Public Comment

The Rental Housing Crisis Breeds Middle Class Poverty

Harry Brill
Friday May 18, 2018 - 04:24:00 PM

Most of us realize that the poor pay a very heavy personal price because affordable housing in desirable neighborhoods is not available. Among the major penalties of being poor is a shorter life span. Residents who live in highly polluted West Oakland, for example, live up to ten years less than residents in the Oakland hills. Generally speaking, the substantial costs of renting leaves little or no money to spend on other necessities of life, including food and medical care. 

But as housing costs continue to increase, many members of the middle class are also taking a serious beating, including joining the ranks of the poor. Take a look at the current cost for rents. In 2006, 38 percent of the middle class, ---those who earn between $35,000 to $75,000 annually -- paid over 30 percent of their income for rent. Now the majority, 53 percent, pay over 30 percent of their income for housing. These families as a result of the skyrocketing rents have also less money to spend on their other needs. 

According to the real estate firm, Zillow, Berkeley's median monthly rent is $3,772. In San Francisco, the median is $3,402 a month. In Oakland, the median rents has climbed from $1,952 to $2,500. Moving to Los Angeles, even if possible, is no escape. The average rent for a two bedroom apartment in Los Angeles is $2,700. 

For a family living in Oakland with annual earnings, say, of $50,000, the average monthly rent of $2500, which is $30,000 annually, would consume a whopping 60 percent of their income. These families are living under enormous financial pressure, which requires living tightly and even making serious sacrifices.  

According to a survey conducted by the Federal Reserve nearly half of those interviewed did not have enough cash available to cover a $400 emergency. Moreover, many complained that they went without some form of medical treatment due to the costs. In another survey, 23 percent have less than $100 saved for car repairs. Indeed, except for the rich, too many Americans are living on the edge mainly because the very high rents are taking too large a bite out of their income. 

Data from the Census Bureau also confirms that high housing costs for the middle class as well as the poor deprives many formerly comfortable individuals and families of an adequate standard of living. According to the Census figures, the poverty rate in California is 14.5 percent. As California's population is about 39 million, the official number of poor is about 5.6 million. 

However, even some members of the establishment have complained that this figure too low. In response to this concern, the Census Bureau developed another method, which unlike the former rate, takes into account the cost of housing. The poverty rate this procedure yields in California is 20.4 percent, which is almost about 8 million. That's about 2.4 million more than the official rate. The revised method which the Census appropriately calls the Supplemental Poverty Measure gives us at least an approximation of the number of middle class individuals who have joined the ranks of the poor as a result of paying exorbitant rents. 

Among the barriers to affordable housing have been property owners who have an insatiable appetite of landlords for maximizing profits. Unfortunately, government too at all levels have been more empathetic to business interests than to tenants. In California, the state legislature, both Democrats and Republicans, passed in 1995 the Costa-Hawkins Rental Housing Act, which abolished for the most part community rent control laws. This law has been a disaster for California tenants.  

Please keep in mind that the problem is not just, as many assume, whether or not to enact rent control. Rather, the issue is really who has the control. Clearly, the legislation has shifted control from communities to the landlords. 

A measure to abolish Costa-Hawkins is expected to be on the ballot in November. To protect the poor, the near poor, and both the former and current middle class, It is immensely important that every effort be made to assure that the majority of voters support the abolition of Costa-Hawkins.