Commentary: New Studies Illustrate Exactly Why We Have a Housing and Homeless Crisis in California

By David M. Greenwald
Executive Editor

A poll released at the beginning of June by PPIC found not surprisingly that renters have been hammered by the latest economics—the poll found nearly 70 percent renters said their personal finances were “fair” or “poor” compared with just one-third for owners.

A majority of Californians favor changing state environmental regulations as a way to make housing more affordable.

To illustrate the stress brought about by rental prices: Renters increasingly are more likely than homeowners to support changing CEQA in an effort to increase housing affordability.  Sixty-six percent of renters support changing CEQA while only 53 percent of homeowners do.

“Amid widespread concerns about housing costs, nearly six in ten Californians approve of reforming CEQA as a way of increasing affordability,” said Mark Baldassare, PPIC Statewide Survey director and Miller Chair in Public Policy. “This includes two in three California renters and slightly more than half of homeowners.”

A story yesterday in the LA Downtown News noted, “According to a new statewide study, a single person making $70,650 in Los Angeles County is now considered low income.”

This has critical implications for housing.  Because it means that LA’s “median household income remains below what is considered low income” and because of this, The California Department of Housing and Community Development (CDHCD) found that more than 50 percent of residents of LA County are considered “low-income.”

According to the story, “CDHCD attributed this upward trend to inflation and the high cost of living.”

It notes, “On the lowest end of the report’s income classification, the ‘Acutely Low Income’ category is singular to California after the state adopted AB 1043 in 2021. That bill was intended to increase housing and social welfare programs for the state’s most vulnerable and categorizes those bringing in 15% or less of the county’s median income as ‘Acutely Low Income,’”

Phil Kramer, the CEO of Housing Matters in Santa Cruz cited two new reports that lead to the same conclusion: more housing.

First, he cites to a UCSF Homelessness and Housing Initiative report which notes that “while homelessness is a major issue for California, there are many conflicting ideas about what to do. … We need to understand who is experiencing it, how they became homeless, what their experiences are, and what is preventing them from exiting homelessness.”

At the same time, a report from the National Low Income Housing Coalition named Santa Cruz County as the least affordable place to live in the entire country.

Kramer argues, “What the general public may not know is that solutions to homelessness are already in action, right here in our community, every single day.”

He notes the Benioff Homelessness and Housing Initiative study (BHHI) “confirms nine out of 10 people experiencing homelessness in California are Californians. It confirms housing costs were a significant factor in people losing housing. And it confirms many of the things we know about the experience of homelessness: A lack of access to adequate health care; a desire to work thwarted by barriers caused by homelessness; a large swath of the homeless population living unsheltered.”

Kramer continues, saying “having a remarkably tight housing market is not sustainable, nor is it equitable.”  His organization, he says, is “deeply committed to adding more housing inventory within the community, particularly housing designed for those who are coming out of chronic homelessness.”

My point is somewhat different.  My point is that each community is dealing with its own set of challenges related to housing affordability and the cost of living.

And who is facing the biggest stress?  Those already living on the margins.

For me the critical part of the data is how vulnerable low income people are to homelessness as the result of the combination of high housing costs with low incomes.

Some commenters have asked—I think sardonically—if people go from stable housing one day, to homeless the next.  Answer from the data was a clear no to that.

The BHHI found, “The median monthly household income of participants in the six months prior to homelessness was $960.”

Given the cost of housing, that figure not surprisingly will make a lot of people vulnerable to becoming homeless because there is basically no margin for error at that income level.

Perhaps surprisingly they found that PRIOR to being homeless, the median monthly housing costs were $375 (in the danger area for sure).

However, they warn, “this statistic obscures an important point. Many participants were already living with family or friends (‘doubled up’) or living in informal arrangements without leases; others entered from a leaseholder arrangement and still others entered homelessness from institutional settings where they didn’t have housing costs.”

Nearly half then entered “homelessness from a non-leaseholder, non-institutional housing situation, 32% entered from a leaseholder arrangement, and 19% entered from an institutional setting.”

It continued, “Participants entering from non-leaseholder arrangements tended to have relatively low housing costs, but were staying in suboptimal—and impermanent—places, without legal protections. Many, if not most, had left formal leaseholding arrangements at some point before doubling up, but had forestalled homelessness through one or more non-leaseholding arrangements. Earlier, they had faced experiences similar to those who had left leaseholding arrangements. After losing that housing, they experienced a more gradual descent into homelessness, exhausting other options before entering homelessness.”

So no, they didn’t go from stable, secure housing to homelessness overnight.  It was a gradual process.

The study found the median monthly income for non-leaseholders in the six months prior to homelessness was $950 while the median monthly income for leaseholders was about $1400.  There was no margin for error even for that group, as they were paying an average of about $700 just on rent—half their income.

The study found, “Among non-leaseholders who paid rent, 57% were rent burdened (paying more than 30% of their income in rent) and 41% were severely rent burdened (paying more than 50% of their household income in rent).”

From this it should be obvious that what has happened is, as the cost of housing has gone up, the meager earnings of those on the low end of the scale have not kept up.

It seems to me that this data then suggests a few things—one that we need more housing, and second we need to do a better job of identifying people on the verge of becoming homeless and get them into supportive housing before it becomes chronic.