Housing Affordability
What portion of household income is spent on housing?
Housing costs in the Bay Area are higher than in almost any other place in the country, though they vary dramatically within the region. At the same time, many of the region’s workers earn higher income than those in similar jobs elsewhere. The relationship between household income and housing costs is an excellent gauge of regional affordability – one of the most critical issues facing the Bay Area.
41%
of Bay Area renters spent more than 35% of their income on housing in 2021
50%
of Bay Area homeowners spent less than 20% of their income on housing in 2021
Regional Performance
Many Bay Area households struggle with the cost of housing. Renters often bear the largest burden.
The share of Bay Area households excessively burdened by housing costs has increased since the 1980s, with home prices and rents alike growing at a faster rate than incomes. Though the share of cost-burdened households decreased during the 2010s the improvement has been more dramatic for homeowners than for renters. Between 2010 and 2019, the share of cost-burdened renters decreased from 42% to 36%, while the share of cost-burdened homeowners decreased from 32% to 21%. In early 2020s amid the COVID-19 pandemic, the share of cost-burdened households has started to increase, reversing the trend from the 2010s. The data show again that this trend negatively impacts renters more than homeowners. For example, from 2020 to 2021, the share of cost-burdened renters increased from 38% to 41%, while for homeowners it remained approximately 23%. In 2021, 30% of Bay households spent more than 35% of their income on housing, compared to 22% in 1980.
22%
of all Bay Area’s households spent more than 35% of their income on housing in 1980
30%
of all Bay Area’s households spent more than 35% of their income on housing in 2021
Historical Trend for Housing Affordability
Regional Distribution
Low- and moderate-income households are heavily burdened by the region’s housing market.
The vast majority of low-income Bay Area households experience an excessive housing cost burden, regardless of where they live. Increasingly, even moderate-income households face excessive cost burdens. For example, 54% of Bay Area households earning $50,000 to $75,000 per year spent more than 35% of their income on housing in 2021, and nearly one-third of households earning $75,000 to $100,000 were similarly housing cost-burdened. Only once a household’s annual income exceeds $100,000 does the region become generally more affordable. Just 8% of these high-income households are considered cost-burdened, with 58% of the Bay Area’s households who earn more than $100,000 spending less than one-fifth of their annual income on housing in 2021.
54%
of Bay Area households with income between $50,000 and $75,000 spent more than 35% of their income on housing in 2021
Housing Affordability by Income Level (2021)
Local Focus
Although rates have fluctuated over the last several decades, the share of cost-burdened households in every Bay Area county was higher in 2021 than it was in 1980.
Between 2010 and 2019, the share of cost-burdened households declined in all Bay Area counties. These declines ranged from 4 to 11 percentage points, with Napa (-3.9) and Santa Clara (-7.1%) counties on one end and Sonoma (-10.6%) and San Francisco (-10.4%) counties on the other end.
In the early 2020s amid the COVID-19 pandemic, the share of cost-burdened households increased for most counties in the region. Between 2020 and 2021 all counties except for Santa Clara and Sonoma experienced an increase in this rate. In 2021, 30% of San Francisco households were cost-burdened, which is comparable to conditions in 1980. In other Bay Area counties, the share of cost-burdened households has increased between 6 to 14 percentage points since 1980.
26%
of households that are owners in Marin County are cost-burdened, the highest county in the region for owners based on 2021 data
51%
of households that are renters in Marin County are cost-burdened, the highest county in the region for renters based on 2021 data
Historical Trend for Housing Affordability by County
National Context
The Bay Area has among the highest rate of housing cost burden among major metro areas in 2021, but not as high as metros in Southern California.
All three of the largest metro areas in California had among the highest rates of housing cost burden in the United States in 2021. While the Bay Area had a high housing cost burden rate at 30%, Southern California residents experienced even higher rates of housing cost burden. For example, Los Angeles households were among the most cost-burdened in the nation at a rate of 38%, while San Diego residents were cost-burdened at a rate of 36%. As noted by other Vital Signs indicators, while the Bay Area had higher rents and home prices than both Los Angeles and San Diego in 2021, the Bay Area also had a significantly higher median income than these regions. This difference in income likely results in the Bay Area having a lower rate of housing cost burden than Southern California despite having higher rents and home prices.
38%
of all households in Los Angeles spent more than 35% of their income on housing in 2021
Metro Comparison for Housing Affordability (2021)
Sources & Methodology
The share of income brackets used for different Census and American Community Survey (ACS) forms vary over time. To allow for historical comparisons, the Census Bureau merges housing expenditure brackets into three consistent bins (less than 20 percent, 20 percent to 34 percent, and more than 35 percent) that work for all years. The highest income bracket for renters in the ACS data was $100,000 or more, while the homeowner dataset included brackets for $100,000 to $149,999 and $150,000 and above. These brackets were merged together to allow for uniform comparison across tenure. While some studies use 30 percent as the affordability threshold, Vital Signs uses 35 percent as this is the closest break point using the standardized affordability brackets above.
ACS 1-year data is used for larger geographies – Bay counties and most metropolitan area counties – while smaller geographies rely upon 5-year rolling average data due to their smaller sample sizes. Note that 2020 data uses the 5-year estimates because the ACS did not collect 1-year data for 2020.
Income breakdown data is only provided for one year as it is not possible to compare consistent inflation-adjusted income brackets over time given Census data limitations. For the county breakdown, Napa was missing ACS 1-Year renter data for all years except 2012 and 2013, and Marin was missing ACS 1-Year renter data for 2019 — these counties used 5-Year data for those years.
U.S. Census Bureau: Decennial Census
Form STF3 – https://nhgis.org (1980-1990)
Form SF3a – https://nhgis.org (2000)
U.S. Census Bureau: American Community Survey
Form B25074 (2009-2021)
Form B25095 (2009-2021)