I was perusing the real-estate listings for Palo Alto, California, and spotted a stylish, remodeled midcentury ranch house with a whopping 1,700 square feet on a postage-stamp lot for a mere $2.6 million. What a deal! There are great jobs all around that lovely Bay Area city, the heart of Silicon Valley and home to prestigious Stanford University. But imagine the income one would need to, say, put $700,000 down and make a $13,000 monthly housing payment.
Palo Alto is near the top of the food chain, but California’s coastal housing prices — even in run-down and dangerous cities — typically top a half-million bucks. And those median prices will get you a cottage or a little condo with a view of the freeway. Bay Area friends — even ones with $150,000-plus incomes — live with roommates or rack up 35,000 miles a year commuting in bumper-to-bumper misery from the boondocks. Southern California isn’t much better.
Fortunately, the U.S. Census Bureau has taken that reality into account in its supplemental formula for determining the nation’s poverty rates. Its recently released data show a significant uptick in household income (5.2 percent) since 2014 and a slight drop (1.2 percent) in the poverty rate. But in high-cost-of-living states, particularly California, those numbers were far less encouraging. Despite its reputation for wealth, California once again had the highest poverty rate in the nation, with nearly 21 percent of its residents unable to afford the basics.
California’s leaders are proud of their continual efforts to expand the number of welfare-type programs available to residents. In fact, the Census Bureau points to all the many governmental assistance programs that boost poor Californians’ take-home income. Even if one supports those wealth-transfer programs, it’s clear they don’t come anywhere close to alleviating problems caused by the state’s housing prices.
The governor and Democratic legislators “raised the state’s minimum wage, improved overtime pay for farm and domestic workers, enacted an earned-income tax credit, expanded health and welfare benefits, and provided extra money for the educations of poor students,” explained the Sacramento Bee’s Dan Walters. But they failed “to confront the heaviest burden on poor families,” which is of course the state’s “soaring housing costs.”
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