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California’s Affordable Rental Housing Crisis

Renters across the nation, and in particular in California, are locked in a pernicious squeeze of rising rents and stagnant incomes that has diverted a growing share of their paycheck to rent.

Often lost in the housing boom/bust/boom from mid-2000 until now is that over the period rents have for the most part gone only one direction: Up. In California, the continued rise in rents — combined with stagnating incomes and the erosion of state and federal affordable housing funds — has led to a big shortfall in affordable housing, according to a report from the California Housing Partnership.

In the Golden State, as elsewhere, the burden is heaviest on those making the least. In 2011, about 20 out of 100 California households making 30% or less of their metro area’s median income was able to find an affordable home. Those making half their area median income did only slightly better, with 29 out of 100 able to find a home.

Who are these people? Half of California’s median income is about $29,000, which fits a range of occupations from retail cashiers to janitors, security guards and nursing assistants, the report notes. The state’s inflation-adjusted median income fell 8% from 2000 to 2012, while rents increased 20% over the same period.

That means a growing share of paychecks going to rent. In 2011, some 53% of California’s very low income households making half the median income spend at least half of their income on rent. That’s up from 30% spending half their money on rent in 2000.

As the report notes, close to a quarter of California’s population lives below a broad federal measure of poverty that takes both housing costs and government programs into account. That is by far the highest in the nation.

At the same time, a combination of state and federal budget cuts have reduced the funds for affordable housing by 79% between the last fiscal year and the 2007/2008 fiscal year (which was the first full fiscal year during the recession).

The report on California echoes a national report on the rent burden released late last year by Harvard’s Joint Center for housing studies. That report found that some 27% of U.S. renters paid about half of their income on rent, up from 19% a decade ago.