California’s Homelessness is a Cost of Unaffordable Housing
California hosts 30% of the nation’s homeless individuals despite only making up 12% of the United States of America’s overall population . Since 2020, the state’s homeless population has increased by 6%, while the nationwide rate has only risen by 0.6% . California’s homelessness disparity is usually explained as a phenomenon that results from a myriad of factors, including drug addiction, mental illness, and poverty, but these issues exist fairly evenly all over the country. One contributing factor to rates of homelessness that differs heavily in California is housing prices, where its median monthly rent of $1,586 ranks second highest in the country, only behind Hawaii . A 2002 study titled, ‘Homeless in America, Homeless in California’ revealed that housing and rental prices were the lone factors in producing a statistically significant impact on the rate of homelessness nationwide . Thus, California’s government must keep housing affordable for residents, despite the difficulties surrounding the matter, to reduce levels of homelessness in the state.
Many attribute California’s prevalence of homeless individuals to factors other than housing prices, but this is inaccurate. One such argument goes back to the 1960s, when deinstitutionalization movements closed psychiatric hospitals all across California. This campaign pushed the state’s mentally ill out into society, where they have historically been more likely to have lower life prospects and to become impoverished . However, ‘Homeless in America, Homeless in California’ determined that deinstitutionalization was not found to be statistically significant in predicting rates of homelessness . Furthermore, California’s rate of mental illness is among the country’s lowest at 3.43% , so it is unlikely that mental illness accounts for the disparity in the homeless rates between California and the rest of the nation. Additionally, drug use is another scapegoat for levels of homelessness especially in California’s largest cities, but a 2023 study by WalletHub revealed that California ranks 36th out of all states in rates of drug use and addiction . Again, drug abuse is present in the state, but not significantly more than in other states, so it cannot be the determining factor in explaining California’s homelessness disparity. Instead, the answer lies in housing prices, where California ranks the highest among all continental states.
Affording housing in California is unrealistic for much of the state’s population. Historically, the U.S. Housing Department of Housing and Urban Development has recommended monthly rent not to exceed 30% of household income, at the risk of financial hardship . However, in many of California’s cities, this threshold has become more of a dream than an expectation. In Los Angeles, where in 2019 median rent was $1,754, a family would need to earn $70,080 annually to meet the 30% figure. However, the median income was only $56,245, leaving an ‘income gap’ of nearly $14,000. Similarly, in the city of San Francisco, the income gap was over $24,000 per year. Out of the 16 cities measured in California, 12 of them featured an income gap , meaning that housing in these cities is borderline unaffordable for many inhabitants. The use of median values proves that housing in California’s cities is unaffordable even for those working at higher incomes, as well as for those working at minimum wages.
Even when looking beyond just prices, the housing and rental markets in California are in precarious positions. One metric used to predict a healthy rental market is the rental vacancy rate, a gauge measuring the level of empty rental units currently able to be occupied by tenants. Nationwide, the rental vacancy rate has remained between 6 - 9% over the past decade , but in California, that rate in 2022 was 3.9% . Lower vacancy rates correspond with a ‘tighter market’; as demand for housing outpaces supply, rental prices are driven upwards due to competition between renters. ‘Homeless in America, Homeless in California’ also revealed that even small changes to housing market conditions can leave drastic impacts on rates of homelessness. When studying data from all 58 counties in California in 2002, they determined that a 25% reduction in the incidence of homelessness could be achieved by increasing the vacancy rate by 1% from the mean and decreasing the monthly income-to-rent figure by only 0.2% from the mean, with larger changes yielding even more impressive results . For now, with inadequate amounts of affordable housing, low-income Californians need to live somewhere, so they turn to shelters, parks, or the street. It is the government’s responsibility to ensure enough affordable housing is available for its citizens, and the current homeless rates prove this has been an area of failure thus far.
In recent years, California’s government has taken strides to protect renters in the housing market. One public policy strategy relevant to keeping privately-built housing prices low is government-provided security for tenants. Legislation decisions have been enacted to protect tenants from landlords eager to raise prices amidst the lack of affordable housing supply. The California Tenant Protection Act of 2019 prohibits evictions without just cause and limits annual rent increases to either 5% plus the inflation rate, or 10%, whichever is lower . Unfortunately, inflation rates of 6.5% or higher in both 2021 and 2022 ensure that these annual increases reach 10% . This figure is higher than the growth of the minimum wage in either of those years , pushing the ability to pay for housing further out of feasibility for California’s lowest wage earners. Additionally, in August 2020 during the pandemic, the state government instituted the Tenant Relief Act to protect tenants who suffered financial distress from the pandemic from eviction. Though statewide protections expired in 2022, certain counties have extended tenant protections, such as Los Angeles, where protections recently expired in March of 2023. However, tenants are still liable for rent payments that accrued during the pandemic — 600,000 Californians owe over $2.1 billion in back rent period, with a third of those residents living in Los Angeles County . While the long-lasting impact of these policies is yet to be determined, one certain outcome of expiring tenant protections is even further financial burdens for California renters.
In terms of supplying affordable housing directly, California’s government under Governor Newson has taken an aggressive approach, which has not come without difficulties. In March of 2022, the California Department of Housing and Community Development released a goal to construct 2.5 million homes in the next 8 years, with at least one million designed for low-income residents . This aggressive approach to combat the housing crisis sets the quota over twice as high as the previous eight-year cycle, and the state plans to meet its goal through increased accountability from counties on meeting set quotas. Noncompliance with quotas can now lead to monthly fines of $600,000 per city, along with other punishments . For the first time, local governments are being monitored by the Housing Accountability Unit created in 2021. The unit has been working with local officials to review and potentially alter policies that have hindered housing developments in the past and has provided technical assistance to local departments to build more housing . However, progress has been slow, as many municipalities around California have been resistant to quotas. Over 40 cities in the state have adopted policies aimed to undermine required housing developments. One such example was Woodside, a San Francisco community, which briefly claimed itself to be a mountain lion habitat in an unsuccessful attempt to avoid building new housing.
Furthermore, gripes with housing requirements have not been restricted to just local governments. On the individual level as well, many lobbyists, or NIMBYs (‘not-in-my-backyard’ activists), have voiced concern with housing quotas. Golden State Warriors point guard Stephen Curry, and his wife Ayesha, wrote a letter to the city council of his San Francisco community, Atherton, opposing a multi-family development set to be constructed near their home, citing an invasion of their privacy . While this effort was unsuccessful, and the 348-unit project was approved by the Atherton city council, NIMBY’s all over the state are providing plenty of road bumps for housing construction. As a result of both local and individual backlash, housing for the project has been built at half the rate the state has wanted thus far .
As wages have failed to keep up with the growth of inflation in recent years , and the growth of rental costs remains strong, Californians all over the state are facing an uphill battle to afford housing. While the state government has taken strong action to reverse the trend, they must come down hard on municipalities finding loopholes or failing to meet quotas to build affordable housing. If not, rates of homelessness will continue to rise. The state has recognized that it is far behind in this metric, and seeing the initiative take place is encouraging. Further action must be taken against private landlords to restrict annual rent increases beyond a reasonable amount, as tenants cannot afford to devote upwards of 30% of their salary towards rent for any substantial amount of time. If meaningful action does not continue to take place, more and more Californians will be forced out into homeless shelters or public spaces due to the housing crisis.
 “U.S. State Population by Rank.” Infoplease, www.infoplease.com/us/states/state-population-by-rank. Accessed 7 June 2023.
 Herrera, Joseph and Paluch, Jennifer. “Homeless Populations Are Rising around California.” Public Policy Institute of California, 14 Apr. 2023, www.ppic.org/blog/homeless-populations-are-rising-around-california/.
 “Average Rent by State.” Average Rent by State [Updated May 2022], worldpopulationreview.com/state-rankings/average-rent-by-state. Accessed 7 June 2023.
 Quigley, John M, et al. “HOMELESS IN AMERICA, HOMELESS IN CALIFORNIA.” eScholarship, University of California, 3 Apr. 2002, escholarship.org/content/qt4v61c0ws/qt4v61c0ws.pdf.
 “SERIOUS MENTAL ILLNESS AMONG ADULTS BELOW THE POVERTY LINE.” Serious Mental Illness among Adults below the Poverty Line, 15 Nov. 2016, www.samhsa.gov/data/sites/default/files/report_2720/Spotlight-2720.html.
 “Mental Health Statistics by State 2023.” Mental Health Statistics by State 2023, worldpopulationreview.com/state-rankings/mental-health-statistics-by-state. Accessed 7 June 2023.
 Kiernan, John S. “Drug Use by State: 2023’s Problem Areas.” WalletHub, 3 May 2023, wallethub.com/edu/drug-use-by-state/35150.
 “Income Limits.” California Department of Housing and Community Development, www.hcd.ca.gov/grants-and-funding/income-limits. Accessed 7 June 2023.
 Tran, Sania. “Breaking the Bank: Where Is Rent Affordable for Those Earning a Median Income?” Apartment List - More than 5 Million Apartments for Rent, 20 Dec. 2022, www.apartmentlist.com/research/where-is-rent-affordable-for-those-earning-a-median-income.
 Quarterly Residential Vacancies and Homeownership, First ... - Census.Gov, 3 May 2023, www.census.gov/housing/hvs/files/currenthvspress.pdf.
 “Rental Vacancy Rate for California.” FRED, 15 Mar. 2023, fred.stlouisfed.org/series/CARVAC.
 “AB-1482 Tenant Protection Act of 2019: Tenancy: Rent Caps.” Bill Text - AB-1482 Tenant Protection Act of 2019: Tenancy: Rent Caps., leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB1482. Accessed 7 June 2023.
 “Current US Inflation Rates: 2000-2023.” US Inflation Calculator | Easily Calculate How the Buying Power of the U.S. Dollar Has Changed from 1913 to 2023. Get Inflation Rates and U.S. Inflation News., 10 May 2023, www.usinflationcalculator.com/inflation/current-inflation-rates/.
 Enforcement, Division of Labor Standards, and State of California. Minimum Wage Frequently Asked Questions, www.dir.ca.gov/dlse/faq_minimumwage.htm. Accessed 7 June 2023.
 Reyes-Velarde, Alejandra. “Evictions Rise, Tenants Scramble for Help as LA County Protections Expire.” CalMatters, 21 Mar. 2023, calmatters.org/california-divide/2023/03/eviction-protection-la/.
 “Statewide Housing Plan.” Statewide Housing Plan, statewide-housing-plan-cahcd.hub.arcgis.com/. Accessed 7 June 2023.
 Growing List of Penalties for Local Governments Failing to Meet State Housing Law, abag.ca.gov/sites/default/files/documents/2021-06/Consequences%20of%20Non-Compliance%20with%20Housing%20Laws.pdf. Accessed 8 June 2023.
 State of California. “Governor Newsom’s Newly Created Housing Accountability Unit Marks First Year.” California Governor, 5 Nov. 2022, www.gov.ca.gov/2022/11/04/governor-newsoms-newly-created-housing-accountability-unit-marks-first-year/.
 Shultz, Alex. “Atherton Adopts Housing Plan over Tears, Steph Curry Complaints.” SFGATE, 2 Feb. 2023, www.sfgate.com/local/article/atherton-backs-curry-opposed-housing-17755551.php.
 Walters, Dan. “Cities Still Seeking Housing Quota Escape Plans.” CalMatters, 31 July 2022, calmatters.org/commentary/2022/07/cities-still-seeking-housing-quota-escape-plans/.
 Person, et al. “Inflation Squeezes Californians’ Budgets, despite Wage Growth.” Public Policy Institute of California, 25 May 2023, www.ppic.org/blog/inflation-squeezes-californians-budgets-despite-wage-growth/.