Financial hardship looms over California renters according to the latest Public Policy Institute of California’s statewide poll. The survey, which interviewed 1,576 adults in June, reveals the dire economic situation faced by renters amidst soaring inflation and rent hikes.
Unsurprisingly, the poll findings show that renters feel financially vulnerable compared to homeowners. 69% of renters ranked their personal finances as “fair” or “poor,” in contrast to 33% of homeowners.
As the economy worsens, renters’ monetary predicament becomes more severe. 40% of renters believe their financial situation has declined compared to a year ago, while only 26% of homeowners share the same sentiment.
The poll also highlights the stark contrast in perceptions about the economy: 55% of renters perceive California’s business climate as being in a “serious” or “moderate” recession, compared to 44% of homeowners. Looking ahead, 71% of renters anticipate “bad times” economically in the next 12 months, in comparison to 66% of owners. Nationally, 79% of renters and 74% of homeowners have a bleak outlook for the U.S. economy.
Housing Challenges
Indeed, the high cost of housing exacerbates the financial strain on families, particularly in California. For 46% of renters, housing costs pose a significant burden, while only 15% of homeowners feel the same way. The overwhelming cost of shelter has led to growing support, with 71% of renters and 56% of homeowners backing the loosening of environmental protections to facilitate more affordable housing.
Rising housing costs contribute to overall inflation concerns, with 34% of renters considering rising prices a “serious hardship,” compared to 14% of homeowners. The financial crunch also translates into higher poverty rates, affecting 46% of renters in their respective areas of California, in contrast to 38% of owners.
This disparity between renters and owners is not new; it underscores a longstanding class divide. 66% of renters perceive themselves as “have-nots,” whereas only 33% of owners share this sentiment. Additionally, 21% of renters consider themselves “low income,” while a mere 3% of owners do so.
Despite these challenges, there is considerable support for government intervention to bridge the wealth gap. 78% of renters and 63% of homeowners advocate for government efforts to address income inequality.
The Renters’ Struggle
Data from the 2021 Census further illuminates the financial distress experienced by California renters, particularly those burdened by housing costs that amount to 30% or more of their incomes.
In 2021, California had 3.1 million financially stressed renting households out of a total of 5.9 million – a staggering 53% of all renting households. Notably, the median housing costs for California renters amounted to $21,000, significantly lower than their median income of $60,769.
Conversely, only 2.3 million out of 7.4 million owning households experienced financial stress due to housing costs, reflecting a 31% share. The median housing expenses for California homeowners, including those with mortgages and debt-free homes, amounted to $22,944, while their median income stood at $109,974.
Therefore, while renters spend 9% less on housing expenses compared to homeowners, their paychecks are 45% smaller.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at [email protected]
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