The California Dream Getting Tougher to Afford for People Under 40 and Renters
The economy in the Bay Area is booming, yet for people under the age of 40 and for renters, there is a high chance that they don’t travel or go out to eat much, and they probably have to cut back on groceries. Where is most of their money going to? According to a five-county poll conducted for the Silicon Valley Leadership Group and Mercury News, over one-third of Bay Area apartment renters and one-quarter of residents in their 20s and 30s say they are struggling to afford their housing. The poll revealed that 19 percent of those surveyed said they were having trouble making their monthly housing payments or rent. Unfortunately, people renting apartments were nearly three times as likely as those living in condominiums to have that problem, which is 34 percent compared to 13 percent. Paul Taylor, a former Pew Research Center vice president who explored the generational wealth gap, states,
Today’s old are doing much better than yesterday’s old, and today’s young are doing less well than yesterday’s young, and the gap between old and young is greater than it’s ever been. This notion that the escalator always goes up for each successive generation has always been true, but today it’s less true.
The survey found that more than half of the registered voters who responded reported cutting back “a great deal” or “some” on other expenses because of the cost of housing, which was far more common among younger residents and people living in apartments, with 79 percent of the renters and the same percentage of residents under 40 reporting some level of cost cutting. According to the survey, Bay Area residents under 40 were more than three times as likely to report they reduced other expenses “a great deal” to cover their housing costs compared to those over 60. People under 40 were also twice as likely to say that they struggle to afford their current housing situation. Unfortunately, older renters, especially those on fixed incomes, often have the hardest time absorbing the sharp increases and instability caused by a hot rental market. According to the Public Policy Institute of California, between 2015 and 2017, the average rent rose by 40 percent in Oakland, San Francisco and San Jose, which is far outpacing wage growth and has made people’s budgets tighter. It certainly appears that the California Dream is starting to fade as the years go by with housing becoming less affordable in the state.