverty Measure (CPM) developed by the Public Policy Institute of California. According to CHPC, high housing costs are contributing to poverty in many of the most populous and wealthy counties across California. For example, the poverty rate in Los Angeles County jumps from 18%, according to the OPM, to 27%, when factoring housing costs into the calculation.
Due to the lack of affordable and available rental units, households in the lowest income quartile in California spend an average of 67% of income on housing costs. In contrast, households that earn the median income spend an average of 27% of their income on housing costs. In addition, California has the nation’s highest rate of renter overcrowding. Low income renters in California are twice as likely to experience overcrowding compared to low income renters nationwide.
The authors attribute the current shortage of affordable housing to rising rents and stagnating incomes. Since 2000, rents increased 21% while renter median income fell by 8%. CHPC recommends that California policymakers focus on investing in the state’s Multifamily Housing Program to provide more permanent, affordable housing to families at risk of homelessness. CHPC also supports state legislative bills to create an ongoing source of revenue for the state’s housing trust fund through a document recording fee, and to expand California’s Low Income Housing Tax Credit program.