California’s High Cost of Housing: Cost and Consequences to the Economy

California is one of the most popular spots for real estate investments in the United States. Housing investors have maximized their profits countless times in the property market due to the rapid rising costs. Despite how thriving the housing market is in the state and how much money it has put into the pockets of investors, it remains the state with t highest poverty rate when it comes to family resources vs housing costs and prices of necessities like food.

While measures from the state and federal governments, such as rent relief and evictions moratorium have provided some sort of respite to many families, the high housing cost makes it even harder to alleviate lack in the longer run. Home prices skyrocketed during the pandemic-recession era, which came as a slight surprise, considering the lockdown and the shutdown of many government establishments to curb the spread.

Of course, a lot of people sought houses that were bigger than their previous homes for more office spaces and playing ground for their children. However, this factor isn’t enough to justify the rising cost of houses in California. Besides, houses have always been expensive in the state, so only the pandemic can’t take the fall.

A Look at the California Poverty Measure (CPM) Data of 2019 The CPM data of 2019, developed by the PPIC, measured the poverty rate in California in 2019, including the cost of living, family, and safety net benefits before the pandemic went full blown. According to the data, 16.4% of Californians lacked the required resources to meet their basic needs. Nearly one in every six Californians lived close to poverty, while more Californians would have lived in poverty if not for the intervention of safety net programs. In 2020, the figure must have doubled due to the constrained job opportunity.

Safety net programs are designed to keep children out of poverty by lowering the poverty rate of families. The ETIC lowered these rates by 1.6 points, while CalFresh and Child Tax Credit lowered the poverty rate by 1.3 points and 1.1 points. The poverty rate amongst adults 65 and older and children are highest with 18 and 17.6% respectively. Immigrants accounted for 21.6% and 21.4% Latinos lived in poverty, 4% more than African Americans.

If 2013 housing costs had extended to 2019, more than 800,000 Californians should have been out of poverty. Judging by the figures from various safety net programs, over 1.4 million Californians moved out of poverty. Latinos and Blacks were the highest representatives. This outlines the importance of housing and the role it plays in terms of cost of living.

Cost of housing in California is exorbitant, and until it’s addressed, Californians will struggle to make ends meet while paying rents. Not to mention a possible humanitarian crisis and increase in crime rate. The government has taken some huge steps to address the various housing challenges with the Comeback Plan, but more needs to be done to ensure that only a fewer number of Californians would have to go through to survive in the state.

Despite the high cost of housing, you shouldn’t let it hinder you from getting a home in California. You can still get an apartment at a fairly good deal with the help of one our real estate agents. All you have to do is to reach out to one of them.

ABOUT THE POWER IS NOW MEDIA

The Power Is Now Media is an online multimedia company founded in 2009 by Eric L. Frazier, MBA, and is headquartered in Riverside, California. We are advocates for homeownership, wealth building, and financial literacy for low to moderate-income and minority communities. The Power Is Now Media corporate office is located at 3739 6th Street Riverside, CA 92501. Ph: 800-401-8994 Website: www.thepowerisnow. com.

Published by Eric Lawrence Frazier, MBA.

References

https://www.ppic.org/blog/californias-high-housingcosts-increase-poverty/